Gross Reservoir Fund Phase 1 Distribution

In 2021, Denver Water sued Boulder County in federal court to exempt Boulder County from being able to exert its local land use regulations on Denver Water’s Gross Dam Expansion Project in unincorporated Boulder County. The federal “preemption” law was expected to win in court since a utility project of this nature supersedes local control. As part of a Settlement Agreement, Boulder County secured $5 million from Denver Water for direct payments to eligible property owners who are (or are expected to be) adversely impacted by Denver Water’s Gross Reservoir Expansion Project (the “Project). The “Reduce Impacts to Residents” Fund was established in Section 2.1 of the Denver Water vs. Boulder County Settlement Agreement:

2.1. Denver Water will provide $5,000,000 for a fund to mitigate noise, light, and air impacts to households near the Project. Boulder County will administer the fund and will develop standards or formulas for the fund that ensure a fair and equitable distribution of the money based on the expected type and severity of the noise, light, and/or air impacts to eligible households.

On June 29, 2023, the Board of County Commissioners adopted a tiered payment structure that distributes $4 million from the total $5 million “Reduce Impacts to Residents” Fund for a Phase 1 Distribution. An amount of $1 million was held back for a Phase 2 Distribution to address Denver Water’s tree removal operations in 2025 and 2026

The Board of County Commissioners adopted a tiered payment schedule (see image below) for impacted Gross Reservoir residential property owners based on recommendations outlined in the Gross Reservoir Community Working Group Report and a staff presentation presented at a public meeting on June 29, 2023 (link to recorded video). The payment calculations direct higher payments to households with significant, direct, mitigatable impacts while awarding tiered (equal) payments to homes with lesser impacts.

To help inform Boulder County of which houses would be impacted (and to what degree) by Denver Water’s Project, Boulder County contracted with Pinyon Environmental, Inc. to conduct a model-based Environmental Analysis of the expected type and severity of air, noise, and visual (including direct line-of-sight and lighting) impacts on individual households. Pinyon’s Analysis helped county staff and the 12-member Gross Reservoir Community Impact Mitigation Fund Advisory Working Group identify impacted households and potential mitigation remedies that could be implemented over the 7-year Project using Phase 1 distribution payments.

While Pinyon’s Analysis was a useful resource in helping to quantify anticipated impacts, Boulder County and the Working Group also considered the shared, lived experience of Gross Reservoir residents to help identify the households with the greatest impacts and mitigation needs.

Property owners of record will receive a notice in the mail of their household’s individual payment amount and how to claim that amount from Boulder County. Payment award letters were sent to eligible households on or about August 11 to mailing addresses of record with the Boulder County Assessor’s Office.

Payments in the form of a check and an IRS Form 1099 will be issued to approximately 400 households upon each owner’s completion of documentation (enclosed) required by Boulder County and IRS regulations.

Because of the high volume and immediate response to award claims, we are asking households to allow up to 60 days to receive their award payment.

Payments will be issued within approximately 30-45 days after Boulder County receives the following completed forms:

• IRS W-9 Form
• Award Claim Form

Note: These items can be filled out and submitted electronically at: boco.org/gross-payments

If you have a mailing address other than your property address, please make sure that the address is up-to-date and on file with the Assessor’s Office database. Submit updates/corrections using the Change Address form.

For income tax purposes:

• If you wish to ensure that you receive your payment in this year’s (2023) tax cycle, please submit your claim by Nov. 15, 2023.
• If you wish to ensure that your payment is issued for tax year 2024, please wait until January 1 or later to submit your paperwork.
• Boulder County will mail you a 1099-G in the beginning of the calendar year following the year you received an award payment (i.e., claims paid in 2023 will receive a 1099-G at the beginning of 2024).
• Claims received between November 16 and the end of the year may result in a payment being issued in tax year 2024. (i.e., claims submitted within this timeframe may have a check issued in either tax year, depending on processing time.)

We know residents are concerned about when a check is sent and how long it might “sit” in a mailbox or how often you should check your mail. We understand this concern and are working to get through the payment steps as quickly as possible. However, we are not able to alert you when your check is issued.

Please do not expect payment any sooner than 30 to 45 days after you send in your paperwork or apply online.

Payment calculations for the Phase 1 Distribution of the Gross Reservoir Community Mitigation Fund were achieved by utilizing rankings from an environmental analysis study conducted by Pinyon Environmental, Inc. (Pinyon report). The Pinyon report ranks three environmental impacts: Noise, Air Quality, and Visual/Lighting.

The final household rankings in the report were formatted to show only one decimal point, however, more precise/multiple decimal points were used for the Air and Noise calculations resulting in some households with the same total ranking having a different payment amount.

Payment Calculations:

The Community Working Group, in its report and recommendations (pp. 8-10), agreed to an impact WEIGHTING SYSTEM of 35% Noise, 30% Air Quality, and 35% Visual/Lighting (which were the proposed weights in the Pinyon report), and the Board of County Commissioners accepted that recommendation. Noise and Air Quality rankings were computed at precise numbers extending to multiple decimal points. Visual/lighting impacts (if present) were calculated at a whole number of 1-5 based on distance ranges.

The final payment calculation (for total rankings 2.6 and above) is =(NOISE*0.35+AIR*0.3+VISUAL*0.35) X Multiplier (i.e., point value based on the $4 million distribution). In other words, the dollar calculation is based on the SUM of the calculations of the three WEIGHTED factors X MULTIPLIER.

Summary: The extended decimal rankings for Air and Noise and the individual weightings for each factor determined a more precise and accurate disbursement amount for each individual household.

At a public meeting on June 29, 2023, the Board of County Commissioners approved $4 million to be spent from the $5 million “Reduce Impacts to Residents” Fund for Phase 1. Because Denver Water’s operational plan for tree removal around Gross Reservoir will not be available until late 2024 or early 2025, tree removal impacts were not considered in the first phase of funding. A sum of $1 million has been held back for a future round of funding once the tree removal impacts are better known.

Per IRS regulations, funds must be distributed as 1099-G payments. We understand there is discord around the fact that payments are subject to IRS tax regulations. Boulder County has consulted internal and external accounting and legal experts to determine if there is a way to exempt distributions from IRS regulations, but just as with payments made for recent local disasters (e.g., the Marshall Fire), all payments to individuals are subject to IRS 1099 rules.)

Note: Boulder County cannot provide tax, legal, or accounting advice regarding the distribution of payments from the Denver Water v. Boulder County Settlement Agreement Fund. We recommend that you consult with a tax or legal adviser before completing and submitting your forms.

Yes. Payments from Phase 1 MUST BE CLAIMED BY APRIL 30, 2024. Please do not delay in submitting the required forms. The Phase 1 distribution is a point-in-time payment intended to address current and continuing impacts over the 7-year construction period.

The property owner(s) of record at the time of disbursement will receive the one-time payout per property address. No additional payments will be made to future owners.

Any money that is unclaimed as part of the Phase 1 Distribution will be assigned to the Phase 2 Distribution amount after the deadline of April 30, 2024.

The Settlement Agreement specifically refers to “households,” which both the Denver Water and Boulder County legal teams have defined as habitable “homes” where people reside either full- or part-time. Camping lots, unfinished construction, and non-human-dwelling properties are not considered to be “households” under the legal definition.

Further, the Boulder County Commissioners approved the Community Advisory Working Group’s recommendation that “people in the process of building homes are eligible recipients of the Fund if they have a certification of occupancy two weeks before the date that Boulder County approves and begins to issue payments.” A partial build or new construction without a CO does not qualify for a payment under the approved recommendations.

If you have a mailing address other than your property address, please make sure that the address is up-to-date and on file with the Assessor’s Office database. Submit updates/corrections using the Change Address form.