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Nestled under the San Juan Mountains amid some of the deepest, cleanest snowpack in Colorado, and celebrated for hot springs, an ice festival and a drinking source burbling naturally through a filter of ancient lava, the city of Ouray will soon have another distinction it never expected:

Some of the highest-priced drinking water in the state. 

State water quality officials declared in 2021 that Ouray’s treasured, pristine aquifer had been infiltrated by microorganisms trickling through from surface creeks and runoff. Ouray needed a new, roughly $12 million treatment plant to meet Clean Water Act standards. 

“Our water is not far enough in the ground to be thousand-year-old water,” Ouray Mayor Ethan Funk said.

In a community of 1,000, that water from a stone would cost $12,000 for each man, woman and child. 

Now another section of the state water division says Ouray isn’t moving fast enough to get the treatment plant built. So make that $12,001,460 for the bill, when including a state-imposed fine of up to $1,500 for the delay. 

“We have a sewage plant that’s being rebuilt, too,” said Funk. The wastewater construction contract is for $17 million.

People hangout in hot springs that overlook mountain views.
Visitors to the Ouray Hot Springs Pool enjoy steamy temperatures during the winter months in this July 2021 file photo. (William Woody, Special to The Colorado Sun)

State officials acknowledge Ouray has been acting in good faith in trying to secure funds, design and contract for a major new treatment plant as quickly as possible. 

“We recognize that the city’s been working diligently, and it’s no easy task,” Colorado Safe Drinking Water Program Manager Ron Falco said. “But at the same time, we’ve got to fulfill our legal commitments as well.” 

The state would like to point out it’s not just hanging Ouray out to dry on the $12 million. Ouray can get a $12 million loan from a low-interest state revolving fund. And $5 million of the loan can be forgiven as a grant from the federal Bipartisan Infrastructure Law, with the state’s blessing. 

And there’s more, including a $750,000 grant from the Department of Local Affairs impact fund. 

Not wanting to sound too ungrateful, Funk chooses his words carefully when describing a bureaucracy at once munificent and punitive.

“It doesn’t make sense to me that the state is going to fine us, and that fine money’s going to come out of the money that they gave us,” Funk said. 

Ouray’s journey from water bounty to water problems began in 2020, when state health department officials turned sights toward the city in a rotating survey of local drinking water supplies. Detailed sampling at the spring source turned up total coliform results beyond acceptable levels. Coliform can encompass potential E. coli and other bacteria, and a high count means the water needs a higher level of treatment. 


Coliform can come from soil bacteria or from human or animal waste carried through surface water. Falco said Colorado officials had no choice but to reclassify Ouray’s source under the Clean Water Act from “naturally filtered groundwater” to “under the influence of surface water.” 

Short term, Ouray could add more chlorine to the source water and continue delivering to residents. Longer term, Ouray needed the more elaborate treatment plant usually associated with a bigger city. 

And under federal rules, Falco added, “that does start a clock.” 

Ouray had 18 months from the 2021 notification to install and begin operating a plant. 

People hangout in hot springs as steam rises above the water.
Visitors to the Ouray Hot Springs Pool enjoy steamy temperatures during the winter months in this 2019 file photo. (William Woody, Special to The Colorado Sun)

“We’re at 80% design,” Funk said. “Things have been moving along at an incredibly fast rate and in spring we should be ready to actually start construction.” Finishing the plant and getting it online should take a year, he added

Still, the state’s water quality enforcement section says rules are rules. As was first reported by the Ouray County Plaindealer, on Jan. 10, the state sent Funk and the city a violation letter for “failure to provide adequate treatment of a public water supply.” Falco says upfront Ouray is delivering safe water right now. The violations began after the 18 month clock ran out, on Oct. 2, and are listed as “ongoing,” with a penalty range of $975 to $1,463. 

“Ongoing” sent the mayor into, well, a funk.  “We’re trying to play as nice as we can,” he said.

His concern was the city would be fined that much for every day until the plant is finished. 

Not so, Falco assures Ouray. 

“That’s not a per-day penalty whatsoever. It’s a one-time penalty,” Falco said. “And again, that’s kind of the maximum.” As long as Ouray keeps up its good faith efforts to finish a new treatment plant, Falco said, the state will work with them to minimize the fine. 

Ouray has hosted bitter battles over water quality before. In the 2000s, an entrepreneur built a bottling plant and created biodegradable bottles to market spring water as an environmental alternative. The plant shut down after its tests showed mold and bacteria in the water it bought from Ouray, but city and state tests said the incoming supply was fine. BIOTA never recovered from that and other business battles.

The state’s gentle stance on the current Ouray water fines don’t put much of a dent in the overall price of the dust-up for Ouray. The money to pay back the treatment plant loans has to come from water ratepayers, not general tax money, Funk said. 

“So at the end of the day, Ouray is going to have one of the highest water rates in the state,” Funk said. “I’ve seen charts. I don’t think it’s quite the highest, but it’s pretty much on the shortlist.”

A faraway look at Ouray nestled at the bottom of mountains in the summer.
Downtown Ouray is captured with a tilt/shift lens from U.S. 550 in this 2021 file photo. (William Woody, Special to The Colorado Sun)

Michael Booth is The Sun’s environment writer, and co-author of The Sun’s weekly climate and health newsletter The Temperature. He and John Ingold host the weekly Sun-Up podcast on The Temperature topics every Thursday. He is co-author with...