The Southeastern Colorado Water Conservancy District and the Bureau of Reclamation signed a contract Wednesday, October 7, 2026, to repay the federal government for the Arkansas Valley Conduit (AVC). The project will bring water to 50,000 people in the Arkansas Valley.

The contract was signed at the Southeastern Colorado Water Conservancy District in Pueblo.

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"This is an incredibly important day for the District, Reclamation and all of our constituents for the AVC," said Bill Long, president of the District Board of Directors. "We still have a long way to go, but we are moving forward. This is an important milestone."

Reclamation and the District are building the AVC together. Reclamation is building the 130-mile trunk line from Pueblo to Lamar. The District is building spur and delivery lines to connect 38 water systems to the trunk line. The total cost of the project is estimated to be $1.4 billion.

The AVC will serve people through cities, towns, water districts and private water companies.

Under federal law, participants must pay 35 percent of the AVC's cost. Any costs the District pays to build spur and delivery lines will count toward that 35 percent. The rest will be repaid with miscellaneous revenues from the Fryingpan-Arkansas Project. Most of that money comes from excess storage capacity contracts in Pueblo Reservoir.

The contract spells out who is responsible for design and construction. It also covers who owns the facilities. And it sets the repayment period to start when the AVC is substantially complete.

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Reclamation will keep ownership of the trunk line and related facilities it is building. It will also own the Supervisory Control and Data Acquisition (SCADA) System, the computer system that will be used to operate the AVC. The District will build and own the delivery lines. Any SCADA system it uses must meet federal cybersecurity requirements.

The contract reaffirms Pueblo Water's role in carrying AVC water through its system. That role follows the conditions in the 2022 Three-Party Contract between Reclamation, the District and Pueblo Water.

The contract also allows AVC water to be delivered to participants before the project is finished. It explains how costs for water, supplies and services will be split between the District and Reclamation before construction is complete.

When the AVC is substantially complete, the District will take over all operation, maintenance and replacement (OM&R) costs. The District is building a cost model to give reliable OM&R estimates at partial and full capacity.

At the signing, Long held up one of the golden frying pans sold up and down the Arkansas Valley in the 1950s. The pans raised money to promote the Fryingpan-Arkansas Project. That effort eventually led President John F. Kennedy to sign the Fry-Ark Project legislation. The AVC is the final project element of that original legislation.

"Without the Arkansas Valley Conduit, the Valley will not be developed as it would have been otherwise. You cannot attract industry without a supply of clean water," Long said.

Kevin Karney is chairman of the District's AVC Committee. He was an Otero County Commissioner when the AVC was relaunched in 2000. Karney was part of the group looking for a way to bring better quality water to the Lower Arkansas Valley.

"The only solution that has risen to the top is the Arkansas Valley Conduit," Karney said.

Also attending the signing were Tara Kinsey, Reclamation Resource Services Manager; Jeff Rieker, Reclamation Eastern Colorado Area Officer Manager; Marlon Duke, Reclamation Missouri Basin Regional Director; and Leann Noga, Southeastern District Executive Director.