Financial settlement reached over poop plant dispute

Crested Butte and Mt. CB Water and San settle years-long dispute

By Mark Reaman

After several years of administrative and legal talks over a financial dispute, the town of Crested Butte and the Mt. Crested Butte Water and Sanitation District reached a settlement that the town council gave a thumbs up to at the January 5 meeting. The district will consider the terms at its board meeting next week.

The town will finance the outstanding bill of approximately $1.8 million owed to Crested Butte by the water and san district related to a $19 million infrastructure improvement project made to the CB wastewater treatment plant, particularly the solids processing facility used by the water and san district. Talks over how to resolve the issue have been ongoing since 2022 and a recent in-depth mediation session brought forth a potential agreement.

Under the agreement, payment of the outstanding balance of $1.78 million will be made over six years at an interest rate of 5.5%. An initial payment of $298,310 was made at the end of December. The entire loan must be paid off before December 31, 2031.

“When we went into the meeting it was obvious everyone there wanted to reach a fair and respectful agreement,” said one of the town’s negotiators, councilmember John O’Neal.

The district and town work under an intergovernmental agreement (IGA) signed in 1996 that divvies up costs of operations and replacement. Original cost estimates put the bill to the water and san district at approximately $1.5 million. But in 2022 cost increases raised that amount to $3.3 million. Given the rising costs, the town “value engineered” the project to lower costs and upgrade only essential improvements. The larger project was cut from about $24 million to approximately $19 million. 

According to an October 2025 memo from Crested Butte town attorney Karl Hanlon, the water and san district has made three payments, including one for $1.5 million, but the town determined it still is owed $1.9 million. The district however told the town its staff and experts estimated it owed the town $1.78 million and they had proposed the district pay that amount to town over five years at a low interest rate.

The Crested Butte town council had agreed to accept the lower cost figure, but were not willing to finance the repayment at an under-market interest rate because they felt that would be a burden on the Crested Butte taxpayers.

The council decided it was important to provide some flexibility to the district that is facing some major infrastructure projects in the near future. So, six additional payments will commence in 2026, and under the agreement the town’s loan to the district will be in parity with any future debts of the district. 

Crested Butte mayor Ian Billick, the other town negotiator, said there is no prepayment penalty to allow and encourage the district to include any outstanding balance to the town with any future financing of other district projects. 

Hanlon told the council at the January 5 meeting that the loan agreement is modeled on the one used by the State of Colorado for funding water and sewer facilities. It complies with the requirements of TABOR, as well as providing protection for the town via a rate covenant should the district not have sufficient funds to pay the debt. A default interest rate at 12% is also set in the agreement.

“For us, the concern was time,” Billick told the council. “We felt this structure gives them strong incentives to pay this off early and it gives them some flexibility.” He said the agreement strikes a good balance for all involved.

“We are happy with the outcome,” concluded Billick. “It’s important for everybody that Mt. CB Water and San District thrives, providing critical services to our neighbors, ensuring our water quality and saving everybody money through sharing fixed costs. We found a way to give the district some flexibility, given some work they have in the pipeline, while ensuring CB residents are not subsidizing their development. Most importantly, we have a good basis for updating an old and ambiguous agreement which will reduce future confusion.”

Mt. CB Water and San district manager Mike Fabbre said the board will review and act on the settlement documents at the Tuesday, January 13 board meeting.