A nonprofit water utility is taking the City of Glenwood Springs to court over who should provide water service to parts of West Glenwood that are being redeveloped.
It’s life or death for the small shareholder-owned company that predated the City’s annexation of the area in the 1980s.
Last year, the Mitchell-Cooper Ditch and Pipeline Company sued the City for allegedly violating a long-standing contract when it agreed to a Roaring Fork Transportation Authority (RFTA) request to add its new Iron Mountain Place employee housing complex as a city water customer.
The former Rodeway Inn motel on Highway 6 & 24, which RFTA purchased in 2022 to convert into housing, had been part of the Mitchell-Cooper system.
A 1984 agreement between the City and Mitchell-Cooper includes provisions that the City will not provide water service to any of the company’s shareholders without prior written consent from the company.
That didn’t happen, said Arthur Rothman, the president of Mitchell-Cooper for the past seven years and a shareholder in the company who owns rental properties in the service area.
“We’re seeking to enforce the contract, which says the City cannot do what they’re doing and that they have to stop,” Rothman said, speaking on behalf of the 30-some Mitchell-Cooper shareholders and the company’s board of directors.
RFTA is also named in Mitchell-Cooper’s lawsuit, for allegedly failing to negotiate with the company before going to the City.
More recently, in April of this year, the City again agreed to bring the new 80-unit Canyon Vista affordable housing project onto the city water system. That property, where the Glenwood Gardens nursery — with its iconic greenhouse that came from the Redstone Castle — once operated, also had long been part of the Mitchell-Cooper system.
In both instances, and even dating back to the City’s approval of the Six Canyon Apartments in 2017-18, Rothman maintains it was a breach of contract for which Mitchell-Cooper should be compensated.
Without water customers contributing to a financial base to make needed system upgrades — including a new water treatment plant estimated to cost between $1.5 million and $2 million — the company will likely go bankrupt.
Rothman believes that’s the City’s intent.
“It’s ironic to me that this contract was written by the city attorney and signed by the mayor [at the time], and now they’re saying it’s not a valid contract,” he said.
Complicating matters, though, and playing into the City’s counterclaims in the lawsuit, is the fact that Mitchell-Cooper has been unable to provide potable water to its customers since 2018 when it came under a state boil order.
Through an interconnect between the two systems, Mitchell-Cooper now buys water from the City and sells it to its remaining customers. They include about 60 mobile home park residences, a few stand-alone homes, four motels and a smattering of other commercial properties fronting Highway 6 & 24.
City Attorney Karl Hanlon briefed Glenwood Springs City Council on the situation during a March 20, 2025, meeting.
With no progress in seven years toward being able to adequately treat their water, and with its customers relying on city water, Mitchell-Cooper has essentially ceased to exist as a functioning company, Hanlon said.
At the same time, it’s the City’s responsibility to ensure its residents have a safe water supply, including those on the Mitchell-Cooper system, he said.
“What this is about is the failure of that system to provide for the health, safety and welfare of its customers, and the City stepping up to fill that gap,” Hanlon said. “Now we’re taking a beating for that.”
Mitchell-Cooper was formed long before the City annexed the West Glenwood area in the early 1980s, in an effort to bring the then newly built Glenwood Springs Mall onto the City’s sales tax rolls.
It’s a throwback to the 1950s when Glenwood began to boom as a post-war tourist destination for its famous hot springs and Old West attractions. The highway running west of town, before Interstate 70 was constructed, became a natural place for motels, homes and other businesses to support the tourist trade to be built.
Mitchell-Cooper was formed to provide both treated water and raw water to the area, utilizing an 1882 water right on Oasis Creek — one of the most senior rights in the state, Rothman said.
“We look at this as a property right,” he said. “This water has value, and when people buy or sell property in our service area, that water right is part of the value.
“If we stop being a water provider here, those water rights go up for grabs, and it could go to a developer who wants to develop something that the City has no control over,” Rothman argued.
The 1984 agreement with the City regarding water service was admittedly favorable to Mitchell-Cooper, Hanlon said during his March 20 remarks to City Council.
But the other major issue is that the system is incapable of providing the kind of water flows needed for fire suppression sprinkler systems that are required in newly developed commercial and multi-family residential properties, Hanlon pointed out. That ended up being one of the main reasons that Canyon Vista, the RFTA redevelopment and Six Canyon were prompted to go onto city water.
Hanlon said the City has tried to negotiate a favorable agreement to take over Mitchell-Cooper’s system infrastructure, and for its customers to transition onto city water, including fee waivers to make it less expensive. Instead, they decided to sue, Hanlon said.
Rothman counters that the City’s proposals did not include enough compensation and other assurances to make them acceptable.
At the same time, he said the City rejected Mitchell-Cooper’s offer to create a functioning dual water supply that would be aimed at preserving some of the last remaining affordable housing options in Glenwood, and creating new ones through additional motel conversions.
“This dual water supply system exists in many parts of Colorado, including Carbondale [in the Satank area], and is acceptable to [the state health department],” Mitchell-Cooper wrote in a January 2022 proposal.
With such a plan in place, and an adequate customer base, Mitchell-Cooper could make progress toward building the water treatment plant and making other system upgrades, Rothman said.
As it stands, those matters are now before a judge in Garfield County District Court. The case is still in the discovery phase, and no hearings are currently scheduled.