Fort Collins could end its decades-long effort to enlarge Halligan Reservoir and instead join the Northern Integrated Supply Project under a package of measures headed to the Fort Collins City Council on Tuesday.
City staff is recommending that council withdraw a federal permit application for the Halligan Water Supply Project, authorize agreements allowing Fort Collins to participate in NISP and move nearly $882,000 from the Halligan project to fund the city’s initial participation.
The proposal represents a significant change in the city’s long-term water-storage strategy. Fort Collins has worked since the late 1980s to enlarge Halligan Reservoir and formally entered the federal permitting process in 2006.
But city staff now says the Halligan project faces significant permitting uncertainty while NISP provides a more affordable and potentially more reliable path to additional water storage.
“The City’s participation in NISP appears more certain than the enlargement of Halligan Reservoir,” staff wrote in materials prepared for the October 20, 2026, City Council meeting.
Three decisions before council
The transition is divided among two resolutions and an ordinance.
Under Resolution 2026-119, the city manager would be authorized to withdraw Fort Collins’ application to the U.S. Army Corps of Engineers for a Clean Water Act Section 404 permit. The permit is necessary for the city to enlarge Halligan Reservoir.
Staff told council that the Halligan permit is likely to be denied under the project as currently proposed. Withdrawing the application would effectively end the active federal review of the enlargement, although the city would continue to own the existing reservoir and remain responsible for its maintenance.
Resolution 2026-120 would authorize the city to enter an interim participation agreement with the Northern Integrated Supply Project Water Activity Enterprise. The agreement would give Fort Collins a 5.8% share of the Glade Reservoir portion of NISP, equal to approximately 9,860 acre-feet of storage.
The resolution would also authorize a separate agreement governing the possible storage of water associated with some of the city’s existing water rights in Glade Reservoir.
Finally, Ordinance No. 148, 2026, would transfer $881,802.98 from the Halligan capital-project budget into the Water Fund’s operating budget.
The transfer includes $766,154 for the city’s 2026 NISP participation payment and $115,648.98 to reimburse the Northern Colorado Water Conservancy District for expenses incurred while evaluating Fort Collins’ proposed participation and water-storage needs.
Because the funding measure is an ordinance, council would consider it on first reading Tuesday. It would have to return for a second reading before final adoption.
More storage at a lower projected cost
The city initially pursued the Halligan enlargement to add approximately 8,200 acre-feet of storage. Staff’s preferred NISP option would provide approximately 9,860 acre-feet, or about 1,660 acre-feet more than the Halligan project.
An acre-foot is the amount of water needed to cover one acre of land with one foot of water. It is approximately 326,000 gallons.
City financial projections also show a substantial difference between the two options.
Staff estimates that the Halligan project would cost approximately $565 million over 40 years, including debt service, operations, environmental expenses and supporting infrastructure. Participating in NISP at the proposed level is projected to cost about $360 million over the same period.
That makes the NISP option approximately $205 million less expensive under the city’s current assumptions.
The NISP estimate includes about $35 million to rehabilitate the existing Halligan dam. Fort Collins would remain responsible for the reservoir even if the city abandons the proposed enlargement.
The estimates are not guaranteed prices. NISP’s final costs will depend on construction, financing, operations and the terms of a future allotment contract.
Rate increases would still continue
Moving to NISP would not eliminate planned increases in water rates.
Staff recommends retaining the city’s proposed 15% water-rate increase for 2027, regardless of which project moves forward. Officials said maintaining that increase would preserve the financial capacity needed to support the city’s water-storage plans.
The difference would become more apparent in later years.
Under the Halligan scenario, staff projected water-rate increases of 15% in 2027, 2028 and 2029, followed by increases of 10% in 2030 and 2031. Under the NISP scenario, the projected increases would fall to 8% from 2028 through 2030 and 5.5% in 2031.
Revised rate recommendations could be presented beginning in 2028 if council approves the transition.
More than $50 million already spent on Halligan
Fort Collins has budgeted approximately $76.7 million for the Halligan project since 1999. Of that amount, the city has spent about $50.3 million and encumbered another $7.9 million.
Approximately $18.4 million remains unspent and available.
The encumbered amount includes about $7.3 million in completed environmental mitigation credits that staff believes may be recoverable. The agenda materials do not identify how much of the city’s other Halligan spending could be reused or recovered if the enlargement is discontinued.
The proposed $881,803 transfer would come from the remaining Halligan balance.
Past Halligan expenditures do not necessarily mean continuing the project is the more economical option. Much of that money has already been spent regardless of which alternative the city chooses. The decision before council centers on the cost and feasibility of the projects moving forward.
Opponents question costs, water supply and public process
Opponents urged the Fort Collins City Council to reject the proposed shift away from raising Halligan Reservoir, arguing that the project remains the city’s best long-term water-supply option.
In written comments submitted to the city, residents criticized the prospect of joining NISP, contending that it could expose Fort Collins ratepayers to uncertain costs without guaranteeing how much water the city would ultimately receive.
One frequently cited criticism came from former Greeley Water manager Chris Fletcher, who argued that “major spenders like Fort Collins-Loveland are being asked to risk unlimited costs with no promise of delivered water amounts.”
The proposed interim agreement caps the city’s immediate 2026 obligation, but the final construction, financing and operating costs would be established through subsequent agreements and an eventual long-term allotment contract. The city would also need sufficient water and the necessary approvals to use the proposed storage capacity.
Opponents questioned why Fort Collins would move away from infrastructure developed around water rights already held by the city.
“Why should Fort Collins stop investing in infrastructure designed around its own long-held, reliable water rights and instead rely on a regional project built around a less-reliable water supply?” one comment asked.
The city’s proposed agreement could allow Fort Collins to place water associated with some of its own rights into Glade Reservoir, rather than relying exclusively on water supplied through NISP. However, specific diversions, storage and releases would remain subject to legal, operational and project approvals.
Several residents also called on council to delay its decision and conduct a broader public process before abandoning the Halligan enlargement.
“Postpone the vote on this ordinance and create a transparent process for citizen input to this decision,” residents urged in written comments.
The requests reflect concerns about the speed and timing of the proposed change. Although the city has evaluated water-storage alternatives for years, the specific recommendation to withdraw the Halligan permit, join NISP and redirect Halligan funding would come before council as one coordinated package.
NISP commitment would begin in stages
Tuesday’s vote would not approve the full long-term cost of joining NISP.
The proposed interim agreement covers the city’s participation during 2026 and limits its immediate financial obligation to the amount specified in the agreement. Fort Collins could terminate the agreement, but payments already made would generally not be refunded.
The city expects another interim agreement in early 2027, with an anticipated payment of approximately $1.5 million. Interim agreements would continue until Fort Collins and the NISP enterprise negotiate a final allotment contract setting the city’s long-term financing and participation terms.
That means council would have additional funding and contractual decisions to make before the city becomes a permanent NISP allottee.
Still, withdrawing the Halligan permit and beginning NISP participation would make NISP the city’s preferred storage strategy. Reversing that decision later could become more expensive as the city makes additional payments and Halligan’s permitting process comes to an end.
Environmental impacts shift to the main stem
The proposed transition would also change where the environmental effects of the city’s storage project occur.
The Halligan project would enlarge an existing reservoir on the North Fork of the Cache la Poudre River. NISP involves new diversions from the main stem of the Cache la Poudre River and construction of Glade Reservoir northwest of Fort Collins.
NISP has long generated concerns about reduced flows through the Poudre River as it passes through and downstream of the city.
The project’s environmental commitments include mitigation flows, fish-passage improvements, wetland mitigation, wildlife-habitat conservation and a program intended to preserve some peak flows in the river. Fort Collins also participates in a regional adaptive-management committee associated with the project.
City staff argues that becoming a participant would allow Fort Collins to remain directly involved in NISP’s environmental management and regional water-quality monitoring.
Participation would not eliminate the project’s environmental impacts. Instead, council must weigh those effects and mitigation measures against the regulatory uncertainty surrounding Halligan, the projected cost savings and the additional storage offered through Glade Reservoir.
Why the city is reconsidering Halligan now
Staff identified several developments that led to the recommendation.
Some existing NISP participants have reduced or ended their involvement, making additional capacity available to Fort Collins. NISP has also received its principal federal authorization and is moving closer to construction, while Halligan remains in the federal permitting process.
Staff concluded that the opportunity to join NISP may be limited and that continuing to spend money on Halligan’s uncertain permit would expose ratepayers to greater financial risk.
If council approves the complete package, Fort Collins would stop trying to enlarge Halligan, join NISP on an interim basis and begin pursuing the use of Glade Reservoir to store water connected to city-owned rights.
The existing Halligan Reservoir would remain part of the city’s water system. What would end is Fort Collins’ current effort to make it substantially larger.
Source: Fort Collins City Council agenda packet for Oct. 20, 2026, Item 19, and written public comments submitted to the city.
We’re building independent local journalism from the ground up. You can help fund our launch by donating at fcreport.org/donate.