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HomeMy WebLinkAboutWater Board - Minutes - 02/16/1996WATER BOARD MINUTES February 16,1996 3:00 - 4:48 p.m. Water and Wastewater Utility Conference Room 700 Wood Street COUNCIL/WATER BOARD LIAISON Chuck Wanner WATER BOARD PRESIDENT Paul Clopper - 223-5556 STAFF CONTACT Molly Nortier - 221-6681 MEMBERS PRESENT John Bartholow, Vice President (Filling in for President), Terry Podmore, Robert Ward, Howard Goldman, Alison Adams, David Lauer, Ray Herrmann, Tom Brown, Tom Sanders STAFF Mike Smith, Wendy Williams, Gale McGaha Miller, Dennis Bode, Ben Alexander, Beth Voelkel, Molly Nortier GUESTS John Bigham, Northern Colorado Water Conservancy District Sue Ellen Charlton, Observer, League of Women Voters MEMBERS ABSENT Paul Clopper, President, Dave Frick Acting President John Bartholow opened the meeting. The following items were discussed: MINUTES The minutes of January 19, 1996 will be approved at the March 22, 1996 meeting. UPDATE: NORTHERN COLORADO WATER CONSERVANCY DISTRICT John Bigham distributed three handouts: a news release from Waternews as of February 13, 1996 announcing the South End Delivery Policy for the '96 season, a letter to CBT Project water users from the Northern District, dated February 16, 1996, and the Snow/Precipitation Update as of February 16th. Water Board Minutes February 16, 1996 Page 2 Mr. Bigham announced that both the Colorado River and the South Platte Basin are above normal. He also related that their weather expert from Creighton University in Nebraska is predicting that we could be headed towards a dry cycle similar to the one in the 50s. He said that the news release and the letter provide further details about the aftermath of the Flatiron pump explosion. After further investigation, the core doesn't appear to be damaged too badly. They may have to repair parts of it, but perhaps not as much as they had anticipated. If things go as they hope, the cost for replacement on that may be closer to $2 1/2 million rather than the $5 million earlier estimate. He announced that the District will be having a meeting on March 7th which will deal primarily with Carter going south and how that affects the lower end. "What there is in Carter now is it unless there is major precipitation over the reservoir, which is highly unlikely." There is a chance that the pump may be installed by September or early October. In the meantime, the District is trying to do a study on a possible bypass that would go around the pump and allow water to go into the pressure tunnel at the bottom of Carter; it would be filled by bypass rather than with a pump. "If that happens there is an indication that in late July or maybe in August that bypass may be in place." He added that the power companies are interested in perhaps installing a generator, so we may have a power generation aspect in the study. The District's next Board of Directors meeting is March 8th, he announced. He again invited anyone who is interested to attend. The District has set the date for the spring water users meeting for April 10th at the Holiday Inn in Fort Collins. Terry Podmore asked if the pump is being paid for by the Bureau. Mr. Bigham said, yes. "Who will pay for the bypass?" "The District will be primarily responsible for that," he replied. "However if the power companies become involved for power production, there will be some participation by the power entities." He added that decisions like who pays what will be decided in the study. He mentioned that the only restrictions that the Board is going place on the south end will be a 50% quota with a 40% carryover, and they will allow no transfers from the north to the south unless something comes from the south to the north "so we can net out zero, since we only have 77,000 ac- ft of water." Dave Lauer asked for more information on the cause of the explosion. According to the Bureau's news release, as Mr. Bigham understands it, there is power input at the top of the motor pump and one at the bottom, and the breakers and relays (18 sets of them) that should have tripped out in milli- seconds took 32 seconds before they tripped. The indication was that, No. 1, there were bad breakers and relays, and No. 2 there might have been a lack of maintenance at the operation. There will definitely be a different set of annual operating procedures because there were mistakes, and some procedures that weren't followed correctly, he said. Another conclusion was that the operator should have pulled a different switch. Water Board Minutes February 16, 1996 Page 3 John Bartholow asked about the Coordinated Reservoir Operations Study relating to Green Mountain that was mentioned in the District minutes. The BOR and the districts are doing that study in reference to the South Platte Recovery Program. It is a study of how to make releases out of Green Mountain, out of Lake Granby, out of Williams Fork, which is Denver's system, and out of Wolford Mountain. They will determine where is the best place to release it, and when to release it, to make up each river segment. The study also includes the tributaries which come from Reudi Reservoir on the Frying Pan River to get the water down to the 15 mile reach. It will be accomplished with the cooperation of the Fish and Wildlife Service, the Bureau and the Recovery Program which involves all the entities from the lower Colorado River. The Bureau will be the lead agency. PROPOSED SURPLUS WATER RENTAL RATES Each year, after the irrigation companies have established their annual assessment rates, the Water Board recommends the rental rates for the City's surplus water to the City Council. The table below shows the proposed rental rates for 1996. The water assessments and rental rates for 1996, as well as the corresponding rental rates for 1994 and 1995, were listed on a separate sheet. The proposed rates are based on several factors including past rental rates in the area, current assessments, and anticipated supply and demand conditions. The rental prices for CBT, North Poudre, and Water Supply and Storage Company shares are based primarily on market rental rates since there is an active rental market for these shares. With the limited rental market for the remaining ditch companies, the rental prices are based primarily on assessment rates. Staff recommends that the following rental rates be adopted: Tyne of Water NCWCD Water (CBT) North Poudre Irrigation Co. Water Supply and Storage Co. Pleasant Valley & Lake Canal Co. New Mercer Ditch Co. Larimer County Canal No. 2 Arthur Irrigation Co. Warren Lake Reservoir Co. Joe Wright Reservoir Water Sherwood Reservoir Co. Sherwood Irrigation Co. Proposed 1996 Rental Charge* $ 16.00/ac-ft $ 90.00/share $ 2,100.00/share $ 130.00/share $ 300.00/share $ 220.00/share $ 12.00/share $ 110.00/share $ 30.00/ac-ft $ 5.00/share $ 440.00/share For late season rentals, rates may be adjusted to reflect the remaining yield or the prevalent market price of the water stock being rented. Water Board Minutes February 16, 1996 Page 4 Beth Voelkel explained that staff bases rates for the first four entities on market value; the others are primarily based on the assessments the City must pay. "Usually in February, we ask the Water Board to recommend the rates to the City Council," she said. Tom Brown asked why the assessment on Warren Lake went to zero. Warren Lake received money from land they sold, which covered their assessments for several years. However, the City still needs to charge for that water because there is somewhat of a rental market for it, Miss Voelkel replied. Terry Podmore noticed that for Sherwood Reservoir and Sherwood Irrigation there isn't a conversion in terms of shares and acre feet. "For the people that use those shares, it is actually Arthur Ditch water, and it's stored at Sherwood Reservoir and run through the Sherwood Irrigation System. The City pays assessments to have Arthur Ditch water run through the Sherwood system," Miss Voelkel explained. "It looks like we have raised the rate and lowered it again on CBT," Ray Herrmann observed. CBT water is based primarily on market value, Miss Voelkel noted. "At about this time a year ago, we were having a very dry spell. There was a high demand, but very little water was available. The opposite is occurring now. John Bartholow pointed out that John Bigham reported that their weather expert is predicting a 50s-type drought that could begin this year. Mr. Bigham stated that "we are still going to have a lot of water; particularly in the northern part of the state." Mr. Bartholow asked how staff defines "late season"; is that a specific date? "No," Ms. Voelkel replied. "Most of our rentals do not occur in late season. I would consider late season as after irrigation is in full swing (July, August perhaps). Later in the season we use CBT for rentals as people discover that it's drier than they thought it would be." "Did you say that last year the rental rate on CBT dropped to $15.00/ac-ft because demand was down?" Mr. Brown asked. "Yes, I even heard of some people renting it at the end of the year for $12.00," Miss Voelkel replied. The City dropped its rate to $15.00 last year, but that was not until July. "Would the City raise the rate above $16.00 if there was great demand later this season?" Mr. Brown continued. "I think we probably could if we entered a situation where we had considerable demand," Dennis Bode responded. "So is supply and demand the main factor?" Howard Goldman asked. "Especially for the CBT rate," Miss Voelkel answered. "The other factor is how much CBT water is expected to be available," Mr. Bode said. "It can change fairly rapidly in the summer," he added. Mr. Goldman wondered how staff arrives at these numbers. "For one thing, we make phone calls," Miss Voelkel replied, and Mr. Bode commented that "it also is somewhat intuitive in just the experience of what happens to the rental market during the season. We also look at the supply and demand conditions." Water Board Minutes February 16, 1996 Page 5 Mr. Brown pointed out that last year staff started out with their best guess and then conditions changed and they needed to react to those changes, "which makes perfect sense. I was just trying to see if we react in both directions, which sounds reasonable," he commented. Ray Herrmann moved that the Board recommend the proposed surplus water rental rates to the City Council. Terry Podmore seconded the motion. John Bartholow asked is there was further discussion. Dave Lauer, who is a new member, asked staff to explain the concept of rental rates. "What happens is the City makes a determination of how much water is needed for the City's use," Miss Voelkel began. Any surplus above the City's anticipated dry -year demand could be made available for rental. Plus, the City has other sources of water, such as Water Supply & Storage Co. shares, that haven't been transferred through water court and are not available for the City to use through its pipeline. Staff rents those mostly to irrigators and a few other municipal users. "So these are all sources of water that we own by virtue of paying something to all of these people?" Mr. Lauer asked. The City pays assessments to keep the ditch water running and cover maintenance costs, and what the City doesn't use it rents, Miss Voelkel responded. "Why is there such an incredible difference among the ditches?" Mr. Lauer asked. "Does it have to do with the quality of water?" "A lot of it relates to the volume that is in a share," Miss Voelkel explained. For example, a share of Water Supply & Storage is considerably more water than a share of North Poudre. She also clarified that on CBT, the assessment rate is per unit, whereas our rental rate is per acre foot. "Are we renting CBT below what it's costing us?" Mr. Brown inquired. "Yes, it actually is below," Miss Voelkel said. She explained that if, for example, we have a 50% quota this year, then for every unit we only get half an acre foot. Tom Sanders asked where the rental money goes. Mike Smith said that it goes to the water fund that pays for our assessments; operation and maintenance. "We usually don't make money; we basically break even," Mr. Sanders observed. Last year the City brought in $428,000 in revenue for rentals and paid $522,000 in assessments, which also includes the assessments for the water that the City uses, Miss Voelkel explained. "So that number is total assessments, not just for rental water," Mr. Brown clarified. "That's right," Miss Voelkel replied. Mr. Bode added that the rental revenue goes a long way in offsetting the cost of all the assessments. Mr. Bartholow called for the question. The vote was unanimous to recommend the proposed surplus water rental rates to the City Council. FINANCIAL AND MANAGEMENT POLICIES The following information was included in the Board's packets: Water Board Minutes February 16, 1996 Page 6 Proposed Changes to the City's Financial Policies b. Water & Wastewater Utilities 2. Working Capital Reserves The following reservations of working capital shall be established and maintained in each utility in the following priority: * Debt Service Reserve -- equal to the amounts restricted to debt service by bond ordinance. * A-B Capital Reserve -- equal to the amount of bond proceeds available and restricted for projects relating to the Anheuser-Busch Brewery. * Operating Reserve -- at least equal to 2% 5% of the actual or projected operating revenue for the year. * Water Rights Reserve -- equal to the amount of cash in -lieu -of water rights payments and raw water surcharges minus any expenditures for acquiring water rights. * Capital Reserve -- equal to the amount of working capital available after the above thw four reserves have been satisfied. * Art in Public Places Reserve -- This reserve is restricted to Art in Public Places Program use. Appropriations from this reserve and subsequent expenditures are restricted to the acquisition or lease of works of art that provide a betterment to the Water and Wastewater Utilities or that are otherwise determined by the City Council to be for a specific utility purpose that is beneficial to the utility rate payers, and for the maintenance, repair or display of such works of art. The reserve is funded by amounts equal to 1 % of eligible requested capital project appropriations in excess of $150,000. Wendy Williams began by saying that when staff presented the budget to the Board in September 1995, they talked about the net income requirement as it currently reads. At that time staff said that they would be returning to the Board with some suggested changes; specifically what is included in "full cost of operating and maintaining the Utility plant." "As Mike Smith began working on this, he decided that to include everything would be so complicated that it would be cumbersome," she related, "so we have decided to recommend leaving it as is." E Water Board Minutes February 16, 1996 Page 7 Staff is suggesting making some changes to the reserves in response to some of the issues raised by Board members. Those changes would involve looking at increasing the operating reserves from 2% to 5%, and adding a water rights reserve. "We have defined the water rights reserve as the way we currently do business, which is equal to the amount of cash in -lieu -of water rights payments which we receive from developers, plus any water rights surcharges that we collect from our commercial accounts, and subtract from that whatever we spent to purchase water. That would be what's in our reserve," she explained. "Are these items listed in priority?" Dr. Sanders asked. "The reserves are listed in order of priority on the handout. The Capital Reserve is equal to the amount of working capital available after the other reserves have been satisfied," Ms. Williams replied. Mr. Sanders wondered if the 5% Operating Reserve is what normal private enterprise uses. That still seems low," he said. "It depends on how volatile their revenues are," Mike Smith responded. "Before the Utility moved from a flat rate to the metering/flat rate, 2% was great. We are fairly comfortable with the 5%. We probably won't see that big of a swing, but there could be," he said. "If we don't use this 5% reserve, after a year, does it go back into the general fund?" Mr. Sanders asked. "It goes into the water fund," Mr. Smith replied. Mr. Bartholow asked Howard Goldman, the Legislative and Finance Committee Chair, to summarize the committee's conclusions on these changes. The Committee met prior to the Board meeting, he said, and spent considerable time discussing the impact of metering. The Utility is losing the financial certainty that the flat rate provided, since the metering program has been implemented. "Now we find it necessary to look at the need to increase the reserves, and how we can increase them without unduly affecting the basic consumer rate," he reported. "The committee members seemed to feel that 5% wasn't a drastic step, and they supported it," he concluded. Terry Podmore asked what the current mix is between metered and flat rate. Ms. Williams said that 40% of the duplexes and single family are now metered; that includes new construction and volunteers. "How does it break down in terms of water supply?" Mr. Podmore continued. Mr. Bode said there is a larger percent that is metered because all the commercial accounts are metered; it's probably close to 50-50. "Has the City ever had to borrow money for utility operations?" Ray Herrmann asked. "No," Mr. Smith replied. "We have never been at a point where we didn't have capital construction," he said. "We've never set a limit to capital expenditures, but internally we set a minimum of $4-5 million. We have $100 million+ inventory in facilities, and the $4-5 million is about 4-5% of that to have on hand in case anything happens," he explained. "Isn't that a little low for capital reserves?" Dr. Sanders asked. "That depends on how bad and how old your facilities are, and ours are in pretty good shape," Mr. Smith responded. Some of the eastern cities maintain a larger percentage of reserves, he added. Water Board Minutes February 16, 1996 Page 8 Ray Herrmann moved that the Board recommend approval of the proposed changes to the City's financial policies, and Alison Adams provided a second to the motion. Tom Brown asked what contributes to the capital reserve. "Rates and PIFs," Mr. Smith replied. "Would it be a good idea to keep rates and PIFs separate?" Mr. Brown wondered. "We have talked about that, and actually the City attorneys are looking at that, and trying to determine how it should be done," Mr. Smith answered. "Once you do that, you must develop the entire accounting system for everything that goes in and out; that's a lot of paper work!" he stressed. "Given that the attorneys are looking at that, does it make sense to adopt this as a policy now if it might change in the near future?" Mr. Bartholow asked. "It probably won't change before the Council needs to adopt this in March," Mr. Smith said. "We will probably work on this during the year and perhaps revise it at this time next year," he added. "Does the Utility keep track of PIFs?" Mr. Brown asked. "They are not separately tracked and they are not in separate accounts," Ms. Williams pointed out. "Even if they were in two separate accounts, couldn't they be in the same reserve?" Alison Adams asked. "They could be in the same reserve but it wouldn't necessarily change this policy," Mr. Smith stated. "They are collected as PIFs, but we don't keep track of where the dollar goes," he clarified; "we know in general where they go, but not specifically." "Even in terms of our capital projects, some are funded partially by regular rates," Ms. Williams noted. "We don't have a system that tracks all of that to make sure that what is going into PIFs is coming exactly out of PIFs for a given project." "Would a tracking system for that be valuable?" Dave Lauer inquired. "It's actually more trouble than it's worth," Mr. Smith asserted, "but we may have to do it to meet cost of service state legal requirements in the future." Mr. Smith said the Utility ran some figures over a long period of time regarding what "we have collected and what we have spent. It's amazing how close they are," he said. "But keeping track and matching them is difficult. For example, if you build a project at a certain capacity, that capacity must be allocated to something that is unused, and, of course, you haven't collected that money yet. It is complicated to try to make sure everyone pays their fair share," he stressed. Howard Goldman asked for a clarification of the motion. Mike Smith and Wendy Williams stated that the motion relates only to the Working Capital Reserves item which changes the operating reserve from 2% to 5%, and adds a Water Rights Reserve (equal to the amount of case in -lieu -of water rights payments and raw water surcharges minus any expenditures for acquiring water rights). The Capital Reserve would be equal to the amount of working capital available after the four reserves, previously three, are satisfied. John Bartholow called for the question. The vote to accept staffs recommended changes was unanimous. Water Board Minutes February 16, 1996 Page 9 STAFF REPORTS Treated Water Production Summary Dennis Bode reported that 1,303 Ac-ft was used in January which was about 90% of what was projected. He said that, unlike this year, in most Januaries there is some lawn watering. He noted that there was .9 of an inch of precipitation in 1996 compared with the .41 average. Staff has been reviewing some of the South Platte basin information. It shows that the precipitation was about 300% of average in January. Financial Status Report Members received copies of the January, 1996 Financial Status Report in their packets. Wendy Williams reported that revenue and PIFs were up from January. Quarterly Utility Report The Utility quarterly report was included in the packets as an information item. Mr. Bartholow asked if there were questions about that material. "Under the water quality analysis, what is HPC," Mr. Bartholow asked. Gale McGaha Miller replied, "Heterotrophic Plate Count. Heterotrophs are a broad group of microbes. We don't want many of those in the water," she said. "Obviously there are some in the water," Mr. Bartholow pointed out. "We don't deliver sterile water," Ms. McGaha Miller asserted; "the key indicator for safe water would be the total coliform," she explained. Mr. Bartholow also didn't recognize two other abbreviations: SPDR and LA. LA means lab accident she said; e.g. "someone dropped a bottle and it broke on the floor, and SPDR means spreader. When an organism forms a colony on a petri dish, instead of making a circle or a colony, it spreads out and sometimes grows over other colonies," she said. "We need not be concerned about these? Mr. Bartholow asked. "No," she responded. Dave Lauer asked why the Mulberry facility flow becomes nothing from May through November. "The plant is being shut down for some modifications," Mr. Smith said, "so all the wastewater is being processed at the Drake facility." "When will the Mulberry Plant come back on line?" Mr. Lauer asked. "Sometime before the summer; possibly May or June," Mr. Smith answered. He added that the disinfectant will no longer be chlorine; there will be one cylinder there for backup and if they have to chlorinate some of the feed or return lines. "Will the same thing be happening at the Drake Facility?" Mr. Lauer inquired. "Possibly, depending on our experience at the Mulberry plant," Mr. Smith responded. "Are you doing it as a research project?" Mr. Sanders asked. "We'll keep track of it, but it's actually full scale," Mr. Smith said. Tom Sanders asked about the impact of the Busch plant on the Drake facility. "They usually send theirs in the winter; last year they didn't send any at all," Mr. Smith replied. "How much notice do they give the Utility before they come back in?" Mr. Sanders continued. "Not too long sometimes, perhaps a couple of days to a week," Mr. Smith said. Water Board Minutes February 16, 1996 Page 10 Potential Dates for Water Board Workshop Mike Smith reported that Molly Nortier had discussed possible dates for the Water Board Workshop with AnneMarie Bleiker; she and her husband are consultants for the Institute for Participatory Management and Planning in California. Mr. Smith mentioned first that the Storm Drainage Board had their workshop with the Bleikers last week and he sat in on part of it. "It seemed that everyone enjoyed it and felt it was beneficial," he said. The dates in May were Friday the 24th, possibly from noon until dinner and continue after dinner, or Saturday all day on the 25th. There was another option for Saturday, June 22nd. Also, the Bleikers will be in Boulder on Friday June 14th. "It is possible we could combine with another group there." None of the dates worked out for the majority of the members present. They eventually came up with a date that appeared to be a possibility for all of them, and that was Friday, September 20th. Ms. Nortier will check with the Bleikers to see if it would work for them, and also contact the two Water Board members who were absent to see if the date would fit into their schedules. Status of Current Legislation Gale McGaha Miller related that there is considerable legislation "out there" but very little of it is relevant to the water utilities. Meadow Springs Ranch Ms. McGaha Miller reported that there was some late breaking news regarding the Meadow Springs Ranch. The City has an offer for the full appraised price of land on the east side of the ranch. The potential purchaser has shown interest in working with the City on a conservation easement for the sub -irrigated wet meadow area allowing the City perpetual access once a year or so to study it. It would restrict development on the main area of the ranch to nothing smaller than 80 acres. The potential purchaser would run either cows or buffalo on the land. "We may have something more definitive to bring to you next month," she said. "Are you saying that it may be subdivided to the 80-acre size, or that there would be additional development by a single owner of an 80-acre area?" Mr. Bartholow asked. "One of the stumbling blocks for trying to sell this piece of land is that some Council members want us to make sure that it is not sub -divided at all; that wreaks havoc with future plans that anybody might have for that land," Ms. McGaha Miller pointed out. The party who is trying to buy it, and all the others who have been interested in the property, all plan to graze it with cattle or other livestock, but very few are willing to enter into anything that would restrict their ability to develop that land in the future, she stressed. The current bidder is willing to agree to restrict the land to below 80-acre parcels. Mike Smith indicated that that may not be satisfactory to the Council. Ray Herrmann asked what the size of that piece of land is. "It's 4600 acres," Mr. Smith answered; "Of which about 450 acres is the sub - irrigated wet meadow," Ms. McGaha Miller added. Mr. Smith reminded the Board that a few years ago, when the City purchased all the school sections and filled in the ranch, "we also suggested that we didn't need a portion of the ranch and could sell Water Board Minutes February 16, 1996 Page 11 part to make up some of the difference in cost. We spent around $750,000 to file the school sections. We said at the time, if we had to sell any of it, the east side of the ranch was less useful to us." "It appears there is a real chance that the Council will not approve the sale without a total restriction of subdivisions," Mr. Herrmann remarked. "Does the appraised price take into account the possibility of developing it?" Tom Brown asked. "It was appraised in 1993 and the best, highest and most profitable use of the land that formed the basis of the appraisal was cattle grazing, but that was before we found out about the rare plant. That did not assume any deed restrictions at all, and most ranchers will buy land based on appraisal for ranching to make sure it's profitable for them to ranch it, but they must keep their options open for the future," Ms. McGaha Miller explained. "We're not clear what a conservation easement does to bring down the value of that meadow," she added. "What about the wetland; they're not going to de -water, are they?" Dr. Sanders asked. "No, one of the pieces of language in the letter of intent restricts them from intentionally drying out the wetland," Ms. McGaha Miller replied, "and that they will not cultivate it either, but they might grow hay." "When did the City buy the ranch and where is it located?" Robert Ward, a new member, asked. Ms. McGaha Miller stated that the City purchased the 26,000 acre Meadow Springs Ranch in 1990 as a long term place to use the Utility's biosolids. "We've done a number of studies to determine the appropriate loading rate that is beneficial to native grasses," she related. She said the Ranch is located on both sides of I-25, and the piece up for sale, on the east side, is mostly hilly, and some of it is a wetland, so it's not very useful to the City in the long term. Mr. Ward asked how far up the interstate it is to the border. "It begins at the Buckeye Exit and a small sliver of it actually touches the Wyoming border," she said. She offered to take any members who are interested on a tour of the Ranch. Mike Smith indicated, on a map, the location of the Ranch; he also pointed out the different sections, including the portion that is up for sale. Dave Lauer said he understands that the area is a pure water source. "What will be the effect of the sludge on that?" "We have studied the aquifer quite extensively," Ms. McGaha Miller said. "We have nine monitoring wells throughout the Ranch, considerable background data, and have done a series of test plots. We looked at vegetative response to varying rates of biosolids applications to see what brings the most benefits to the plants without causing problems. Some test plots were located on the side of the hill to see if there was a problem with rainfall washing down the sludge. Studies were done with lysimeters and tensiometers to track the travel of moisture through the soil. "We have done considerable research up there to make sure that anything we did would not invade the groundwater," she concluded. Mr. Smith said if anyone was interested in the technical data, staff could provide them with "piles of it." Staff will try to set up some tours of the Ranch in a couple of months when the weather is better. "What is the pressure now to sell the section east of I-25?" Mr. Brown asked. "When we acquired the State Land Board land, it cost us about what the east side is worth," Ms. McGaha Miller replied. Water Board Minutes February 16, 1996 Page 12 "Has anything changed regarding where the proceeds go," Mr. Brown continued. "It goes to the Wastewater Plant," Mr. Smith said. He added that "if we can't get a good price for it, we're not interested in selling. We're not broke from not selling it." "We're generating some revenue from grazing fees," Ms. McGaha Miller added. "Maybe we should be saying, after we pay the realtor we want $725,000," Mr. Smith advised. Tom Sanders said he agreed with that. "Is there any reason for not keeping it?" Mr. Lauer asked. "You're not losing anything by keeping it; it would be there to sell in later years," Mr. Brown remarked. "On this one issue maybe the Board has some direction they would like to provide us regarding the sale price," Mr. Smith suggested. "Should we get a consensus from the Board that you might want us to get our money back, which means the selling price should be higher than the appraisal. Does that make sense?" he added. Mr. Bartholow said he felt sure that Council would want staff to do that. Ray Herrmann remarked that "there is no reason to give the property away." He added that he didn't think that even 80 acres of that land up there is subdividable. I would assume that they could agree not to subdivide it, which means that they have to sell it as an un-subdivided piece. Tom Sanders said he agreed that we probably shouldn't sell it unless we make money. "We spent so much time developing that and getting it set up to last for 50 years. The only problem we could have with the property up there is if there is development and people start complaining about our operation there. This way we can control that," he stressed. Mr. Lauer suggested that the Board consider entertaining the idea of not selling the property at all, especially if there is a fairly large wetlands. "I could see selling it if we needed the money, but apparently we don't," Mr. Brown remarked. Mr. Lauer wanted to know if there was a grazing restriction on the wetland. It has been determined that cattle help the wetlands, Mr. Smith responded. "There needs to be a certain amount of pressure to thrive," Ms. McGaha Miller added. "As long as it's not overgrazed," Mr. Lauer asserted. "Our lease has certain restrictions on that and they are fairly strict," Mr. Smith assured the Board. Tom Sanders moved that the Board recommend to the Council that we consider withdrawing selling the land at this time. Dave Lauer seconded the motion. The motion passed unanimously. 1995 Water Board Annual Report The Board accepted the 1995 Water Board Annual Report as presented. "It's a good report," one of the members stated. Molly Nortier noted that the report will be included in the Utility Annual Report. Forest Service Land Trade John Bartholow wondered what has happened with the Forest Service Land Trade item since the Board voted on it in November. Mike Smith reported that, after the Water Board reviewed this item, F Water Board Minutes February 16, 1996 Page 13 he went to the Natural Resources Board in December with it. They had the same concerns that the Water Board had about some of the language in the proposed legislation. Overall they were comfortable with the land exchange. At their January meeting Mr. Smith pointed out that Greeley and WSSC had deleted the deadline date for the Endangered Species Act Recovery Program (ESA), an item that was unacceptable to the NR Board at the last meeting. After consulting with Greeley again, Mr. Smith took the revised legislation back to the NR Board for the third time. "They still didn't like it," he said. He continued by saying that it's going to the Council on February 20th. The Council has already passed a resolution in their legislative agenda saying they support a legislative land trade. They didn't support the bill, but they supported the process for doing it. Now that the NR Board has said a number of times that they do not support some of the language in the legislation, staff will go back to Council asking them if they want to rescind their previous decision of supporting a legislative solution or an administrative approach. He suspects that they will want to do it administratively. He knows for certain that there are philosophical differences between Fort Collins, Greeley and Water Supply & Storage Co., and that what currently is on the table is probably the closest the three entities can get to an agreement. The City Manager's and staffs position is to inform the Council that if they really want to use a legislative solution, staff will support them in doing that, but there are some language issues to work out, but if they want to do it administratively, "that's okay too." Mr. Smith emphasized that the major thing the NR Board objected to was what was not in the document. They are willing to do a land exchange but they aren't willing to say that there aren't environmental concerns below Chambers and those other reservoirs on which we need to have some mitigation before we do the trade. "I expect the Council will not want to go ahead with the legislation," he concluded. COMMITTEE REPORTS Water Supply No report Legislative and Finance Howard Goldman said everything the Committee discussed has already been covered. The Committee set their next meeting for 1:00 on March 22nd. Conservation and Public Education No report Engineering No report Water Board Minutes February 16, 1996 Page 14 REGIONAL ISSUES Topics for Joint Meeting with Greeley and Loveland Water Boards Tom Sanders suggested limitations of ownership for CBT water as a possible topic. Mike Smith pointed out that it may be resolved by then. "It depends on when we schedule the joint meeting," he said. There is some indication that the NCWCD will be discussing that in March, and there is a pretty good chance that it will be resolved at that time," Dennis Bode related. Tom Brown recalled that the District's current proposed guidelines were initiated after close consultation with Greeley; "Greeley was going to the meetings, Fort Collins wasn't," he said. "I don't think we have common requirements on it anyway," he added. New member Alison Adams asked what the group usually talks about at these meetings. Several members gave examples. Mike Smith suggested that a good topic might be the Platte River Recovery Program as a regional issue. "Everyone has concerns about it," he said. There was agreement that it would be a worthwhile topic. "Is there any point of contention among the Cities that would provide some good discussion?" Mr. Sanders wondered. There really isn't much that would produce benefits if there was discussion, Mr. Smith replied. Mr. Smith brought up the proposed raw water pipeline as another topic that has regional significance. Another issue is the Thornton project, Dr. Sanders suggested. "That's in the supreme court right now," Mr. Smith responded. David Lauer thinks there will be differences in philosophies about Instream flows. "If you want contention, you can bring that up," he joked. Ray Herrmann stated that we ought to be leaning towards someone who would make a presentation that would last for a specific time period, and he thinks the recovery program fits that criterion. "What about communication among the different water boards?" Mr. Ward asked. "It bothers me that the Northern District could develop this cap plan and Greeley was there and we weren't. Are there other issues that we're involved in and Greeley's not? Is there a way that we could get summaries of minutes or annual reports of other boards?" Molly Nortier said she would look into that. He also asked about Windsor and was told that they don't have a water board. Tom Sanders asked why Greeley was involved in the interim guidelines of the District and Fort Collins wasn't. Mr. Bode said the reason Greeley became involved was that they were interested in buying some water at the time. In order to do that, they needed to meet the old District guidelines, so they sat in as an individual party trying to work out something that was acceptable to Northern. Once they became involved in the discussion, some of the guidelines that were discussed became a part of the interim guidelines. "What was a surprise to us, was that it tended to be a District -wide policy rather than just working out the specific problems with Greeley," he said. "I'm not sure the rules changed as much as they became better defined," he added. For Greeley the Interim Guidelines work out okay partly because their firm yield is probably not as good as our firm yield, for example. Actually, the guidelines they had before were essentially what they arrived at with the Greeley Water Board Minutes February 16, 1996 Page 15 discussions. "We're hopeful that the District will be receptive to some other ideas that will come up as they finalize the rules and regulations," Mr. Bode concluded. Mr. Lauer asked if there is going to be any impact with what the Northern District wants to do with the new dam and reservoir site near Carter Lake, which would certainly be of interest to the Loveland people. "I think it is an item of interest," Mr. Bode agreed, "because that's intended to be a storage place for Windy Gap water. We are deeply involved with Platte River Power Authority in the way we get water to them through our reuse plan. The lack of storage for Windy Gap water in the system does have some kind of an effect on us in terms of coordinating with PRPA, and their being able to pay us their WG water after we deliver reusable effluent to them." He added that it is a subject that has been discussed frequently at Windy Gap meetings. In terms of managing the Windy Gap water the new dam and reservoir site at Meadow Hollow is seen as a plus. Mr. Ward thinks it would be interesting to get an update from Dave DuBois on the activities of the North Front Range Water Quality Planning Association at the joint meeting. He added, "at least some summary of the regional status of water quality that we all must deal with. I know that group has been doing some ground water sampling." "They have been doing quite a lot in Weld County," Ms. McGaha Miller said. "Does anybody summarize the surface water quality of the region?" Mr. Ward asked. "It's actually a project that we have thought about having them do, but it's so large," Ms. McGaha Miller responded. Mr. Bartholow pointed out that the USGS has the NAQUA program, and the South Platte is one of the ongoing basins for evaluation. It should be completed in about 4 years. Mr. Ward related that they have done an intensive study on Little Tree Creek which could be very interesting regionally for agriculture water quality impacts. "There don't appear to be any strong feelings about the subjects, so perhaps we will rely on staff to select whatever falls into place," Mr. Bartholow concluded. Mr. Smith said that staff can probably find someone to give a presentation, particularly on the South Platte Recovery Program. "We could also plan on having an update from the Northern District on some of their projects," he proposed. Bay -Delta Agreement, A California Model for Cooperation Howard Goldman reviewed for the Board that he has proposed forming a Water Board committee that would concentrate on liaison and regional cooperation issues. John Bartholow recently found an article summarizing a case that could serve as a model for the kinds of regional cooperation that he advocates. Board members had received, in their packets, a review of the legal developments of the Bay -Delta Agreement in California. Mr. Goldman thought it would be worthwhile for Board members and staff to read the article which demonstrates the cooperative process that he has been trying to define for the Board. Mr. Goldman said that it is hard to define what that process might be. We are all accustomed to the political process, the rule -making process, contracts, and ultimately the water court for resolving disputes, he said. The article is a good description of what happened with an actual case, and is a Water Board Minutes February 16, 1996 Page 16 good example of creative problem solving by various over -lapping governmental agencies, and many other stake -holders. Although it doesn't have any binding legal affect and it isn't even a Memorandum of Understanding, it's an interesting and informative document, he concluded. Tom Sanders said that the article was excellent. He pointed out that the regulators know they have the authority but are also a part of the group and they are willing to try to work out a reasonable solution. He referred to a particular segment of the document on page 50: "If listings are necessary, and additional water is required to meet biological needs, the government has indicated that it will not seek further regulatory reallocations of water from Delta diverters but will purchase any water required from willing sellers." Dr. Sanders thinks this is a key item. "If it applies nationally, it would solve many of our current problems," he believes. The two sentences following the quote he cited, are also noted: "However, the government cannot bargain away its legal obligations. To the extent that sufficient funding is not available to purchase requisite water supplies for future endangered species requirements, the Agreement will not operate to extinguish the government's ESA obligations." Other board members agreed that this was an interesting and relevant example of what can happen when various groups, who are often in adversarial roles, can work together to arrive at solutions for difficult problems. The conclusion of the document follows: "Although the Bay -Delta Agreement is not a complete solution, it is an important first step toward resolving the most intractable water dispute in California. The success of the Agreement in the short term will depend on the signatories' commitment to the package as a whole. The question is whether the parties that have worked so diligently throughout the process will be able to maintain their considerable momentum in an altered political climate that appears to be inexorably hostile to environmental protection and to endangered species, in particular." OTHER BUSINESS Change Date of Next Board Meeting Because the regular Board meeting date occurs in the week of spring break for both CSU and the PSD, the Board agreed unanimously to change the day of the meeting to the following Friday which is March 22nd. The meeting will be at the same time and in the same place. ADJOURNMENT Since there was no further business, the meeting was adjourned at 4:48 p.m. Y Water Board ecretaryry