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HomeMy WebLinkAboutWater Board - Minutes - 03/15/1991WATER BOARD NUNUTES March 15, 1991 3:00 - 5:15 p.m. Light and Power Conference Room 700 Wood Street Members Present Henry Caulfield, President, Neil Grigg, Vice President, Tom Sanders, Terry Podmore, Tom Brown, Ray Herrmann, Mark Casey, Marylou Smith, Paul Clopper, (alt.) Staff Mike Smith, Dennis Bode, Linda Burger, Ben Alexander, Webb Jones, Andy Pineda, Molly Nortier Guests Loren Maxey, City Council Liaison Karl Dreher, Head of Engineering Services Branch, NCWCD Gene Schleiger, Agency Coordinator, Northern Colorado Water Conservancy District Dorothy Huff, Observer, League of Women Voters of Larimer County Members Absent Tim Dow, Tom Moore, Dave Stewart President Henry Caulfield opened the meeting. The following items were discussed: Minutes The minutes of February 15, 1991 were approved as distributed. Remarks from Council Liaison, Loren Maxey Loren Maxey, City Council/Water Board liaison, reviewed water related items that the Council had discussed recently. Procedures for renting the City's surplus water was one of those items. At the last Council meeting there were questions about how the customer list and priorities are established for the City's surplus water. Mr. Maxey said that Dennis Bode did a fine job of explaining the procedures to the Council. However, there continue to be areas of concern, and one of them pertains to the relationship with other water treatment entities, and whether there might be an arrangement whereby their requests could be entered into the process; should there be any. The other aspects of renting water are the return on it and the time at which the priority list is established. The Council would like to have the process re-examined, recognizing that Fort Collins has recently acquired additional shares of irrigation water. Water Board Minutes March 15, 1991 Page 2 The next item he commented on was Cache La Poudre National Heritage Corridor designation. He and Council member Azari recently attended the national League of Cities meeting in Washington D.C. During that time he and Ms. Azari, along with City Manager Steve Burkett and Kari VanMeter with Planning, visited with Sen. Hank Brown's staff. In the course of the discussion it was observed that a small portion of the drainage basin extends into Wyoming. They anticipated that it could raise some concerns from the Wyoming delegation, so they met with staff from the offices of their two senators. The senators from Wyoming obviously have a concern if it affects their water supply. However, the Colorado group received a good response from the Wyoming delegation. They actually saw some future benefit for themselves. Wyoming has recently attained a Wild & Scenic designation for one of their rivers. Colorado's Sen. Brown hopes to introduce the National Heritage Corridor bill before the end of March. Along with the NHC designation, there will be a committee, referred to as trustees, that will be created with representatives from municipalities, from county government, and from citizens. Mr. Maxey said that names for the committee don't come readily to mind. The generation of water experts (e.g Harvey Johnson) is turning over, and there don't appear to be many identifiable leaders. In order to be prepared to suggest names for that committee, which could be soon if the bill moves quickly, Mr. Maxey hopes to have input from the Water Board. Mr. Caulfield assured Mr. Maxey that the Water Board will consider seriously his suggestion for input to the NHC committee. Northern Colorado Water Conservancy District Update Gene Schleiger, Agency Coordinator from the NCWCD, distributed CBT Project precipitation charts and the latest precipitation update from Snotel. He pointed out that the precipitation graph is the 34 year average and includes the 1990-91 water year. The .03 inches for February is the lowest precipitation amount that has ever been recorded in the 34 years that the District has been keeping records. According to the SCS weather station data, the Platte is about 80% of normal as of March 13th. The District views this figure with some skepticism because it is probably 5-7% higher than what is actually out there. "Primarily what we've seen since the first of February is about an 8-10% increase in the snow pack in the northern part of the state," he said. In the southern part of state there has been about a 20-22 % increase. He explained that March and April are our two largest snow months. By this time of the year probably 75-80% of our snow season is behind us. Generally the snow that falls in December, January and February doesn't have a large water content, so it will take significant spring snow to get us near to where we should be, he stressed. Water Board Minutes March 15, 1991 Page 3 Mr.Schleiger included in his handouts, air temperature and precip. data in the Fort Collins area from the District weather station. What is significant with this data is that in both months the temperatures were slightly above normal. We appear to be seeing a trend of warmer temperatures with less precipitation, he said. He also distributed sheets that listed current reservoir storage numbers for Granby, Horsetooth and Carter. Granby, as of that morning, was down to about 25 1/2% of capacity. On April 1st they anticipate that it will be at about 34%, but that would be 62 ft. below its capacity. "We expect that it will be 8 ft. higher this year than it was last year on April 1st," he said. Horsetooth is currently at a little over 81 % of capacity. It will probably be brought up to about 90%. Under the current operating plan, the District will not fill it to capacity this year. The 90% capacity is expected to be reached about the first of June. Carter is at 95 % of capacity and the District anticipates that it will be brought up to about 98 % by the end of March, and they will stop putting water into Carter at that point. The rest will be brought north into Horsetooth. When the percentages for Horsetooth (81 %) and Carter (95 %) are compared with last year, both are higher. Last year Horsetooth was 75% and Carter was 86%. Mr. Caulfield asked about the first precipitation graph. "Is that some kind of an average for the plains area as well as the mountains?" "Yes it is," Mr. Schleiger responded. Basically what is recorded there is the total within the District boundaries. It doesn't include the western slope, nor does it include the snow pack on the Poudre River. It's strictly precipitation on the east side. He explained that when the District gets ready to set the quota, both records become a part of the process. Discussion of Cache La Poudre Basin Study Karl Dreher, the Head of the Engineering Services Branch of the NCWCD began his presentation by explaining why the District asked the Colorado Water Resources and Power Development Authority to sponsor the latest study that he referred to as "the Basin Study Extension." He presumed that most of the staff and Board members were probably familiar with the earlier study performed by the Authority. That study was completed in 1987 and by June of that year work was begun on the basin study extension. Some people might ask, "Isn't one study enough?" Given the climate of environmental concerns and public consensus, he believes even this level of study probably isn't enough. There will probably be many more detailed studies conducted before a decision is rendered, he concluded. Water Board Minutes March 15, 1991 Page 4 In terms of the first basin study, the focus was on screening alternatives for water development in the basin. At the time it was begun, a number of alternatives were examined, both upstream of what now has been designated as the lower boundary of the Wild & Scenic River as well as downstream of that segment. At about midway through the study, the Wild & Scenic negotiations were completed, and legislation was passed, which eliminated many of the upstream alternatives. The first study deals mainly with characterizing the existing Poudre Basin, the water supplies in the basin, the population that derives its livelihood from the basin, and how that population gets its water. The second volume deals with how to meet future water supply demands. More effort was spent in looking at the effects of non-structural conservation measures than was spent in looking at structural measures. There were 32 non-structural measures that were identified as being potentially useful in the Poudre Basin; eventually that number was reduced to 12 potentially viable options. The 12 measures are: 1) Ditch lining 2) Conjunctive use of ground water with surface water supplies (In essence using ground water as a storage reservoir as opposed to building a new surface reservoir) 3) Better hydrologic instrumentation that would allow water users in the basin to more accurately predict the run-off in advance so through management, they could make better use of the water. 4) Transfer of storage decrees 5) Transfer of points of diversion 6) Deficit irrigation practices 7) Public information programs 8) Universal metering 9) Outdoor watering restrictions 10) Landscaping restrictions 11) Drought insurance 12) Some sort of basin -wide organization to manage the supplies, as opposed to individual owners managing the supplies He acknowledged, however, that of that list, even though these were identified as being potentially effective, the NCWCD has little to say about whether any of those are ever implemented. Nevertheless, for the purpose of the study, an assumption was made that all of those measures would be adopted and would be effective. Water Board Minutes March 15, 1991 Page 5 The consultants then went on to look at structural measures that might meet the remaining needs. The conclusion of that study was the recommendation of a preferred plan for structural elements consisting of three reservoirs and a pump storage project. In total, it included a main stem reservoir, the major storage off channel at Glade, and then a pump storage project to help pay for the costs. Mr. Dreher said that for the most part, this was a well-done study but he admitted it does have perhaps two major weaknesses. After all the attention was paid to conservation and non- structural measures, not very much effort was devoted to environmental concerns. The alternative structural plans were proposed and evaluated with only a minimal amount of effort in screening what the environmental effects of something like that might be. The other shortcoming of the study was the fact that this large scale project was proposed without any meaningful plan for implementing it. When you think about a 200,000 ac-ft reservoir on the main stem of the Poudre, a 250,000 ac-ft off channel storage in Glade, and an 1800 megawatt pump storage project, doing all of that in one piece would be very difficult, and probably impossible in today's climate. Because of that shortcoming, the basin study extension was proposed and eventually authorized by the CWR&PD Authority. The main emphasis of that study, unlike the previous study, was environmental effects. There were again two volumes; of the two, the main volume deals with the environmental studies, while the smaller volume deals with hydrology, engineering analyses, highway relocations and economic feasibility. The focus of the study was by plan environmental in nature. The reason for that was to be able to intelligently discuss issues relating to development on the Poudre River as to how it might affect critical environmental resources that most people want to see preserved and protected to some level. The other aspect of the report is that it looked at staging the development that had been identified previously in such a way that the project stood some potential of eventually becoming a reality. In the basin study extension, the three components of the preferred plan that were identified in the original study, were broken up into 3 stages: (1) A main stem reservoir that, for the purposes of this study, was assumed to be primarily for municipal and industrial water supplies; (2) An off -channel reservoir, still at the Glade site, that was presumably to be used one day for irrigated agriculture; and (3) The pump storage project that may one day provide revenues to offset the development of these water supplies. The main focus of the basin study extension was not those latter two parts; it was the main stem reservoir, and again that was by design in order to concentrate on those aspects that would have the highest level of environmental sensitivity. Water Board Minutes March 15, 1991 Page 6 The other two components were set aside for the time being for a number of valid reasons; for one, water storage at Glade is at least twice the unit cost as water storage on the main stem, and it isn't clear who is going to pay double the cost. Thus, the future of Glade remains long term. The pump storage aspects study was done by the NCWCD with direction and funding by the Authority. At that time the PRPA and others were saying that there was no need for that kind of pump storage in the Rocky Mountain area, and they were right because there was no need for it in Colorado at that time. The intent of including it in this level was a long term one. Mr. Dreher emphasized that pump storage at this time is one of the cleanest, least environmentally damaging ways of meeting peaking power needs that we know of. He acknowledged that it is very expensive to develop up front, but in terms of the overall environmental impacts, it is probably the least damaging, he reiterated. He explained that the District felt it was their obligation to the public to at least attempt to preserve that option for this region until such time as it may become viable. In preparation for the court proceedings in Greeley where Thornton is contesting the District's rights to the water for these projects, the District has updated the projections for power demands in the future. Mr. Dreher stated that the utilities in the Rocky Mountain region are doing almost nothing in terms of adding to their capacity to meet future power needs. The result of that, if it continues, will be that by the year 2000-2010, the Poudre project won't even be able to meet the demand for peaking power. One of the reasons utilities are not preparing for future power needs is that Public Service Co. of Colorado can buy power cheaper than they can generate it themselves. The other reason is the environmental factor. It is very difficult to get coal-fired power plants licensed, so a number of utilities are constructing gas - fired turbines. Burning natural gas to meet peak demands works as long as natural gas prices remain relatively low. There are projections that natural gas will take a jump in the future, he concluded. Mr. Dreher returned to the discussion of the main stem reservoir. Before focusing the last study on the main stem, a re -screening of all the structural elements identified earlier, was conducted. As a result of the Wild & Scenic legislation, there were basically 7 elements that could be considered: 1) A dam and reservoir so called portal which consists of a dam constructed at the mouth of the Poudre Canyon inundating the entire canyon back to Poudre Park, the limit of basically the W&S area; 2) The Grey Mountain dam and reservoir; 3) The Poudre dam and reservoir; 4) Rockwell, the site that Fort Collins and Greeley share; Water Board Minutes March 15, 1991 Page 7 5) A new Halligan 6) A new Seaman 7) Glade Reservoir The consultants evaluated and re -ranked each one of those seven elements in terms of their cost effectiveness in providing a new annual supply of water, and that ranking is contained in the small summary volume that was distributed to the Board. The ranking was produced using the data that had been developed earlier during the basin study. The ranking showed that the most cost effective location for at least a large increment of storage, continued to be the Grey Mountain Reservoir site by a significant margin. The next closest option was the Poudre alternative. It would inundate about 2 miles less of the Canyon. He said it is important to remember that the study recommended the Poudre site as the preferred alternative, and the sole reason was that it inundated about 2 miles less of the Canyon, but no work was done during the study to evaluate the technical feasibility of constructing a dam at that location. New Halligan appears to be a very cost effective way of providing some additional storage in the Poudre Basin. The only thing that doesn't fit with the criteria the District was using, is the fact that it is so small and it only controls the North Fork. From a regional water supply standpoint, it doesn't offer the advantages that a reservoir on the main stem formed by a dam below the confluence would provide. With the cost ranking in place, they focused the rest of the engineering work on Grey Mountain Reservoir. In terms of the environmental studies, they looked at both Grey Mountain as well as the Poudre alternative. Then they began to perform a series of environmental studies. Those they Performed were not the total number that need to be conducted, he related. Funds were not available and it wouldn't have been appropriate at the lower level of study to necessarily look at everything right now; at least not until it is clear that it is feasible and needs to be considered in the future. In consultation with the federal and state resource agencies, the District selected those areas that have the highest potential to result in a fatal flaw for project development; those areas were aesthetics, aquatic resources, botanical resources, cultural resources, land use, recreation and wild life. There are approximately 1000 pages of the report that document those studies, plus in volume 2 there are another 1800 pages of appendices on microfilm that relate to those environmental studies. In summary, the most important conclusion from their prospective, was that they did not find any fatal flaws in the environmental resources which, in and of themselves, would stop project Water Board Minutes March 15, 1991 Page 8 development. Mr. Dreher hastened to add that that doesn't mean that a project like this is mature and ready to move ahead. If you look closely at the actions that have surrounded the Two Forks debate, you see that the federal agencies which have responsibility for permitting these projects, retain a fair amount of latitude and arbitrariness in terms of making their decisions, he stressed. He went on to say that of the environmental resources considered, there were none for which an adequate mitigation plan could not be developed. For example, a main stem reservoir would allow winter flows in the river where they had been insignificant before, and as a result the aquatic habitat would exceed that which existed before. Another controversial subject related to constructing a dam, is recreational use of the area. They conducted surveys and found, surprisingly, that the highest recreational use of the area was sightseeing. They also found again that with flow regulation, the net recreation opportunity after the project would greatly exceed the recreation opportunities before the project. For example, they would have to replace the rafting opportunities in kind and what they propose to do is construct boat chutes on the diversion structures located below the main stem reservoir, below the mouth of the Canyon, and actually create a new rafting run. There are threatened and endangered plant species in the area; there are none in the project area. There were no threatened and endangered wildlife species in the area with the exception of bald eagles. They found, however, there were no nesting sites nor habitat in the area, even though eagles do feed there. The proposed mitigation being considered where there is dislocation and inundation of wildlife, is to acquire lands that have been heavily disturbed by human activity and restore and preserve those lands for wildlife use. In terms of the reservoir itself, consultants looked at a reservoir on the main stem that has a total volume of about 200,000 ac-ft. That 200,000 ac-ft would result in a new safe supply of about 41,000 ac-ft--31,000 coming from the Poudre River itself; 10,000 ac-ft coming from additional diversions from CBT/Windy Gap which, by law, we are entitled to make. Since the study was completed in December of 1990, they have continued to look at the hydrology because of the involvement of Thornton in the Northern project, objecting to their change of use and their conditional water rights. Thornton it turns out was able to get better data than the District did. There were some errors in the data base the District used, while Thornton went back to the original state engineer records, and re-evaluated the data. Water Board Minutes March 15, 1991 Page 9 The District has re -calculated the historical flows based upon that analysis, and the resulting yield now has dropped from 41,000 ac-ft to 36,000 ac-ft. It made a difference, but not a significant enough difference to render this infeasible, Mr. Dreher stressed. The cost of a main stem reservoir has been updated and is currently estimated to be about $170 million. If highway relocation, a small conventional hydroelectric power plant, and a pipeline pump station between Horsetooth Reservoir and the main stem reservoir, so you could be assured of getting CBT/Windy Gap water up into storage, are added, the total cost is estimated to be $230 million. "It's an assumption, I suppose," he said, but we did look at the reasonableness of it in comparison to other alternatives. If the new yield is valued under the assumption of 41,000 ac- ft, and the water is valued at $3500 per ac-ft, the project is economically feasible. The effect of reducing from 41 to 36,000 means that the economic value of the water has to increase from $3500 to a value equal to $3500 times the ratio of 41 to 36. That sounds very expensive, he admitted, compared to what you can buy CBT water for, but if you look at the cost of what it is going to take to add the increment of water supply for this region, at some point in the future, "that's pretty reasonable," he contends. In contrast, just to acquire the farms Thornton purchased, they received rights through Water Supply & Storage for consumptive use valued at approximately $6500 per ac-ft. Of course, it will cost them far more than that to actually move the water to Thornton. In the end it may cost them $12-14,000 per ac-ft delivered. Mr. Dreher is convinced that all the needs can't be met through conservation, although a significant amount can be. "The reason we keep looking at this project is because of the concern for the future," he insisted. Tom Brown asked who they envision will be using this water consumptively, on the assumption that the project is finished in 10 years. - "We have not gone to any sort of user and asked them if they are interested at this point, because we haven't felt that we had enough information to answer basic questions," Mr. Dreher responded. However, under the Conservancy District's statutory authority, they could potentially involve any of the entities within the existing boundaries of the NCWCD, and there are some 40 different entities involved in retailing municipal and industrial water supplies in that area. Presumably any one of those could be involved in participating in this project. There are two aspects of this project that could interest a municipal water provider: 1) The new water supply (obviously) and, 2) There is a potential that a municipal entity could simply purchase storage to store their ag. water rights which they have purchased for municipal use. He acknowledged, however that implementation of the project 10 years from now is probably too soon. Water Board Minutes March 15, 1991 Page 10 Henry Caulfield pointed out that the District is sponsoring a study estimating the demand, not just within the Northern District, but in the entire region. "When are we going to have a presentation on the regional study?" he asked. Neil Grigg, through the Chamber of Commerce Water Resources Committee, plans to have Mr. Dreher give a presentation as soon as his legal obligations are completed on the Thornton case in Greeley. The Water Board will be invited. Mr. Caulfield asserted that he doesn't see anyone paying for this project and he doesn't see hydro -electric power paying for it in the foreseeable future. The people who have the money and the interest are those in the metro -Denver area, he insisted. He went on to say that financially, Fort Collins has no interest in the project for a long, long time. The same is true for Greeley and Loveland, he added. If you look at the cost of this in comparison to what we can buy CBT water, it just doesn't make any sense in any near term scenario, he concluded. Neil Grigg related that the question before the Chamber of Commerce committee is "What's the relationship between the water supplies in this region and the future economic development of the region?" One of the big question marks is, to what extent is our economic future connected to the economic future of the Denver area, particularly the northern tier of the area, with a new airport being constructed? "If we continue to lose water as in the case of Thornton, to the Denver area, then this project can be looked at as replacement water we are losing to the metro area. Even though this project doesn't look attractive to us at $3500 ac-ft if we are buying CBT water, compared to what Thornton is paying, this would look very attractive to some other entity in the Denver area. Mr. Dreher responded that in spite of the fact that Fort Collins feels it has the basic water to meet its future demands, the City has plans to build a new Halligan to store some of that water so the City can make full use of it. Participation in the project at some level could be an alternative to that, he suggested. The other thing that shouldn't be forgotten, he continued, is that there are some flood protection benefits that are a part of this project that will not come from Halligan. Mr. Caulfield asked if the District has seen any problems with Halligan in the process of the studies of different alternatives. Do you see any conflict with what the District has in mind and the City constructing a new Halligan? "No, and if you look in the summary volume, you will see some plans identified that involve a combination of New Halligan with the main stem reservoir," Mr. Dreher replied. Mark Casey recalled that the last time the Fort Collins Water Board met with the Loveland and Greeley Boards, Mr. Farr related his vision where Northern Colorado would control its water destiny through not looking to restrict the flow to Denver, but "more or less being the gate- keeper or controller of the water." Do you see this as one way of doing that, and if so , could this supplant the Thornton project?" "It wouldn't supplant it," Mr. Dreher answered. The Water Board Minutes March 15, 1991 Page 11 reason Thornton is involved in this is that part of their plan involves diverting presently unappropriated water out of the Poudre through the WS&S Company facilities to Denver. They have estimated that in an average year that would be about 17,000 ac-ft. By exchange they would get another several thousand ac-ft, so they would get about 20,000 ac-ft total. If the main stem reservoir were to be constructed, there is no way they would get that water: (1) It's senior to their conditional rights, and (2) It would block the exchange. It would harm the yield of their project. "If, by some remote chance, we were to lose our diligence case to Thornton, and the court were to set these conditional rights aside, conceivably Thornton could change their conditional rights to storage rights on the main stem," Mr. Dreher explained, "and they could build a small main stem reservoir." Regarding the regional study, one of the things the District looked at were the 1988 safe supplies available to all of the cities. They didn't go beyond 1988 because they didn't have any data concerning what rights had been added and had actually been taken through water court. They chose in the regional study not to try to speculate or project how individual cities might add to their own water supplies, he said. They conservatively projected population growth and water demands. There were some entities and service areas that were going to grow faster than others because of where they were located in relation to transportation facilities and other concerns. The overall average annual growth rate that they ended up using was about 1.7%; Thornton's projecting a 2.5 % growth rate. Using the growth projections that were made and turning those into water demands, and in most cases actually reducing future demands through conservation, we end up with a total deficit among all of the entities in the conservancy district area of about 51,000 ac-ft annually. Does that mean that's a real shortage? No, not necessarily; that's the sum of the deficits if nobody adds to their water supply. Obviously some are going to augment their supply. Incidentally, that total does not include ag. water. He mentioned that both Loveland and Longmont are interested in additional storage, particularly for ag. rights. If additional storage isn't accessible, the ag. rights are only available in the spring and summer months. Fort Collins of course has CBT water to offset that. However, the District Board has policies about the limits of CBT that entities can own, and looking 20 years down the road, it may not be possible for municipalities to rely on new acquisitions of CBT in that manner either because the Board wouldn't authorize the transfer, or the price goes up to the point where it is not necessarily the lowest cost option. He believes there is a demand in our area for new water, and in some cases just a need for storage. The potential is there for the longer term, he stressed. Water Board Minutes March 15, 1991 Page 12 "You put a per ac-ft value of $3500 for Grey Mountain water or lower Poudre water," Ray Herrmann began, "what happens if you go to Glade?" "Currently what we are proposing with Glade, is that the need to build it is probably far enough out, that pump storage remains a viable way to pay for it," he replied. Let's assume we have a main stem reservoir, Mr. Herrmann added. One of the things mentioned was an off stem reservoir in lieu of the main stem. "Not possible," Mr. Dreher contends, "unless you are going to pump the water into Glade. If you're going to deliver water by gravity, without pumping into Glade, you must have a main stem reservoir. About the smallest size that would work is about 50,000 ac-ft on the main stem, he explained. Then the question becomes, if you have to build a 50,000 ac-ft reservoir to avoid pumping, what are the incremental effects of going ahead and building a 200,000 ac-ft. reservoir?" "When you first mentioned Glade in your earlier discussion," Henry Caulfield began, you talked about that being for agriculture, and that peaking storage could pay for that, are you seriously thinking of making that water available free for farmers?" Not entirely, Mr. Dreher replied. Preserving water for agriculture is changing, even among the farmers, Mr. Caulfield asserted. Recent data suggest that there has been a net increase in irrigated lands as opposed to a net decrease, Mr. Dreher related. "Apparently there have been lands going out of production and somewhere new lands are coming in," he added. He admitted that he hasn't had a chance to verify that data. MaryLou Smith asked for a comparison of this project with the CBT system and the Windy Gap project. The safe yield for this project has now been revised to 36,000 ac-ft per year, so this is somewhat less than Windy Gap, he replied. CBT has the potential to deliver 310,000 ac-ft but, in fact doesn't do that very often, he added. That only happens when there is a 100 % quota and average deliveries are approximately 70% of that. He also pointed out that it compares in size to the Windy Gap Project and Windy Gap water is now selling for $5,000 ac-ft; that's what Broomfield recently paid Boulder for it. Tom Sanders asked about one of the issues raised that says "we need to build it to protect from Nebraska establishing rights down stream in the future." Mr. Dreher believes that statements like that are meant to be more scare tactics than reality. It's an extremely remote possibility, he added. Dr. Sanders insisted that with the current economic climate and opening of the compacts, it is coming. It isn't going to be the compacts that are opened, Neil Grigg stated, it's going to be the Whooping Crane people reaching across the state line and objecting to anything that would reduce the flow, whether or not it violates the compact. The last 10 years Nebraska has objected to everything in the way of storage in Wyoming and Colorado, Mr. Caulfield pointed out. Water Board Minutes March 15, 1991 Page 13 Mr. Dreher brought up another point in connection with the regional study concerning projected deficits. Area 2, south of the existing District boundaries down at the Boulder/Weld County line, projected deficits through the year 2020 of about 15,000 ac-ft per year, using the same basis of 1988 safe supply versus future demand. In area 3, the north tier of the Denver area, deficits are projected to be about 200,000 ac-ft per year by 2020. Mr. Dreher recalled that when the District began the regional study, people opposed to the project accused them of doing the study to create a demand for the project. In the District's defense, he stated that the reason they included area 3 was because of what Thornton had done. Moreover, if you look at what has occurred with Two Forks, where does an Aurora, which accounts for about 130,000 ac-ft of that deficit, turn next? The concern is, that they, like Thornton, may look north. Contrast that with municipal policies of developers bringing ag. water or cash. Thornton obviously chose an irrigation company with storage; Those kinds of companies are limited in number. Mr. Dreher continued by saying that he still has a philosophical question that he hasn't answered. When you look at the overall needs along the front range, setting aside parochial boundaries for a moment, "are we shooting ourselves in the foot by trying to protect our ability to develop a more expensive water supply while they are buying the least expensive water supply out from under us?" Is that really the right approach? In his opinion, the Poudre project, if it is ever built, should be built for the benefit of northern Colorado and held in reserve for its future. Maybe Northern Colorado ought to be hanging on to water supplies it has already developed, he asserted. "That's our water bank concept," Dr. Grigg pointed out. Mr. Dreher went on to say that maybe we ought to let the Thorntons develop a more expensive water supply, but he admitted he doesn't have the answer. Mr. Caulfield acknowledged that there is a philosophical difference in the region. He said that the District study, in many respects was supposed to answer that question, plus the South Platte Basin study or the Samson model study. There is a lot of underground water in storage in the South Platte, he related. Ray Herrmann remarked that the ultimate absurdity is that all of the existing Poudre rights could be sold off, and a dam could be built to replace those rights for use on the same acreage. "That's the other side of it" Mr. Dreher replied. Mr. Caulfield stated that if there were more Water Supply and Storage companies around for the Denver metro interests to buy, that would be something different, but he doesn't see similar companies. Dr. Grigg pointed out another absurdity. If you look at all the effort that Northern Colorado put into getting the CBT project, and you think that this water could be diverted to Denver piece by piece, what we are really losing is the CBT project. Water Board Minutes March 15, 1991 Page 14 Mr. Dreher said that there is an answer at least conceptually, that Larry Simpson has talked about for years, but he has never identified the mechanism to do it. If there were a way to institutionally allow the Denver area to go ahead and use the ag. water first and then bring the return flows north, similar to Thornton, but on a much larger scale, that could be an answer. Mr. Caulfield pointed out that that's also Mr. Farr's idea. He also stated that it's a concept that currently would be politically unacceptable. Mr. Caulfield indicated that an idea referred to in the executive summary to build a bypass through Rist Canyon would be entirely unacceptable with the citizens in this area, and probably one of the most unpopular ideas to be considered. Mr. Dreher acknowledged that it would certainly be unpopular. President Caulfield thanked Karl Dreher for his fine presentation. Demand Management Committee Report MaryLou Smith reported that the Demand Management Committee met on March 5th and heard a report from Water Conservation Specialist Jim Clark on demand management options beyond metering. The Water Board will receive minutes from the meeting which outline some of those options. The Committee suggested that their focus be on program development, answering the questions: 1) What are our goals? 2) How much do we want to control or manage our demand? 3) Beyond the impact on demand from metering, how much more do we want to save? They also agreed that the focus should be on structural changes that are fairly transparent and don't require major life style changes. Their overall goal is to seek to be more efficient with water use by developing programs that reduce peak day demand and overall consumption. For the next meeting, the committee asked staff to prepare a proposal using ideas and suggestions from the meeting that day, while incorporating what staff believes is feasible and acceptable into the proposal. In addition, they asked staff to prepare a framework of goals, objectives and strategies that the Committee can work with. Update on Wastewater Committee Meeting Mark Casey reported that the Wastewater Committee had met the previous day (March 14th). He said the Committee was in agreement to provide financing on wastewater PIFs with the following stipulations: 1) That it apply to only tap sizes larger than 1 inch; 2) That there be a 25 % minimum down payment (finance 75 % of the PIF); Water Board Minutes March 15, 1991 Page 15 3) That payment be allowed over a 5-year pay off time; 4) That the loan rate be tied to the private market. (The Committee would be comfortable with a U.S. average prime lending rate.) Mr. Casey assured the Board that this would be the same rate the company would incur if they went out on the open market and borrowed money. 5) That staff calculate a loan fee to be added as a percentage above the prime lending rate. (Staff would perform some typical calculations, charging according to the strength of the waste.) Committee member Tom Sanders emphasized that the Committee did not want to subsidize the companies electing to use the loan program. Mr. Casey said that staff will draft a policy and mail it to the Committee. Comments and suggestions will be solicited via telephone or electronic mail. If there is dis-satisfaction with the results, it may be necessary to arrange an additional meeting. MaryLou Smith related that the Demand Management Committee felt that the impact of the water PIFs was much smaller than wastewater PIFs, so they thought it would be better to look at it as a whole package for all City development fees, but none of the Committee had any objections if the Wastewater Committee wanted to make the recommendations. It is her feeling, however, that Council may want to consider it in terms of a more comprehensive plan. Mark Casey reiterated that the Wastewater Committee generally agreed to recommend the proposed plan, but they weren't ready to have it go to a resolution until it was further refined. Linda Burger observed that what isn't very clear when you have a committee of Council members and Water Board members, is what role the Water Board as a whole has when one of those committees has made a recommendation. Henry Caulfield agreed that is not clear what the Water Board's role is. Ms. Burger assured the Board that this issue would not go to Council before the next Water Board meeting. MaryLou Smith moved that the Water Board recommend to Council that when the Council addresses the issue of time payment of development fees, and they consider the Wastewater Committee's proposal of financing wastewater PIFs with the stipulations mentioned earlier, that along with their proposal, they also consider other ideas that include looking at time payment of development fees on a broader basis than just water and wastewater PIFs. Mark Casey seconded the motion, but with his second, he said that as a member of the Wastewater Committee, he too believes the Council needs to look at the issue on a broader basis. Tom Sanders, who is also a member of the Wastewater Committee, added that, in his opinion, the 4 basic elements of the proposal the Wastewater Committee came up, with are reasonable and should be supported. Water Board Minutes March 15, 1991 Page 16 MaryLou Smith further clarified her motion by stating that her intent is to let Council know that although the Demand Management Committee agreed to have Council look at the issue more broadly, that the Wastewater Committee's proposal should still be considered along with the whole issue of financing development fees. Mike Smith explained that when staff prepares the agenda summary that goes to Council, what he has heard the Wastewater Committee say and what the Water Board motion states, are two different things, so it will be necessary to include both in the summary. Ray Herrmann observed that both the Demand Management Committee and the Wastewater Committee made recommendations. He thinks what the Board is concerned about is that the Council not deal with the two committee reports independently, and that's the recommendation the Board is trying to make. Mr. Caulfield reviewed a bit of history about development fees and past policies. He related that when he became a member of the Board 17 years ago, there was a policy thrust that new growth in Fort Collins should pay its own way, i.e. pay for the expansion of water supply, wastewater treatment, etc. He agreed to compromise on that policy when the purchase of new water was tied to a large increase in development rights. It was decided that the large increase was too much to ask, so it was lowered from a proposed 58% to a 22% increase. However, in his view, there is a good case for not asking the existing people of Fort Collins to pay for expansion. He contends that the Board should not forget that they are in essence saying that the existing people of Fort Collins "should pick up the check for a lot of development." It was emphasized that the interest rate that would be applied in the Wastewater Committee's proposal would not subsidize development. Mr. Caulfield made it clear that he was not condemning this particular proposal, but he said there have been other cases where there has been an effort to aid development, and Woodward Governor was one of those recent cases. President Caulfield then called for the question. The Board voted unanimously to support the motion to send the message to the Council to look at development fees as a total picture and not consider the two committees' recommendations independently. Discussion of 1992 Budget Issues Relating to City Boards and Commissions Henry Caulfield drew the attention of the Board to a memo from the Mayor regarding soliciting input from City boards and commissions for the 1991 City budget preparation. It is Mr. Caulfield's impression that the Board doesn't have much to propose. Mike Smith explained that what Council is looking for are major issues. One of the big issues for next year is the financing of the wastewater improvements; the ones that were approved this past year in the Wastewater Master Plan. is Water Board Minutes March 15, 1991 Page 17 Mr. Smith suggested that staff meet with the Legislative and Finance Committee prior to the April 15th Council deadline for input. Tom Sanders cited two issues that might be discussed at a committee meeting and was in favor of having the committee meet. Mr. Smith asked if the committee agrees on issues, can staff forward those as Water Board concerns. Ray Herrmann said he would agree only if a minority opinion was included. He is not certain that all Board members would agree with the issues that the committee would submit to the Council as major items. Neil Grigg moved that the full Board delegate to the Legislative and Finance Committee the authority to respond to the budget issue input requested by the Mayor. Tom Sanders seconded the motion. Ray Herrmann offered a friendly amendment which Neil Grigg did not accept as author of the motion. The Board agreed by consensus that they want to be apprised of these issues before they are forwarded to the Council. Linda Burger said that some response to the Council would be appropriate. Mr. Caulfield contends that the Board doesn't have any issues outside the Utility accounts to bring up, and relative to the Utility accounts, "I assume staff already has those formulated." As for the other issues which Tom Sanders wants to explore, the Board will need more time. Ms. Burger related that staff is just at the beginning of the budget process. She added that she thinks it is awkward not to respond to the Mayor at all. Mike Smith suggested that staff meet with the Legislative and Finance Committee before the 15th, and come back to the Board on the 19th with the Committee's suggestions, and even if it is late, submit the Board's input to the Council. "I'd rather have a late report than no report," he said. Neil Grigg said it seems to him that one of the functions of the Board ought to be to advocate budget items that the Water & Wastewater Utility is concerned about. Mike Smith's solution to the problem was acceptable to the Board. Since a solution was reached, Neil Grigg withdrew his motion and the second agreed. Staff will arrange a meeting with the Committee, and the Committee will report to the Board at their April 19th meeting. Mr. Smith will get word to the Mayor that the Water Board will respond, but that the response will be late. Ray Herrmann asked to be included when the Committee meets, to address his concerns. Water Board Minutes March 15, 1991 Page 18 Staff Reports The treated water production summary was distributed to Board members. There were no questions. Since there was no further business, the meeting was adjourned at 5:15 p.m. mL!�G -77 Water Board Secretary