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HomeMy WebLinkAboutWater Board - Minutes - 08/17/1984MINUTES Water Board August 17, 1984 MEMBERS PRESENT Norm Evans, Chairman, Henry Caulfield, Vice Chairman, Ray Glabach, Tom Moore, Mary Lou Smith, Dave Stewart, John Scott (alt), Jim O'Brien (alt) STAFF PRESENT Bill Carnahan, Mike Smith, Dennis Bode, Ben Alexander, Andy Pineda, Paul Eckman, Assistant City Attorney MEMBERS ABSENT Neil Grigg, Torn Sanders, Bernie Cain, Mort Bittinger Chairman Norm Evans opened the meeting. The following items were discussed: Minutes Norm Evans pointed out that on page 8 John Scott and Jim O'Brien should be identified as alternate members. Following the correction, the minutes for July 20, 1984, were approved as corrected. Purchase of CBT Water At the last two Water Board meetings, interest was expressed in the possibility of purchasing CBT water. Dennis Bode reviewed the Utility's present supply of water to give a better perspective as the Board contemplates the purchase of CBT water. He showed an overhead slide which indicated the primary sources of the City's supply for wet, average and dry years. Direct flow rights are a good reliable source. The Michigan Ditch and Joe Wright system are another source of rights which were acquired in the early 1970's. A part of that system is the Meadow Creek Reservoir purchased in 1983. The third source is CBT water from the Colorado Big Thompson Project through Horsetooth Reservoir. This project was built for the purpose of providing supplemental water to the basin so that in a wet year when basin supplies are high, their yield is smaller; in a dry year when basin supplies are short, they get a higher quota. CBT is an excellent supplemental source of water. The fourth major source is the North Pourdre Irrigation Company shares, since the 40,000 units of CBT water which they own makes them a reliable source also. The other source category was a combination of Pleasant Valley & Lake Canal Co., other southside ditches running through the City, as well as Water Supply & Storage Co. This latter source category is difficult to use because it has a much smaller yield in dry years. The total supply is approximately 40,000 acre feet per year. This does not include reuse water. Mr. Bode explained that, as the staff studied the Utility's supply and demand, they tried to develop some criteria which are often used in water resources management to determine the relationship between the demands and the reliable supply. The staff worked with the concept called system safe yields which is used in a number of large agencies. i Water Board Minutes August 17, 1984 Page two On the overhead projector, Mr. Bode showed a representative hydrologic period from 1953 - 1982 showing thousands of acre feet, the average annual supply, and the individual supplies by year. Given the current ownership water rights, these are the simulated types of supplies the City would have for each of the years included in the period. The treated water average annual demand currently is about 18,000 acre feet. This is just an average. Depending upon the year, there would be higher annual demands in some years and lower demands in others. The question that is asked in arriving at the safe yield concept is, what is the maximum average annual demand that the system can meet with the present supply? On the computer, the staff ran these figures through different kinds of years, assuming that any of those different combinations of years could occur for the next year. In doing that, the staff concluded that the system's safe yield can support a demand level of about 27,000 acre feet at the present time. What determines this is a few critical years that are analyzed. In terms of people, it was determined that the system could handle about 1 112 times the present population. The system safe yield can be defined as demand that could be met consistently year in and year out. What would we do on those years that it is exceeded? The options would be to somehow reduce the demands through restrictions of some kind or seek other sources of supply on a temporary basis. Next Mr. Bode showed the projected demand level assuming 150,000 population by the year 2000 with a constant demand. The Anheuser-Busch demand is not included. The City has the criteria of meeting the supplies in 19 out of 20 years level and maintaining that level 10 years ahead of the time when that demand is reached. The present supply could be sufficient for about another 10 years. In other words, with the present safe yield, if no more water was added to the supplies, the projected demand would be reached 10 years from now if growth occured as projected. Mr. Bode clarified some areas as questions were asked. It was asked how much Windy Gap water will we receive. As per the agreement with PRPA, we will receive 2300 acre feet per year. The City is required to provide 4200 acre feet of effluent for PRPA's Rawhide Plant, and they, in turn, give back to the City and Water Supply & Storage a total of 4200 acre feet per year with 2300 of that going to the City. Norm Evans had a copy of a diagram about the agreement with PRPA. Copies were made for Board members. Since the question before the Board was the purchase of CBT water, Mr. Bode showed current prices of CBT, North Poudre and Halligan based on system safe yields. CBT water based on $900 per unit comes to $1060 per acre foot. North Poudre shares are currently sold at $4500 per share which comes to $1100 per acre foot. For Halligan Reservoir based on preliminary analysis, $6,125,000 for 7,800 acre feet equals $785 per acre foot. Other stock is similar to North Poudre on an acre foot basis, but because the yield in a dry year is lower, cost for safe yield becomes higher. Therefore, CBT, North Poudre, and Halligan are the good sources of supply right now. Mr. Bode emphasized two things about CBT water; it is a good supply because it has a high yield in dry years and also the price is better than it has been for a number of years. Water Board Minutes August 17, 1984 Page three The reason the Windy Gap project was built was because there was concern, particularly in the agricultural community about the City's buying up all the CBT water and the relationship that has with the ag use in the region. This is the same reason the City went to the Joe Wright project instead of buying CBT water. Many cities along the front range have purchased CBT water over the years. With Windy Gap water coming on now, that will probably end for awhile. Some of these ideas are reflected in the Water Board Policies too. It was asked if all of this water would be direct use. With either CBT or North Poudre, the City pulls water out of Horsetooth. It was also asked if Halligan is on a comparable basis, taking into account the hydrology as it is currently understood. Conceptually, it is on a comparable basis. The 7800 acre feet from Halligan goes back to the system safe yield concept. By having storage water available during the dry years, the average demand level can be raised up by 7800 acre feet. It means, for example, in a critical year, 11,000 acre feet might be provided from Halligan and perhaps smaller quantities in two succeeding years. It allows one to raise the whole demand level. This assumes that the Narrows project would not affect us. Henry Caulfield requested that for a future meeting, the staff provide an update on the Southside Ditches. The Board needs to be brought up to date on the questions of progress with consolidation, storm drainage, and in terms of the City's getting usable water. At the last two board meetings, Tom Sanders has asked about purchasing CBT water. Since he was unable to attend the meeting today, he proposed a motion, in a letter, to pursue the purchase of Big Thompson shares at the prevailing market price. Other parts of his motion were: The purchase should be inde- pendent of any other water purchases which may be required in the future and the City should spend at least $100,000 or 2/3 of existing funds in the water account. The three reasons he gave for purchasing at this time were: 1) The price of Big T water is about as low as it will be; 2) During his term on the Water Board, to his knowledge, the City has not bought any new shares; 3) The City has some money in the water fund. Henry Caulfield seconded Mr. Sander's motion. A lenghty discussion followed. Mr. Caulfield believes that the price per unit for CBT water is as low as it is going to get. He thinks that the City should consider using its funds to purchase water when the price is very low. He asked, "Should the fact that we have adequate supplies for an extended period prevent us from buying water when it is cheap?" Tom Moore commented that this action could put the City in the role of a speculator. "Is that a proper use of City money?" Norm Evans remarked that, on the other hand, it is always wise to accumulate water supply well ahead of the demands because it is not always available when you want it. Buying water in the western region ahead of time is not speculation, because of this need. Furthermore, the water fund was established for the purpose of building up water supplies. John Scott asked from whom we would be buying water. Dennis Bode replied that it would be from farmers who, for one reason or another, wish to sell it. Mike Smith cautioned that we would have to be careful from whom we bought the water. We would not want to be accused of putting someone out of farming. Water Board Minutes August 17, 1984 Page four Ray Glabach asked if the Board was discussing a one time action or a policy. The Water Board policies state that the staff is supposed to bring "exceptional values" in water to the attention of the Board. Henry Caulfield reminded the members that there is already a policy related to this action. The question is whether this is an exceptional value in relationship to alternative expendi- tures that might be made for the money. It was asked if the staff planned to do any more forecasts since Anheuser-Busch was not included in the projections because their being included may shorten the 10-year period. It was stressed that the supply needs to be considered here too, because A-B is providing an equal amount of water. Tom Moore asked when the drought study would be completed. Dennis Bode said at the end of this year. Dave Stewart asked if staff has a recommendation on the purchase of CBT water. Mike Smith replied that the Board may want to wait for the results of the drought study. They also may want to give more consideration to the Halligan proposal. Mr. Smith doesn't see the price of CBT moving up very quickly. Henry Caulfield commented that A-B has given signals for the City to proceed in different areas for their proposed plant. Perhaps it may be best to sit on the motion for awhile to buy water, he said. Jim O'Brien asked what procedure the City uses to purchase water. Mike Smith said he did not recall that the City has ever advertised for the purchase of water. Normally, those who wish to sell water bring their offers to the City; the offers are evaluated, and if they look good, and the Council approves, the City purchases the water. However, if the City were to advertise for water, they might use the following procedure: The request for water may be adver- tised for bid saying, for example, that the City was in the market for 100 units and state from what interests we want it. It is not the policy of the City of Fort Collins or the Water Board to adversely affect agriculture by the purchase of water. Staff would then evaluate all proposals and take the lowest proposal that meets our conditions. Tom Moore moved that Tom Sander's motion be tabled for the time being because of current proceedings with Anheuser-Busch, for further consideration of the Halligan proposal, and until the drought study is completed. Ray Glabach provided the second and the Board voiced its unanimous approval. In -Lieu -of Rate Mike Smith explained that the Board had not looked at the in -lieu -of rate for awhile. At the last Board meeting, it was suggested that this be an agenda item. Dennis Bode showed the history of the in -lieu -of rate from 1975 through the present. He showed a chart which depicted a comparison of the in -lieu -of rate, the prices of CBT water and North Poudre shares on a per acre foot basis. The comparison is based on the conversion factor that is used for raw water. Currently, the in -lieu -of rate is at $1,300. Historically, the City has tried to match closely the price of CBT water on a per acre foot basis. "We normally Water Board Minutes August 17, 1984 Page five try to lag the market so we aren't accused of affecting the market," he said. It appears, after some research, that CBT water is about $800 to $1,000 per acre foot. Tom Moore moved that the Water Board recommend an in -lieu -of rate of $1,000. After a second from Dave Stewart, and a short discussion, the motion passed unanimously. Halligan Reservoir Mike Smith distributed some colored maps of the Judson property. The Engi- neering Committee had met earlier in the week to discuss the Halligan issue. Following the meeting the staff summarized the salient points from the committee and drafted a resolution which was given out at the meeting today. Following a lengthy discussion and some changes in the resolution, Henry Caulfield moved that the Water Board adopt it as revised. Dave Stewart seconded the motion and it carried unanimously. Attached is a copy of the resolution with the changes noted. Michiqan Ditch Tour with City Council on September 7 Mike Smith informed the Board that staff is arranging a tour for the Water Board and City Council on September 7 to the Michigan Ditch and possibly the Rockwell Ranch on the way up. The group will leave from the Service Center at 8:00 a.m. Those who are interested should let Molly Nortier know by August 31. Staff Reports A. Windy Gap Update Dennis Bode, who is a member of the Windy Gap Operations Subcommittee, passed out some brochures on the project. He explained that the project had been planned, designed and constructed over about the last 10 years. Next spring they should begin operations. The plan for 1985 is for each participant to use just a small quantity of water. PRPA plans on bringing over about 4,000 acre feet as part of the reuse plan. The primary purpose of the first years is to make the decrees absolute. Essentially, the project's operations will consist of diverting water from the Colorado River to Granby Reservoir. From there the water will go through the CBT system to be delivered to the participants, which are Boulder, Longmont, Estes Park, Loveland, Greeley and PRPA. The City of Fort Collins gets involved indirectly through the reuse part of it. One of the provisions of the agreement was that the Conservancy District would build the Azure Dam on the Western Slope to get that project going and get the Western Slope people to back the project. The Western Slope contingent does not want to build the Azure project. The Northern Colorado Water Conservancy District has been negotiating with The Colorado River Water Conservancy District to arrive at a settlement on that and it is still pending. Water Board Minutes August 17, 1984 Page six Two other things that are happening involve the operations committee which is reviewing some of the operating rules and procedures, and looking at the carriage contract with the BUR and the allotment contracts with the participants. Back in the 1970's when they formed the sub -district, they included all the muncipalities in the sub -district by legal definition for purposes of the land issue to give security to those bonds, and now there have been many annexations. They are going back and trying to include those additional lands in the sub -district boundaries. Henry Caulfield wanted a point clarified. He recalled that one of the considerations talked about several years ago was the point that this water would not vanish on October 1 like CBT water does; it would stay allocated to each City. Mr. Bode explained that they are trying to work out that kind of operation although there are some constraints. For example, if the water is carried over, the participants lose 10% of the water that is held in that system. However, the intent is to carry it over from year to year. Norm Evans emphasized the point that, initially, the plan for each City was to finance through revenue bonds or how ever the City wanted to finance, but not by an ad valorem tax in the municipal sub -district. Now, he said, there seems to be some agitation about this. Some of the cities don't appear to want to carry their financing obligations. There is a move we need to watch in order that the municipal district doesn't get pushed into going to an ad valorem tax. Assistant City Attorney Paul Eckman assured the Board that this probably would not happen. Related to this subject, Dennis Bode reminded the Board about two tours which have been arranged by the Northern Colorado Water conservancy District to explore the eastern slope CBT facilities on August 30 and the Windy Gap facilities on the western slope on September 13. Originally the latter tour was set for the 14th. Please contact Dennis Bode or Molly Nortier to sign up for either tour. Henry Caulfield asked if there have been figures mentioned about the cost of the Windy Gap water. Mr. Bode said there are some numbers although not everyone agrees on what they are. On a present worth basis, it appears to be around $2,500 per acre foot; possibly $3,000. B. Treated Water Summary The summary was sent to each Board member previously. No report was made at the meeting and there were no questions from members. Committee Reports Dennis Bode announced that the Drought Study Committee would be meeting with Resource Consultants on August 27 at 1:30 in the Water Utilities Conference Room. i Water Board Minutes August 17, 1984 Page seven Since there was no further business, the meeting was adjourned at 5:04 p.m. Water Boa d Secretary 0 • CITY OF FORT COLLINS WATER UTILITIES JOINT MEETING Fort Collins Water Board and North Poudre Irrigation Board 7:00 a.m., Friday July 27, 1984 Water Utilities Conference Room Present from North Poudre Irriqation Board Staff Present Bob Steiben, President Bill Carnahan Ben Dumler, Manager Mike Smith Art Meyer Roger Krempel Manuel Pineda Dennis Bode Phil Schnorr Ben Alexander Alden V. Hill, Attorney Molly Nortier Jim Doyle, Engineer Present from Fort Collins Water Board Mayor Gerry Horak Norm Evans, Chairman Henry Caulfield, Vice Chairman Bernie Cain Ray Glabach Tom Sanders Tom Moore John Scott (alt) Jim O'Brien (alt) Recently the North Poudre Irrigation Company asked if the City of Fort Collins would be interested in participating in the enlargement of Halligan Reservoir. This joint meeting was held in order that the Fort Collins Water Board and the North Poudre Board could discuss, on an informal basis, all aspects involved in this proposal. The City staff had prepared a report to provide a prliminary analysis of the feasibility of the City taking part in this project, The North Poudre Board arranged tours of the reservoir for Water Board members and City staff on Tuesday July 31 and Monday August 6. Further study and discussion will follow. 35