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HomeMy WebLinkAboutWater Board - Minutes - 10/20/1989Water Board Minutes October 20, 1989 Members Present Henry Caulfield, President, Tom Sanders, Vice President, Ray Herrmann, Tom Moore, Terry Podmore, Tim Dow, Tom Brown, Dave Stewart, Mark Casey, (alt.), Paul Clopper (alt.) Staff Rich Shannon, Mike Smith, Dennis Bode, Curt Miller, Andy Pineda, Ben Alexander, Jim Clark, Kevin Gertig, Molly Nortier, Paul Eckman, Assistant City Attorney Guests Dorothy Huff, Observer, League of Women Voters of Larimer County Members Absent Neil Grigg, MaryLou Smith President Henry Caulfield opened the meeting discussed: Mr. Caulfield introduced and welcomed Doroth Board meetings for the League of Women Voters introduced Jim Clark, a new staff member who position of Water Conservation Specialist. The following items were y Huff who will observe Water of Larimer County. He also was recently hired for the Review of National Recreation Area Status Mr. Caulfield announced that the National Recreation Area proposal is being actively considered by the City Council. The Council will have a work ses- sion on the issue on Tuesday evening October 24. Any Water Board members who would like to attend are welcome. Henry Caulfield met with the Natural Resources Board and the Storm Drainage Board recently and learned their perspective of NRA designation. Prior to that meeting he tried to summarize what he thought was the essence of the Water Board's position on the NRA. "We focused on the inter -governmental relations aspects." In other words, who is going to be in charge? He stated that basically the Board's position boiled down to the point that "rather than having a new federal officer in charge of what was going to happen in an NRA area, as far as water and wastewater is concerned, we would be subject to EPA regulations for both purposes." As far as he can see, the Board was satisfied that that was sufficient, and that we would not need the Secretary of Agriculture to supersede those regu- lations. Therefore, that aspect of the NRA which contemplated the importance of a draft bill, with the Secretary of Agriculture being completely in charge, violated our concept of proper inter -governmental relations of city, county and state affairs. Water Board Minutes October 20, 1989 Page 2 Rich Shannon emphasized that the Council clearly looks to their boards and commissions for advice on various policy issues. "This is probably one of the biggest policy issues the Council is going to wrestle with and I am not sure they realize that," he said. He also stressed that Water Board members are here to try to influence the Council about important issues. "To the extent that you choose to individually, staff would encourage it," he advised. There are many people with many different opinions and it is not a time to be quiet. "This is going to be a tough decision for the Council," he concluded. Tom Moore was under the impression that the NRA was put on hold for awhile. He didn't realize that a decision was eminent. "The tough part is, "Mr. Shannon replied, "is the perception that people are either for or against it." We must convince people that we can get the benefits of what the NRA designation would offer or try to get designation without the unnecessary costs that go with it. "We want to get away from the exaggerated positions. I'm afraid that Council is at risk of being put in a corner unnecessarily," he contends. Mr. Caulfield understands that there is a staff (not water utility staff) position calling for a management study rather than a designation at this time. That runs completely counter to the position of Congressman Hank Brown, who doesn't want a management study. He wants to re -consider the draft position of putting the Secretary of Agriculture completely in charge. Tim Dow asked if the Water Board is being asked to do anything more in terms of advice to Council in a formal way? "Not in any formal way," Mr. Caul- field replied. Mike Smith stated that Mr. Caulfield was suggesting that now is the time to show up at the work session individually. Mr. Caulfield related that Council is aware of his views on the subject and they are aware of the letter sent to them from the Board. "What are the possible actions the Council could take on this?" Ray Herrmann asked. The most positive one it to try to keep it on the management study level, Mr. Caulfield answered, so the whole aspect of inter -governmental relations gets fully considered before any commitment is made. He said that Congressman Brown's draft legislation, modeled on the Upper Delaware Bill, is available for those who are interested. Mr. Shannon said that perhaps on Monday staff could provide copies to the Water Board of a fairly lengthy staff paper. He briefly summarized the options that will be presented to the Council: 1) Do nothing. 2) Endorse it, which means "yes we are in favor of it, but with these conditions." The expectation is that Congress would not accept the conditions. 3) The need more time scenario which says: "It looks like it has possibilities but we really need time to study these problem areas," and that is the staff recom- mendation. 4) Just endorse it and live with whatever we can. The risk, if it is a risk, is that we need another year to tie down the management sce- nario issues and the river designation issues. The risk there is that Hank Brown may no longer be in office and our sponsor would be gone. The staff Water Board Minutes October 20, 1989 Page 3 response is that if this is a good idea, it shouldn't be hard to find another sponsor. In the event that the Congressman is a senator, we may have two champions. "We are not sure that this logic will prevail," he con- cluded. Minutes Henry Caulfield pointed out that on p. 2 under City of Fort Collins/Fort Collins -Loveland Water District Agreement, at the bottom of the page, the word "progress" should be changed to "referral." The minutes of September 15, 1989 were approved as corrected. Northern Colorado Water Conservancy District Update Since there was no representative from the NCWCD, there was no report. Sale of Bingham Hill Reservoir Property Background information on the Bingham Hill Reservoir was included in the Water Board packets. Curt Miller, Engineering Division Manager, explained that the City purchased the 9.6 acres of land in 1905 and the 6 MG treated water storage reservoir was built in 1910. In recent years as the concrete began to deteriorate, risk of water contamination increased. Furthermore, when Water Treatment Plant No. 1 was taken out of service in 1987, the reservoir no longer worked in the Utility's hydraulic system. As a result, the reservoir became even less useful, so it was removed from service. At this point staff is concerned about liability and maintenance of the site. They have looked at demolition and at selling the property. Demoli- tion costs, established through a bidding process, were estimated at $169,512. Sale of the property, without demolition, was bid at $26,153. That bid was from the owners of the property that is contiguous to the reservoir property on three sides. After reviewing all the options, staff recommends that selling the property is the best alternative. Mr. Miller said that staff is looking for a motion from the Board that would support that position. Tom Moore said that $26,153 doesn't seem like much money for 9 acres. Mr. Miller stated that it is property with no view and it is fairly close to other market values as staff has noted other sales up there. From the City's vantage point, it has a certain detractor in that you can't look at the property value without the reservoir on it. Mike Smith added that there are probably six acres of usable property after you remove the reservoir. "The way staff looks at it, if we keep it we will spend $170,000 or should spend that much." Staff checked with all of the City departments and nobody had a use for the property that is feasible. Tom Moore moved that the Water Board support the staff recommendation and sell the property. Paul Clopper seconded the motion. Water Board Minutes October 20, 1989 Page 4 Tim Dow asked if staff has some kind of appraisals so they are comfortable with the value. "Our land right-of-way person checked into recent property transfers in that area and said we are in the $4,000-6,000 an acre cate- gory," Mike Smith replied. This is a cash transaction? "Yes, it is," Mr. Smith said. "Do we foresee any use for this down the road, Terry Podmore asked. "No, we don't," Mr. Smith responded. "We thought about whether we may need another reservoir up there and it just doesn't fit." Furthermore, with the development that has occurred since the site was acquired in 1905, he is not sure the City could get much done up there. Has the prospective buyer indicated what he plans to do with the property? "I think they want to buy it just to buffer their property so nobody else would purchase it," Mr. Smith replied. Chairman Caulfield called for the question. The motion carried unanimously. Water Board 1990 Work Plan The City Code requires all boards and commissions to prepare work plans for the following year due on or before November 30. Mr. Caulfield stressed that the Board is not excluded from considering anything else. The plan is basically a statement of what we might be con- sidering. He asked why the sludge disposal options remain on the list. They will remain on the list until that item goes to Council, Mike Smith replied. Tim Dow asked if item 3, Water Conservation Issues, could include metering. "Presumably it could," Mr. Caulfield replied. Relating to the section labeled Legal Issues, Tom Moore said that Thornton has presented some of their ideas to Water Supply & Storage Co. recently. At that meeting he asked the Thornton representatives if they would be wil- ling to present the same program to the Water Board and they said they would consider it. Mr. Smith said he would contact someone from there and try to schedule it for the November agenda. Ray Herrmann moved that the Water Board approve the 1990 Water Board Work Plan. After a second from Tim Dow, the motion passed unanimously. Report on Mayor's Breakfast Meeting Mr. Caulfield reported that Mayor Winokur arranged a breakfast meeting for all the Board and Commission representatives to discuss the various aspects of Board and Commission/Staff relationships. In his opinion, the main item that came out of the meeting was Resolution 88-78 that defines the role of council liaisons for Boards and Commissions. A copy of that resolution was included in the Water Board packets. Loren Maxey is the Water Board's liaison. The only issue they had on the agenda that pertained to the Water Board was the NRA matter, he concluded. Water Board Minutes October 20, 1989 Page 5 Mark Casey and Henry Caulfield attended a Colorado Water Congress Water Quality Issues meeting in Northglen recently. They both felt it was a worthwhile and informative meeting. Mr. Caulfield passed on to Tim Dow a speech by a legislator who tried to write definitively on Resolution 181. The Legislative and Finance Committee can give it whatever consideration they wish to give it. Staff Reports A. City Council Agenda Summary to Review Wastewater Master Plan During review of the City Manager's recommended 1990 Budget, there was some concern expressed by various City Council members regarding the City's Wastewater Master Plan, more specifically, the anticipated capital cost and financing associated with such. In response to that concern, it was sug- gested that a subcommittee consisting of some Council members and Water Board members be formed to assist in resolving the potential financing issues related to the Plan. The subcommittee's primary tasks will be to review the recommended Wastewater Master Plan and financing alternatives and submit a report and recommendation to Council by the end of March, 1990. Council members Ann Azari, Dave Edwards and Loren Maxey were appointed to the Wastewater Master Plan Sub -committee. Mike Smith said that today we need to appoint 3 Water Board members to work on that sub -committee. Henry Caul- field asked Tom Sanders, Tim Dow and Mark Casey to serve and they agreed to'do so. The major thrust of the sub -committee will be financing alterna- tives and the Plant Investment Fees. B. Request from Anheuser-Busch for Additional Water Mike Smith related that staff received a request from A-B to expand their water use to an additional 1250 AF. "In accordance with the master agree- ment," he explained, "they can double their usage." In the original agree- ment they were to use about 4200 AF and the master agreement gave them the right to double that. A-B has not requested a particular kind of water. They have told us what they want and have asked us how we want to handle it. Dennis Bode prepared an outline that suggested how staff hopes to handle the additional Raw Water Requirement for A-B. Mr. Bode took the Board through the assumptions for calculating the additional RWR: 1) Additional annual use 2) With A-B demand, water conditions. would be 1,250 acre feet. use does not fluctuate according to climatic 3) The effluent from the brewery would be 100% consumed (At least that's the assumption staff is making.) 4) Because of that, the City may be required to provide or otherwise protect other water users on the Poudre 5) And finally, enough water rights or cash -in -lieu -of meet A-B requirements for other customers; in other the drought policy and the criteria that we practice would be applied to this. by land application. 100% consumable water River. shall be provided to words, things like for other users Water Board Minutes October 20, 1989 Page 6 Mr. Bode then explained the following RWR calculation: RWR = (A-B Water Deliver) X (Supply Factor) + Consumptive Use Adj. (Demand Adj.) Where, RWR = Raw Water Requirement A-B Water Delivery = 1,250 Acre-feet/Year Supply Factor = 1.92 (to provide for supply variations) Demand Adj. = 1.18 (to account for levelized demands) Consumptive Use Adj.= 1,250 (estimated additional supply to insure no injury to other water users) RWR = (1250) X (1.92) + 1250 (1.18) RWR = 3,284 Acre-feet Cash In -Lieu -of Water Rights Cash = 3,284 X $900 = $2,955,600 The above is the logic that staff went through to come up with those fig- ures, Mr. Bode said. Mike Smith commented that the Board may think that 3,284 seems like a lot in comparison to the 1250, but by the time you include the drought protection and the consumptive use factors, "it's what it has to be." "So that's going to eat up about 4 MGD," Dave Stewart remarked. "Actually, they have said they will not exceed the limits in the master agreement as far as the max day use. Their max day is 4 1/2 and they have, up to this point, said they will not exceed that," Mr. Smith responded. In other words, they are not asking for more treatment capacity; they are just asking for more water. "What's their average now?" Mr. Stewart continued. "About 3.5 million," Mr. Smith replied. Mr. Caulfield asked how the City is going to obtain the consumable water. "There are a couple of things we can do," Mr. Smith responded. As we go through some of our change in use procedures with the Southside Ditch water, we also may be able to use some of that. We may be able to buy addi- tional water to augment the river. He added that we don't have to have "reusable" water, and he stressed that with the dollars, you have more flex- ibility. Water Board Minutes October 20, 1989 Page 7 Mr. Caulfield asked if $900 isn't a little low. "That's our current in - lieu -of rate," Mr. Smith replied. "We haven't been updating that as we should," Mr. Caulfield asserted. "Does this mean that the $2,966,000 is a one time payment and we come up with the water?" Tim Dow wanted to know. "They still have to pay their water bill, right?" Ray Herrmann asked. "Oh yes," was the reply; "it's a raw water requirement." Mr. Dow also asked if this would come from those recently acquired existing supplies. "That's a decision the Board doesn't have to make today, Mr. Smith said. The City has a sufficient supply right now to supply A-B "and put the money in the bank" and hold if for a future need. He further explained that this is like any new developer coming in wanting more water. Dave Stewart asked if this affects our PRPA agreement on consumptive water. "No, it shouldn't," Mr. Smith assured. Tom Moore asked what the timing is on this. "They want to use the water sometime in 1990," Mr. Smith replied. Discussions indicate sometime in sum- mer or fall of 1990. We would suggest if we agree to this, that they pay us as soon as possible, he added, so we can put the money in the bank. Has the Utility been offered any good water deals? Tom Moore asked. "No great deals," Dennis Bode responded. We do get a few calls occasionally from people who have a few shares to sell --no large quantities though. Do you see CBT water going up? Mr. Bode said that it has gone up some. The published reports indicate that it is approximately $1,000 a unit. "Is there any possibility of raising our cash -in -lieu -of water rate?" Mr. Dow asked. "It's kind of a 'catch 22'--you don't want to bite the hand that feeds you either," he added. Mr. Caulfield believes that the figure is decidedly below the market. "In terms of the CBT market, it is," Mr. Bode replied. The last 105 AF the City bought of Southside Ditch water was roughly $700 an AF, he explained. Normally as the price of CBT water has gone up, we have tried to lag that market, he continued, so nobody can say we are leading it and causing it to go up. He concluded that we are still fairly comfortable with it, but if it goes up much more, we may want to con- sider raising it. Is the in -lieu -of on a unit basis or an acre foot basis, Mr. Caulfield asked. It's on an acre foot basis. Mr. Smith explained that the Board adopted the policy of 1 AF per unit. Tom Moore wanted to know if staff has some good ideas about what to do with Southside Ditch water, or other ways of providing water for A-B. "I think there are a number of options," Mr. Bode replied. For example, some storage options like Halligan. Mr. Smith emphasized that if the Board approves this, there will be a need to have further discussions on how we use the money. Water Board Minutes October 20, 1989 Page 8 Tim Dow related that when the City was recently acquiring water we bought it at market price. He contends that the City's policy ought to be "if we are buying at market price, we ought to be selling at as close to market price as we can get." He asked staff to look at the market price policy. Dave Stewart added "or it could be put in the formula as "the average of the last 90 days." Ray Herrmann wanted to know if A-B has any problems with the formula and the cost. Rich Shannon responded that "it's fair to say that they want to be treated like any other business in town." For example if HP asked for 200 additional acre feet a year and we requested $950 instead of $900 because they are HP, there is some question of equity there. "Yes, but there is a substantial difference between 200 AF and 1200 AF," Ray Herrmann argued, "in terms of the percentage of available City water that is being used up." Tom Brown asked what we would do if the price had gone down to $700. "We go by the in -lieu -of price until we change it," Mr. Smith stated. The ques- tion really is, "is this the proper price now or do we change it by our action through the Council?" Mr. Caulfield asserted. It has been several months since the Water Board has considered this matter. He stressed that the City does not want to be looked at as being intrusive in the market. That philosophy has made us rather sensitive about this issue for the last 10-15 years. "Whether we need to be that sensitive now is a good question," he added. In addition, Mr. Bode said that we have tried to encourage more cash by keeping it a little lower. Mark Casey asked if being about 10% lower encourages cash. "I think in some cases it does," Mr. Bode replied. "Unless a developer already owns water rights," Mr. Smith clarified. Dave Stewart moved that the Water Board accept staff's recommendation to negotiate with A-B for additional Raw Water Requirements. After a second from Ray Herrmann, the Board voted unanimously to approve the motion. Tom Moore asked about the wastewater side of this issue. Mike Smith replied that A-B says the wastewater is all going to land application. Staff telephoned Water Board members recently to get concurrence on a recom- mendation to the City Council that the Council authorize the City's partici- pation in the Northern District's study of the new regional treated water supply proposal. Henry Caulfield said that was related to the Board's pre- vious discussion of a joint effort with the three districts. Those districts are very much in accord with this idea, he stated. Rich Shannon, Mike Smith, Loren Maxey and Henry Caulfield met with ELCO and it is interesting to note how favorable they are with what we have been talking about for some time. The City Council has approved what the Board was polled about on the telephone. Now we are ready to go. Ray Herrmann moved that the Water Board confirm their support of the resolu- tion that went to the City Council on the NCWCD study. Dave Stewart pro- vided a second. The motion passed unanimously. Water Board Minutes October 20, 1989 Page 9 Mr. Caulfield referred the Board to the information on the regional water study sent to them prior to the telephone conversations. All the details of the study have not been reviewed with the Board. Mr. Caulfield asked for ideas, suggestions or comments about what has been outlined for the study. Dave Stewart asked if the District consulting team will be providing draft reports. "Right now the steering committee is planning to meet with the consultant every 3-4 weeks," Mr. Smith replied. We plan to meet every other week for the length of the study period with Karl Dreher, the project man- ager of the study. The District hopes to have the draft study completed by May 1 of 1990. Dave Stewart asked if there is anything that is needed from the Water Board for this study." "Not at this point," Mr. Smith said, "but as we go along we may want to review it, and get some direction." Mr. Caulfield proposed that the Engineering Committee be used to refer matters to, "but that won't mean that anyone else can't get involved," he stressed. Mr. Caulfield related that he talked to a person form Colorado Springs at the Colorado Water Congress Water Quality meeting in Northglen and he said they have three districts there that are involved in the same issue of joint treatment of the water supply. The arrangement for that is under the Authority Act of the State of Colorado. He explained some of the details of the way the authority is set up. That detailed information will go to staff for input and consideration of the institutional arrangements that will relate to our local situation. Mr. Caulfield directed the Board's attention to the minutes of the City of Fort Collins/Tri-District Staff Meeting of October 4, Section 4 that reads: "The City and the South District's staff have tentatively agreed that the City will sell up to three million gallons per day of treated water to the South District in 1990, 1991, 1992 and 1993. By doing this, the City and the Tri-District should have enough time to study various treatment plant expansion options without the South District running short of water. Howev- er, there is the possibility that additional treatment plant capacity will not have been fully constructed by 1993 and, thus, both the City and the South District may have to impose watering restrictions to get through that summer. The -staff members felt this was a reasonable trade-off in order to make sure the most appropriate and cost effective decision is made from a regional standpoint." "We feel we would have the water, Mr. Smith assured the Board, "but as Mr. Caulfield stated, that paragraph indicates an abundance of caution. It's just that there are so many variables; for example if the City's growth rate should pick up, we could have some problems." Mr. Smith asked the Board if receiving the minutes of these meetings is pro- viding them with enough information, or would they like to have more input on what is going on. Mr. Caulfield also keeps the Board updated at each Water Board meeting. Water Board Minutes October 20, 1989 Page 10 Tom Moore asked how what we have right now will fit in with the new regional water study. "They are connected in a sense," Mr. Smith replied. It is hoped that the regional water study will answer some questions for the Dis- tricts and the City as to what our next step should be on water treatment. Without that study the Districts were going to build a new treatment facil- ity of their own and they were not considering an option of buying the water from the City or developing a regional plan, etc. "I think it's critical to get that information developed so they can review it," he stressed. Mr. Smith thinks the Districts feel better about the Northern District coor- dinating a study rather than the City of fort Collins, but the plans are to continue meeting with the Districts. He emphasized that the City doesn't intend getting the Northern District involved in the negotiations with the water districts. They are just coordinating a study, he said. Mr. Stewart asked if Council has approved the agreement and the study. "Yes, they have approved both," Mr. Smith said, but Mr. Caulfield added "not the buying of the water from us." There will be a separate agreement on that within the next month or two. The other agreement probably won't go into effect for a number of years, so the Districts wanted a separate agreement on the arrangements for buying water from the City. Mr. Smith related that the Utility sold the south District about 50 million gallons of water during the summer at our retail rates. That was expensive for them. They hope we can do better than that in the future. Rich Shannon said "we have more District negotiations going on now than we have for a number of years and the potential for it to be confusing for everyone is there. The Board is getting minutes from 3-4 different meet- ings," he said, "and I just wanted to make certain everyone understands that and feels comfortable with the level of communication." Wilderness Water Rights Mr. Caulfield drew the Board's attention to the staff memo on wilderness water rights. This has gone to the City Council's legislative committees as of September 21. Mr. Caulfield would like to refer this to the Water Board's Legislative/Finance Committee for whatever consideration Tim Dow, the chairman would like to give it. "As far as I know, it is consistent with the interest that we expressed in the past concerning maintaining down- stream water rights as opposed to federal water rights downstream. He sug- gested that any Board member having concerns about it, contact Tim Dow. We will bring this issue up for discussion at our next meeting after we have had a chance to review it. This is a matter that is before the Congress now. Between Tim Wirth and Bill Armstrong, it receives quite a lot of press cov- erage. The Colorado Water Congress has spoken on this question; the Northern District has also spoken on this question. Mike Smith pointed out that this is easily confused with the reserved rights issue. Wilderness Water Rights is a separate issue. Water Board Minutes October 20, 1989 Page 11 Committee Reports Engineering Committee - Halligan Reservoir Enlargement Study Chairman Dave Stewart reported that the Engineering Committee met on October 4 to review and discuss the Halligan Reservoir enlargement study. The con- sultant concluded that from an engineering, environmental and permitting perspective, Halligan Reservoir can be expanded to provide between 15,000 and 40,000 AF of storage. The Engineering Committee made the following recommendations: 1. The Woodward -Clyde feasibility report should be accepted as it provides a good overview of alternatives and their respective costs, advantages and disadvantages. 2. Utility staff should continue to work on the operations study to provide the yield and operation criteria needed to further evaluate the pro- ject. 3. Utility staff should continue discussions with the North Poudre Irriga- tion Company to develop a mutually beneficial agreement regarding the enlargement and future use of Halligan Reservoir, and if necessary, request an extension of the present agreement which provides for nego- tiations between the parties regarding the enlargement of the reservoir. 4. Future evaluation of alternatives should focus on those alternatives identified as most feasible in the report, including the use of roller compacted concrete at all three sites. Dennis Bode reported that staff is in the process of estimating the system safe yield to the City for different reservoir sizes and operating scenar ios, to determine how this kind of a project could fit into our system and with our water rights. He said that he expects staff will have that infor- mation in the near future. Dave Stewart mentioned that the Engineering Committee agreed to be very sen- sitive to what happens to Two Forks. "That could happen here with Phantom Canyon being downstream," he said. Henry Caulfield pointed out that unlike Two Forks, there is already an existing dam there. Tim Dow asked what the current size of the reservoir is. Dennis Bode replied 6400 acre feet. The 40,000 figure includes the current 6400 and there is a conditional decree for 33,000 AF to make a total of 40,000. Mr. Caulfield asked if a review of the hydrology has been done. Mr. Stewart said that is what staff is working on now. Mr. Bode explained that, on the average, there is approximately 50,000 acre feet of run-off annually above Halligan. In many years the flow is high enough that water could be stored under that new conditional decree with certain additions, depending on whether Grey Mountain Dam would be down below, he said. "In relation to the rights of Seaman?" Mr. Caulfield asked. Mr. Bode said that Seaman would be Water Board Minutes October 20, 1989 Page 12 senior to Halligan. He concluded that staff feels the potential is there for Halligan. We have done enough work to know that, he assured the Board. There are a number of issues that need to be considered; an arrangement with a potential Grey Mountain, for example. Henry Caulfield pointed out that Seaman would be flooded if there were a Grey Mountain. There are also the other aspects of how the water is used and exchanges that are arranged with North Poudre, etc., Mr. Bode added. What is the conditional decree, the extent of it and when was it estab- lished?" Tom Brown asked. "The conditional decree is 1986, so it is just a recent decree," Mr. Bode replied. "It's junior to most things except Glade," he added. In the studies will we be able to determine a cost for a per acre foot yield, and make a comparison of that to investing our money?" Mr. Caulfield asked. "Yes, we will," Mr. Bode answered. "How are we going to relate this to our 2035 estimates?" Mr. Caulfield con- tinued. He wasn't asking that it be considered now, "but we need to think about that when we consider this question further." Mr. Bode reminded the Board that when we were looking at the 2035 scenario, we needed roughly 40,000 AF in the future. "We purchased approximately 10,000 AF, leaving about 30,000 AF within that time frame. The other part of that was to be acquired through the RWR and "we never spelled out exactly what was to become of those RWRs." It's possible that we would get enough cash in the future to apply that to a Halligan or something similar; or there may be some other variations. "We will need to look at those elements as we go along," he stressed. Dave Stewart said that the other thing we need to emphasize is even if we build the 40,000 AF storage, we don't deliver all 40,000. "That's right," Mr. Bode replied, "the type of yield we would expect is more like 8-10,000 AF of system safe yield." "Does this have bearing on our mainstream Poudre rights in terms of exchange possibilities?" Mr. Caulfield asked. We can't always use our main river rights given the timing questions, he added. "I think it's important to know whether this is useful in making those fully useful." Through exchanges you would be more likely to use your rights more fully, Mr. Bode responded and added "and particularly the Southside Ditch rights." Mr. Smith pointed out that looking down the road towards a drought period, "we are somewhat deficient in storage." This will help alleviate that. When we perform the financial analysis portion, we will be comparing this option to the yields of those other water rights during a severe drought. Tom Sanders believes the project is attractive from several of our philos- ophies: 1) It's helping out the Ditch company and helping us a great deal too; 2) We want to start controlling the water future in a lot of areas up there; 3) We do need more storage and enlarging an existing dam is going to be the cheapest as far as legal battles, etc. than to start at a new site in Water Board Minutes October 20, 1989 Page 13 a new location. "So far, he stressed, we haven't had any major concerns as to why it shouldn't be done, and we are progressing at the proper speed on this. Dr. Sanders also observed that if we have some problems with meeting the 2035 goals, "let's revisit them." We met part of it far earlier than we thought we would, he added. Mr. Smith remarked that what Dennis Bode brought up about the additional 30,000 "is wide open as to how that water can be acquired." Henry Caulfield reminded the Board about Ward Fischer's proposal for a regional water bank. Mark Casey has agreed to look into this. Mr. Caul- field suggested that this be a part of Neil Grigg's Water Supply Committee. It has been suggested that Fort Collins meet with Greeley, Loveland and Longmont to consider that question. Mark Casey asked if there has been any opposition voiced by the Phantom Canyon ranch or the Nature Conservancy. Mike Smith said the Nature Conser- vancy is watching very closely. He doesn't think they are opposing it at all; "as a matter of fact, I think they will be supportive of the project especially if they can have a little storage to keep their flows up during the critical time when Brown Trout are spawning, etc." He added, "I think we can make them a supporter if we handle it properly." As the project pro- gresses, he believes it will be imperative to keep those effected involved and informed at every level, so there won't be any surprises. Henry Caulfield clarified that the Nature Conservancy is an environmental land purchasing organization that manages the land they buy or they turn it over to the Park Service. "They shouldn't necessarily be put in the same basket as some of the other environmental organizations.,' "What we need to look at now, Mr. Smith stressed is if this is a project that we want to be involved in and can we work on an arrangement with North Poudre that is satisfactory to us?" North Poudre needs to be able to bene- fit from it as well. Rich Shannon asked about the timing relative to extending the option. We met with North Poudre last week, Mr. Smith said, and we will meet again in about 3-4 weeks. Their attitude is that we are working together and there is no problem extending the option if we have to. The mood is positive, he stressed. Election of Officers The only elected offices are president and vice president Mr. Caulfield explained. The secretary is selected from the staff. He asked for nominations for president for 1990. Tom Sanders nominated Henry Caulfield. Dave Stewart moved that nominations be closed and that the Board cast a white ballot. Tom Moore seconded the motion. Mr. Caulfield related that his current term expires in 1991 and assuming his health is good, his Water Board Minutes October 20, 1989 Page 14 intention is to remain on the Board until that time. "I am not going to accept another appointment to the Board after 1991," he said. I would, how- ever, welcome your support for the coming year." Mr. Caulfield was re- elected unanimously to a second term. President Caulfield asked for nominations for vice president. Dave Stewart Nominated Tom Sanders. Tom Moore seconded the nomination. Dr. Sanders was re-elected unanimously to a second year. Mr. Caulfield asked that the minutes show that the Board recognized Water Board secretary Molly Nortier for another year of fine service to the Board. "She does an excellent job on the minutes and keeping Board members and Council members informed," he said. Other Business Terry Podmore inquired about the situation regarding the Parkwood Home- owner's Association. Mr. Caulfield explained that this was the proposal from the Homeowners Association to use raw water on their green belts. Mr. Bode said that Webb Jones has been doing some work on a policy. Mr. Smith said there would be an update at the next meeting. Mike Smith updated the Board on the Michigan Ditch filing. "We did not have to go to trial," he said. The judge signed a supplemental decree last week for the Michigan Ditch; part of it is absolute and part of it is condi- tional. What it does for us, is that it lets others know that there prob- ably isn't enough water left up there for them to appropriate. "Hopefully we won't get challenged again. This was the best way our legal counsel thought we could protect ourselves," he said. Mr. Smith related that our attorney has strongly advised that we acquire a little more Meadow Creek water, in Meadow Creek Reservoir to supplement the Ditch during dry years. "We will get back to the Water Board on that," he said. Have we completed our physical work up there, Mr. Caulfield asked. "Up to the Michigan River. We are piped from Agnes Creek to the Michigan River. The Ditch is still open from the Michigan to Cameron Pass. We backed out of covering it because of the lawsuit etc.," he said. A study may be done to ascertain the cost effectiveness of covering it. "How much did the legal action cost us?" Mr. Sanders asked. The trial last year cost $300,000; the cost of filing the new decree was about $100,000. Surprisingly, the positive action cost us less than the defensive action, Mr. Smith responded. Can we get money back from those who challenged us? "We looked at that when the trial was over and there wasn't any basis for it. There was little chance of filing for frivolous type action, Mr. Smith replied. The case, however, did set a good precedent for anti -speculation. "It was a good solid case," he concluded. Tom Sanders asked if we have retained the services of John Carlson to take action to prevent other similar challenges. Mike Shimmin is our attorney for the Southside Ditches and the Thornton objection," Mike Smith explained. Mike Shimmin and John Carlson worked closely on these issues. "We haven't Water Board Minutes • • October 20, 1989 Page 15 selected anyone yet to get involved in Halligan. We may retain John Carlson for that when the time comes," he said. President Caulfield reiterated the possibility of having Thornton come to the next meeting to update the Board on their plans. Rich Shannon wanted to clarify an item from earlier in the meeting when the Board discussed the A-B request for additional water. When Busch discussed the need for more water, they indicated that they have no plans for major physical plant expansion. "They think they can run that much more water through their existing pipes," he added. Some types of beer take a lot more water to brew than other. "Surprisingly, the dry beers take more water," he laughed. Henry Caulfield asked about anything new on the possibility of other develop- ments on the property out there. Mr. Smith hasn't seen anything specific. Molly Nortier asked Water Board members to respond directly to the Northern Colorado Water Conservancy District by November 3 if they plan to attend the annual fall water users meeting on November 13 in Greeley. Since there was no further business, the meeting was adjourned at 4:55 p.m. m r- t nit Water Board Secretary