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HomeMy WebLinkAboutWater Board - Minutes - 03/24/1989Water Board Minutes March 24, 1989 Members Present Henry Caulfield, President, Neil Grigg, Mary Lou Smith, Ray Herrmann, Terry Podmore, Tom Moore, Tim Dow, Dave Stewart, Chester Watson (alt.), Mark Casey (alt.) Staff Rich Shannon, Mike Smith, Dennis Bode, Linda Burger, Wendy Williams, Webb Jones, Ben Alexander, Molly Nortier, Paul Eckman, Assistant City Attorney Guests Ari Michelsen, President, Bob Sanz and Dave DuBois representing the Natural Resources Board. Members Absent Tom Sanders, Vice President President Caulfield opened the meeting. The following items were discussed: Minutes The minutes of February 17, 1989 were approved as distributed. Update: Northern Colorado Water Conservancy District Since there was no representative from the NCWCD present, there was no report. Lease and Management Plan for Water Treatment Plant No 1 Site Staff provided a memo to Water Board members and representatives from the City's Natural Resources Board giving the background of the plan as well as seven suggested conditions to be included in the lease. The Colorado Division of Parks and Outdoor Recreation presented a proposal for the management and use of the Water Treatment Plant No. 1 site at the Water Board's January 20 meeting. Their proposed management was structured as a no -cost, 15 year lease of the site and was divided into two phases. According to the memo, phase 1 consisted of some minor improvements to the site to accommodate rafting, fishing and picnicking with activities limited to the area between the entrance and the filter building. Phase 2 proposed more substantial site improvements with expanded activities covering the entire site. At the meeting it appeared that the majority of the Water Board members were in favor of pursuing some kind of an arrangement with the Division of Parks. Staff is in favor of leasing the site to the Division of Parks. However, they recommended a more conservative approach and suggested that seven conditions be included in the lease. These will be discussed individually later. Water Board Minutes March 24, 1989 Page 2 President Caulfield said that he and Tom Sanders from the Water Board; several members of the Natural Resources Board and representatives from Trout Unlimited and Friends of the Poudre toured the site on March 10 with Ben Alexander as their guide. Joe Maurier from the Division of Parks was there to answer questions about the DOPOR proposal for the site. Mike Smith went through each of the following seven points that were listed in the staff memo: 1. The term of the lease would be no longer than five (5) years, with renewal upon Water Board and City Council approval. Discussion: Mr. Smith said they thought the proposal for a 15 year lease or even a 10 year lease was too long to begin with. "We don't antici- pate problems," he said, "but we would like to get some working experience in those first five years." Ray Herrmann asked how that would limit any capi- tal investments the State would make. "Actually, the State would limit their activities to Phase 1 and not proceed with Phase 2 until the first five year period ends," he replied. "Nothing would be developed on the back side of the plant," he added. 2. Any development activities would be restricted to the area between the entrance and the filter building. Discussion: This ties in with Point 1, Mr. Smith explained. 3. The City will not be subject to any fees for use of the "developed site" (defined as the area between the entrance and the filter building). Discussion: If there is any City function at the park the City will not be charged any fees for the "developed site," Mr. Smith clarified. City is defined as the City as an institution and not as individual City residents. 4. All improvements to the site must be approved by the City prior to con- struction. Discussion: This gives the City more control as to where construction and improvements occur. 5. The Division of Parks will be responsible for the maintenance of all facilities (roads, buildings, landscaping, etc.) within the "developed site," including prevention of runoff into the River. Discussion: Self explanatory 6. The Division of Parks will be responsible for the repair and/or restora- tion of any damage to the grounds or facilities or any environmental damage, including wildlife habitat and water quality. Discussion: The plant site is a very sensitive area, Mr. Smith stressed. "We want the Parks Division to use extreme care not to destroy that fragile environment." Water Board Minutes March 24, 1989 Page 3 7. The Division of Parks will provide continuous supervision of the site to prevent vandalism and provide policing and upkeep of the grounds. Discussion: Mike Smith emphasized that when the Division opens the area, we want to ensure that they continually supervise all activities. Henry Caulfield asked where public liability stands. Paul Eckman responded that there will be an indemnity clause as a part of the agreement, as there was when the "Picnic Rock" agreement was drawn up. Mr. Caulfield also asked about Seaman Reservoir. There is now a bridge where one can drive or walk up to the Reservoir, he said. "Does your definition of the area contemplate that we would permit walking or driving up there?" Mr. Smith replied that Seaman belongs to Greeley and he doesn't think that Fort Collins can prevent someone from going to some one else's property. "We would probably ask the state not to allow access up there unless they had an agreement with Greeley," he said. "The State has already talked with Greeley," he added. Mr. Caulfield asked for comments and questions from the representatives of the Natural Resources Board. Ari Michelsen, president of the Board, explained that the NRB has met with Mike Smith two times. "We have also fol- lowed this since the Water Board and the NRB made a joint recommendation on "Picnic Rock," he said. Overall, the NRB strongly supports the proposed Water Treatment Plant Site plan. They believe it is a good use of City resources. It is a good use in terms of the natural area, in terms of poten- tial for environmental education, and it certainly addresses safety issues in terms of rafting put in. It also provides some excellent recreational oppor- tunities. However, Mr. Michelsen went on to say, the NRB has some concerns that aren't directly related to natural resources. The proposed development is very inten- sive for a relatively small area, he began. The provision in the lease that any development must be approved by the City would probably answer that con- cern, he said. Another concern was that the design of the park should reflect our local area. "Some of our questions for the DOPOR when the Picnic Rock issue was being discussed, were "how is it going to be managed and how are you going to handle people?" The State said parking would not be a problem, but as we know, it has become a problem. We want to make sure that the area is aesthetically pleasing to the City, he emphasized. Another issue is a fee for a pocket park; charging a full state fee for a very small park area. The proposed fee seems more reasonable for a put -in or take out. The State is looking at the possibility of charging variable fees depending upon the area; perhaps a different fee for commercial users since they use it more heavily than individuals. The NRB's last concern was the overall plan of the Division of Parks and the Division of Wildlife for the Poudre River. Bob Sanz added that if the City is prepared to address the kind of development the State is proposing, he thinks we ought to be aware of those kinds of issues. Water Board Minutes March 24, 1989 Page 4 Mr. Caulfield pointed out that the No. 4 condition could address the develop- ment question. As far as the fees are concerned and what they plan to do with the whole river, those questions aren't appropriate in the lease. It seems to Mr. Caulfield that the key question is that we either make a lease or we don't make one. "The State operates the site according to the policies with respect to that area. If we don't like what they plan to do, we don't make the lease," he contends. Mr. Caulfield related that the Water Board basically has never discussed or taken a position on what should happen to the treatment plant property in the long run. "We know it would be in the bottom of Grey Mountain Reservoir should the reservoir be developed." The idea of a five year lease is consis- tent with our not having a long term position, he concluded. Mike Smith agreed that the Board and staff have not given serious thought to potential future uses of the area. He pointed out the importance of the sec- ond to the last paragraph in the staff memo which states: "It is important that the City not commit to a specific permanent use of the WTP No. 1 site at this time. Detailed evaluation of other potential uses, by either the City or others, has not been performed yet. In that regard, the proposed use by the Division of Parks should be considered as temporary until all the options can be thoroughly appraised." Mr. Smith informed that Board that staff has prepared a lengthy document on the evaluation process of the use of the site. This can be used in five years to explore other ideas. In the interim, this plan seems like a fine idea, he concluded. Paul Eckman asked who is going to review and approve the State's plans. Chairman Caulfield proposed that the Board address how to handle approval of the plan. Mike Smith suggested that the Water Board convene, invite the Natural Resources Board, and at a joint meeting review and approve the development plan. Mr. Caulfield doesn't think the Water Board should be involved in micro management at the site. Neil Grigg stated that in terms of establishing a principle for that, the principle would be that the Water & Wastewater Utility, would have the approval authority over the proposals for land use changes in terms of establishing first land use plans. The Water Board would be a good review authority to advise the staff. Staff would have the approval authority based on what the Water Board recommended. After that, the small changes or incremental changes would be routine. Then the Water Board would not be into micro management, but would be setting some guidelines in consultation with the Natural Resources Board. Dave Stewart asked what staff is going to ask the Water Board and NRB to review. "Almost like what is mentioned in Phase 1, but more detailed," Mr. Smith responded. Water Board Minutes March 24, 1989 Page 5 Neil Grigg moved that the Water Board approve the concept of the lease sub- ject to the conditions listed in the memo. Dave Stewart seconded the motion. The motion passed unanimously. Neil Grigg announced that Ari Michelsen gave a paper on options for leasing water at the recent Colorado Water Conference in Fort Collins. "It's very interesting," Dr. Grigg said, "and it relates to some of the things the Board has discussed." Mr. Michelsen worked on the paper with Bob Young, an econo- mist at CSU. Mr. Young suggested that the Board invite Mr. Michelsen to a meeting sometime to discuss the concept of leasing options. Mr. Michelsen agreed to do that. He will be contacted in the near future about arrange- ments. Dissolution of Mountain View Sanitation District Materials on the Dissolution of the Mountain View Sanitation District were distributed to Board members in their packets. According to the memo prepared by Linda Burger, the City entered into an agreement in 1967 with the Mountain View Sanitation District stating that the City would treat wastes collected by the District, and that the District would dissolve and turn their system over to the City when their debt for the collection system was paid off. Attorney Alden Hill has been in contact with the City over the last few months in order to arrange the dissolution of the District. In a letter attached to the staff memo, Mr. Hill raised a num- ber of issues that need to be addressed before the District can be dissolved. Most of them are minor and can be agreed to by the City. The two major issues are the request that District customers be granted inside City rates when they become customers of the City and that consent to annexation not be required for District customers. Staff is seeking direc- tion from the Water Board on resolution of these issues, Linda Burger said. Chairman Caulfield asked for questions and comments from the Board. Tim Dow had questions on the staff recommendation that District customers not be required to annex or to sign annexation agreements. Are there any exist- ing policies about that? What are the advantages and disadvantages from the City's standpoint on whether that item ought to be required? Mr. Caulfield was surprised to find in the "fine print" of the memo that the City agreed somehow that the District wouldn't be required to annex. Is that a bar against the City requiring that now as distinct from it being a con- straint at the time of the original contract? Mr. Dow said he was inquiring about that because he knows it has been City policy, through the P&Z process, that anytime an out -of -City water tap or sewer request is granted, it's standard that a condition of granting the request is that the property owner agrees to annexation. He believes that it is a good policy and unless the City is prohibited from doing that in this case "we ought to take another look at it." Water Board Minutes March 24, 1989 Page 6 Linda Burger discussed some of the issues involved. She prefaced her remarks by saying that it has been a struggle to go through the contract and the existing code and try to bring the two together because they don't fit very smoothly. She explained that the City Code does require those granted out - of -City service to sign an agreement that the party will annex when requested to do so by the City. On the other hand, the contract that was signed in 1967 says that consent to annexation will not be required of those who utilize the District's sewage facilities. The opinion from the City Attorney's Office states that "given the provision in the contract, it is felt that the City does not have to go through with the annexation requirement." The contract would supersede, hav- ing been entered into as an agreement first. There are a number of side issues involved in whether or not people should be required to annex. Although an election was not required at the time that the agreement was entered into, an election under current law is required; that is, the electors of the District have to vote on whether or not to dis- solve the District and come into the City system. Annexation agreements would likely become an election issue. Ms. Burger went on to say that the City does like to have annexation agree- ments, and also, the City would prefer to see Districts of this nature go out of business. The agreement states that the District will dissolve and the City will provide service, but as Paul Eckman expressed it, it's kind of like a marriage without any divorce conditions. She spoke with the planning office to get their views on annexation agreements and if we would be creating problems for them by not requiring annexation agreements. Planning's concern is that if open parcels of land are subsequently subdivided and new taps are issued, that those people getting new taps have to sign annexation agreements. "But they are not so concerned if we don't require annexation from the 500 taps that are currently there. They just don't want to extend it." Mr. Caulfield asked if there was any way of differentiating these in terms of the agreement. Ms. Burger replied that it could be a matter of if the taps had already been purchased or if the property owner had paid property taxes to pay off the debt. In other words, you would have to come up with a defi- nition of what constitutes an existing customer of the District and then not extend the exemption from annexation to anyone further. Paul Eckman related that the City had the annexation agreement in its code at the time of this agreement, just as it is now. "The difference is that we were not providing service to customers outside of the City under this agree- ment. We were just providing a contractual service to a district. That's probably why they thought that paragraph 20 would not violate the code." Mr. Caulfield asked if there is much undeveloped land in the District boun- daries. Ms. Burger replied that there is a fair amount. Mr. Caulfield also pointed out that the memo states that this could be a precedent for some similar cases. How many similar cases are around for which this could become a precedent? In terms of precedent, Ms. Burger is Water Board Minutes • March 24, 1989 Page 7 primarily concerned about the out -of -City services rate issue as opposed to the annexation. "Here we have a specific contract provision that says that consent to annexation is not required," she stressed. Mr. Caulfield wondered if the Laporte agreement has an annexation clause. "Laporte is the one that we expect to be dissolving soon," she replied, "because their debt should be paid off shortly." On the wastewater side, there are three districts in question: Laporte, Mountain View and Cherry Hills. They are all collection system districts, formed for the purpose of taking on debt in order to build a collection system so they could connect with the City. Would there be any likelihood that we would want to enforce any annexation agreements in Laporte, Paul Eckman asked. "It's unlikely," Ms. Burger replied. "It's going to be a long time before we get that far out." What about Boxelder? "That's a different type of district," she said. As a matter of background information, who provides the water supply in the area of Mountain View? "Some customers are served by the City, some are served by ELCO, and some by a District called Sunset," Ms. Burger responded. Mr. Caulfield asked who does the operation and maintenance of the system for Mountain View. "The City maintains the collection system," she replied. She added that in the original agreement, there was an additional charge to the original rates to pay for maintenance of the system. "Of course the rates have changed a lot over the years. There still is an additional charge." Mr. Caulfield returned to the issue of defining what constitutes the current customers of the District. "We have come up with anyone who has purchased a tap whether they have put it into service or not, as one definition of who's in the District; or anyone who has paid property taxes for the purpose of paying off the bond." It would be existing owners not a future owner. It's a matter of how hard we want to press negotiations with the District, Mr. Caul- field believes. Neil Grigg asked if they would pay out -of -City rates until they are annexed. Paul Eckman replied, "yes." Dr. Grigg commented: "If they were to escape being classified in this annexation possibility, that's one thing, but if they would agree to be subject to annexation, then the in -City rates could be tied to when they were annexed. "I'm not sure there is a way to link these together," Ms. Burger responded. "If you gave them inside City rates, it would be strange to also not ask them to sign an annexation agreement; but if you are in agreement with staying with outside City rates, then it seems to me we have more room to go with the annexation agreement issue," she contends. Mr. Eckman said that the agreement is pretty unclear on that question. The rates issue is a little easier to understand because the rates that were established under the agreement were closer to the outside City rates, if not the same. Water Board Minutes March 24, 1989 Page 8 Mr. Caulfield drew the attention of the Board to p. 3 of the memo. Staff recommends that the District be required to pay the outside City rates. It continues by saying: "The outside City rate will be within pennies of existing District rates for most customers. Mobile home parks will pay sub- stantially lower rates. The two schools and one commercial account would have their rates nearly doubled." Poudre R-1 may object to this, Mr. Caulfield suggested. That, I guess defines the practical question of what consequence there is for one rate or the other," he added. Tim Dow pointed out that the memo says that if we force the annexation issue, they probably won't go along with dissolving the District and joining us. "Do we want to encourage them to do that or don't we really care?" Mr. Caulfield also indicated that the area is clearly in the Urban Growth Area of the City. Ms. Burger clarified that there is some outside the UGA, but it is mostly inside. Rich Shannon cited a couple of issues: 1) A fairly high item on the City's list is helping small districts like this dissolve. 2) The annexation issue, in his opinion, becomes a distant second "when we are looking at annexing primarily residential area that may eventually become surrounded." When we look at planning issues, the City gets concerned about annexations, when it is primarily undeveloped land that is going to influence the character of Fort Collins in the future. "I don't see that particular little enclave of housing area influencing the character of the community. Therefore, the dis- solution of the District and setting precedent for doing it is a much higher issue than any of the annexation issues," he emphasized. Mr. Eckman doesn't recall the City ever enforcing one of the annexation pledges anyway. Mr. Caulfield also directed attention to the point made in the memo that the City would be required to process a substantial number of separate agreements making it an administrative burden. It would not involve a master agreement, he said. Chairman Caulfield reiterated that staff's point of view as expressed in the memo is that the City forego the annexation question but charge out -of -City rates. Ms. Burger said that one of the difficulties is that "we know the Laporte Sanitation District will be ready to dissolve within the next year or so, and if you make an exception on out -of -City rates here, how do you justify not giving in -City rates to Laporte?" Tom Moore moved that the Water Board approve the Mountain View Sanitation Dissolution agreement according to staff recommendations, and that existing customers be defined as those who have paid property taxes for the purpose of paying off the bond. After a second by Ray Herrmann, the Board voted unani- mously to approve the motion. Water Board Mines • March 24, 1989 Page 9 Gravel Ponds Proposal According to a staff memo that was distributed at the meeting, Craig Harrison presented a proposal to the Water Board at the December 16, 1988 meeting, to buy some land and gravel ponds along the Poudre River between Shields St. and Overland Trail. (The site was indicated on a map attached to the memo.). On Jan. 13, several Water Board members and Water Utility staff toured the site. Other City staff have also toured the site during the last couple of months. The acquisition, development and use of the area would be a joint effort between the Water Utility and Parks and Recreation. Mike Smith explained that this is a revised proposal from the one presented to the Board on Dec. 16. Currently, we are only looking at ponds 1, 2, and 5 and the water rights indicated earlier, as well as some other smaller parcels of property in those areas. Ponds 3 and 6 have been removed from the pro- posal. Mr. Smith remarked that this proposal has been somewhat difficult to evaluate for staff in the time frame allowed. "It has some potential but we are not sure what the full development costs will be to line the ponds and make them useful, or even determine if they need to be lined," he said. However, there is some opportunity here that the City may want to take advantage of. Staff's dilemma is "how do we make a decision quickly without allowing the opportu- nity to slip away from us?" Let's say that we agree to the proposal, and Parks and Recreation contributes their $100,000, and we buy the water rights and the ponds. If at some time in the future we determine that the project isn't feasible, Parks and Recreation would buy our part from us. In that event, it would all become open space. "They agreed to that?" Neil Grigg asked. "That's the proposal," Mr. Smith replied. Henry Caulfield wanted to know where the Parks and Rec. Board is on this proposal. Mr. Smith replied that the director of Cultural, Library and Recre- ational Services has spoken to the Board and Mr. Smith understands that there was a positive response. Rich Shannon commented that the P&R staff is probably leading this issue more than the water staff. "They are very keen on the open space," he said. "Moreover, the planning staff and the city management see it fitting in very nicely with other City objectives." On the other hand, in terms of a water resource, "our reaction has been somewhere between average and good," he admitted. Mr. Caulfield asked where the $100,000 from P&R is coming from. Mr. Shannon replied that they have $100,000 in lottery funds that they use for open space acquisitions. However, they probably do not have $300,000 which they would need if the Water Utility does not participate, he said. The Parks Board would have to revisit the subject to see if they are willing to accept the liability of the additional $200,000 in that event. "For several years," Mr. Caulfield remarked, "we have talked about the Poudre River having recreational use by instream flows, etc." He had a question about pond No. 1 specifically. Are we paying to supplement the stream flow? "Our interest is in Pond No. 1," Mr. Smith responded, "probably only Pond 1 Water Board Minutes March 24, 1989 Page 10 because it is the largest one. What we use it for is yet to be determined. We could use it for a water supply reservoir; we could put excess water in there from Larimer No. 2; we could exchange those waters for others; or those waters, theoretically, could be released to the stream at a time when the River was very low." At this time are we saying that all of those costs should be borne by the Utility, Mr. Caulfield asked as a matter of clarification. He went on to say that River recreation would be incidental to what this is all about. Does augmenting the flow have some bearing on the wastewater treatment plants? Mr. Smith responded that in the current wastewater treatment study, one of the objectives is to better define the advantages and benefits of putting more water in the River with regard to waste treatment. "We hope that we will have an answer to that soon," he concluded. Ray Herrmann asked the value of 20 shares of Arthur Ditch. "About b50,000," Dennis Bode replied. So we are looking at about $60,000 worth of Water rights, Mr. Herrmann stated. Mr. Caulfield determined from the memo that the Utility wants to conduct some studies before this is concluded. "I assume Mr. Harrison doesn't want to sit around and wait." The contractual arrangement is based on Water Board action on this date, and Council action on May 2, Mr. Smith answered. You are asking us to make a commitment now? "That's right," Mr. Smith replied. Ray Herrmann moved that the Water Board recommend approval of the proposal if Parks and Recreation will assume the additional liability. Neil Grigg sec- onded the motion. In Tom Moore's opinion this appears to be primarily a Parks and Rec. situa- tion. "We're spending money for water rights when we could buy a lot of good CBT water for the same amount of money," he asserted. "I want to see a date and a time when we get our $200,000 back if we decide not to pursue this," he insisted. Mark Casey said he shares many of the same concerns that Tom Moore has. "It seems as though it should be a Parks & Rec. deal or a water deal. If it stands alone as a Parks & Rec. project and we have the benefit of some water rights to go with it, that's one thing, but I think we need to be careful about possibly leading P&R down the Primrose path with the idea that this is a water deal," he stressed. Dave Stewart asked what the realization is of holding that reservoir down in the middle of the summer if Parks has control over it also. "If they have control of it, I don't think they would like us tampering with it," Mr. Smith admitted. If it's our reservoir the ground rules are it is for water supply purposes and it would be our right to fill it in the spring and empty it in the summer or fall. However, he doesn't think you could combine the two by having Parks pay for it and we use it. Mr. Stewart contends that once that reservoir becomes a part of park land it is going to remain full no matter what the flow is. 0 • Water Board Minutes March 24, 1989 Page it Neil Grigg remarked that he basically agrees with what has been said in terms of the business aspects. One of the things he has noticed in this kind of planning is that it is tough to do multi -purpose planning among units of City government "and that's what we are dealing with here." In other words, it is a way of getting something good for the City by working together. "What I'm saying is maybe we ought to go the extra mile," he suggested, "and if it turns out that the Water Utility invests in a facility and it wasn't just for the Water Utility, I'm not so sure that's all bad." Chester Watson brought the Board's attention to the last sentence on p. 2 of the memo which states: "The gravel operation is presently operated under a permit from the Colorado Mined Land Reclamation Board and any requirements still remaining after the City purchased the land would be an obligation of the seller." "I've done several projects for coal mines," he related, "and whoever owns the land is the one who must reclaim it, and that can be very expensive. Is this any different?" If we buy the land I'd be very careful to have someone who knows what he is doing look at it," he advised. Mr. Smith acknowledged that the staff is also concerned about that. Mr. Caulfield brought up another point to consider. The statement is made in the memo that this proposal has utility for water exchange purposes. How real is this? "There is very good potential that we could store excess Lar- imer No. 2 waters in that reservoir," Mr. Smith explained. "Larimer No. 2 isn't very far away and the flow comes in a very short time period. Then we could get the water out of the reservoir and exchange it with Larimer-Weld or anyone else downstream," he conjectured. Are we able to better utilize the rights we already own if we participate in this proposal? "I think there is no question that you can enhance the value of what you have," Mr. Smith said. "Of course, you are going to have to pay for it too," he added. "How strong is staff on this aspect of the proposal?" "It's an opportunity, but I wish we had the answers for you; for example, development costs and how to get the water in and out and what that's going to cost," Mr. Smith replied. He went on to say that it will either work or it won't, or it will be too expensive. The Utility will be hiring a consultant to evaluate the costs, etc. This could take a year or two. At the conclusion of the study, staff will evaluate it. If the answer to the proposal is no, we will turn it over to P&R; if it's yes we will proceed with the plans, he concluded. Mr. Caulfield reiterated the thrust of the motion. The Utility accepts the proposal as stated except that the financial burden of the whole project goes to P&R, excluding the water rights, if the Utility finds, through further investigation, that this is not practical from the Water Utility point of view. Paul Eckman asked if the motion should also include the previously stated possibility of the City's potential liability for reclamation of the mined land. Water Board Minutes March 24, 1989 Page 12 Mr. Herrmann assumed that would be looked at as the project is evaluated "and if it isn't, it should be," he stressed. Mr. Eckman said the problem is we don't know how much it will cost to reclaim the land in order to include a clause placing that responsibility on the cur- rent owners. "In the past these companies have received some tax benefits by making gifts of the land to the City or via the Fort Collins foundation," Mr. Caulfield began, "and you might be able to sweeten this up a bit through that, particularly through the recreation angle." Tom Moore proposed making an offer to buy an option on it for two years for $20,000. Rich Shannon said if it were just a water issue that would be the Utility's preference." "We would rather do the studies and make sure it makes sense from a water standpoint." At this point, others don't appear to be interested. "The piece that's driving it from a recreation standpoint, is the trail system, rather than the value of having the land and the ponds next to the River," he explained. "The 35 ft. easement that is there provides the City administration an option to the railroad right-of-way that has become so controversial a part of the trail system they wish to complete." Mr. Caulfield asked if staff was comfortable with the content of the motion. It was determined that a time limit of not longer than two years to resolve the storage capability should be added to the motion. Mark Casey asked how long the study would take. Mr. Smith replied that it would take only a few months once it is started. The two year time limit may be too long, he said but we want to give staff adequate time to pursue all the details. Mr. Smith believes the main issues are: Will the pond hold water? If it won't hold water, how fast will it leak? If it leaks too fast, do we have to line the pond and how much will the lining cost? If it gets down to the last level and it is determined that it must be lined, it will get to the point of being too expensive. "At that point, we may reject the idea," he said. Mr. Herrmann, who made the motion and Dr. Grigg, the second had no objections to the amendments to the original motion. Following is the final motion with amendments: The Water Board recommends approval of the Gravel Ponds Proposal with the following provisions: That Parks and Recreation will assume the $200,000 additional liability, except for the water rights, if the Utility finds through further investigation that storage capability of Pond No. 1 is not feasible from the Utility point of view; that a provision be included that requires the current owner to be responsible for the costs to restore the mined land; and that there be a time limit of not longer than two years to resolve the storage capability issue. The secretary polled the Board with the following results: Henry Caulfield, Ray Herrmann, Neil Grigg, Marylou Smith, Dave Stewart, Tom Moore, and Terry Podmore voted yes. Tim Dow, Chester Watson and Mark Casey voted no for reasons stated previously. The motion passed Water Board Minutes March 24, 1989 Page 13 on a 7 to 3 vote. Staff Reports Halligan Reservoir Update In the interest of time, Mike Smith asked Board members to pick up their copies of the Halligan report at the end of the meeting. The Board will discuss the report at a future meeting. Arrangements will be made for the Engineering Committee to review the report prior to that meeting. Mr. Caulfield added that he would like the Engineering Committee to address par- ticularly the hydrology related to the project. "Mr. Farr from Greeley suggested that there is not enough water to make this a good proposition," he said. Committee Reports Legislative Committee Chairman Tim Dow drew the Board's attention to a legislative summary that Linda Burger had prepared. Before she began her report, Linda Burger corrected an error on p. 6 under HB 1319. Under position it states that the Utility opposed the bill when "actually we just monitored it and it died of its own volition," she said. Ms. Burger reported that basically all the bills staff has been dealing with have been disposed of one way or the other with the exception of SB 181. That bill began with the intention of transferring the Water Quality Control Commission from the Department of Health to the Dept. of Natural Resources. That idea was dropped and instead a series of rules was proposed to try to help the Commission in making decisions when water quality and water rights come in conflict. Through the process, some other issues have been attached to this bill which had a very broad title. Mr. Caulfield pointed out HB 1112, Irwin's Cooperative Agreements Water Resources Bill, which "authorizes political subdivisions of the state to enter into cooperative agreements for the lease or exchange of water or the construction or use of waterworks within or outside of their boundaries in order to enable the use of water by or within another political subdivision. It also provides for the adjustment of disputes involving such agreements." Amendments: Authorizes water conservancy districts and water conservation districts which own or hold rights to water to enter into cooperative agree- ments with other political subdivisions to lease or exchange water outside of the boundaries of the conservation or conservancy district. Position of staff: Support as amended (This will allow the Northern Colorado Water Conservancy District to lease Windy Gap water to Denver.) Mr. Caulfield stated that as he reads this, even with the amendments, the Northern District could lease CBT water as well as Windy Gap water to Denver. Ms. Burger responded, "theoretically that's true." However, the bill requires that any leasing of water has to go through the normal water court processes. In other words, an exchange or change of use would have to go through the water court before a lease agreement could be carried out. "Our opportunity if there were to be some impact on use, would be to address it in water Water Board Minutes March 24, 1989 Page 14 court," she said. In addition, of course, the Board of the District would have to approve the lease of CBT water, and there are some federal restric- tions on that as well. "I'm not saying we should raise a fuss about it, at this point," Mr. Caul- field emphasized. He is merely trying to have the Board focus on the fact that this is adding real authority to the District in this respect and even though the inhibitions which Ms. Burger cited exist, this is an addition to legal authority on the part of the District. "To the extent that this legal authority appears to have substance, the price of water in the northern area will start to go up," he contends. "The District continues to insist, that the bill is only for the purpose of allowing communities with Windy Gap water to be able to lease it," Ms. Burger related. "That isn't what it says," Mr. Caulfield asserted. "I'm surprised we are supporting it at all," Tom Moore argued. "Why are we sup- porting it?" "The reason we are supporting it, Ms. Burger continued, "is there is already considerable concern on the part of the cities in Northern Colorado that Fort Collins is buying up CBT water at low prices and they are unable to because their money is invested in Windy Gap water." Furthermore, they want to be able to do something with their WG rights. The only solution they have come up with is leasing that water to the metro area. "Why couldn't it have been restricted to Windy Gap," Mr. Caulfield wanted to know. "There just didn't seem a way to do that," Ms. Burger replied. "We consulted with our attorneys and came up with the best deal that we could get through." She added that Fort Collins didn't think they should take the posi- tion that other cities not be allowed to lease their Windy Gap rights. "I'm not arguing Windy Gap," Mr. Caulfield insisted. "What concerns me is CBT." "What really concerns me," Mr. Moore began, "is that we will lease the water to Denver and it will derive enough money to build Grey Mountain Reservoir in our backyard. We will live with the thing, and never get a drop of water out of it," he contends. "Except that we own the land at the bottom of the reservoir," Mr. Caulfield pointed out. "But, I agree with you," he added. Mr. Caulfield said that in bringing this up, he was trying to draw the atten- tion of the Board to what we are facing. Linda Burger also explained that the original version was much broader, and had more implications to the kinds of things that have been stated as con- cerns here today. "We were responsible for the amendments that were added to the bill," she added. Dave Stewart pointed out that if we oppose the District here we will be a thorn in their side and "from what I know of the District, they have a good memory. This is a small fight in the large battle. Maybe we should give in a little here and be prepared, if Grey Mountain goes, to get what we need from it." Mr. Caulfield said he agrees with Dave Stewart's approach to the bill. • Water Board Minutes March 24, 1989 Page 15 Mr. Caulfield announced that on May 4 he and Mike Smith, and anyone else who wants to come, are going to have a meeting with the District on the Utility's plan to acquire additional CBT water in accordance with the City's new Water Supply Policy. The District thinks it is a deviation from their policy. Mr. Smith believes that the City meets the policy, "but the District has some concerns, so they would like to talk about our water policy and why we are doing it." he explained. Mr. Stewart asked what the current limitations are for CBT. "Can it go out of the District without a federal change? Mr. Caulfield answered no. They say until the pay out occurs in 2003, that the federal document says it can't go out of the boundaries as far as the federal government is concerned. This bill would authorize the state government to go ahead with exports out of the District after that time. Mr. Caulfield concluded that unless anyone wishes to suggest otherwise, that the Board allow the staff's support of the bill to stand for the reasons that have been discussed. Mark Casey said that there is a lot of distinction made between a sale and lease, and in reality can't you get nearly all the benefits of ownership through a 99 year lease? Is the distinction worth making? "I agree with you, Paul Eckman responded, "a lease can be many times more valuable than the own- ership depending on the term of the lease. I don't see that there would be much difference between the two." Ms. Burger pointed out that there was concern that once someone starts using water under a lease, do they begin to establish a right to that water? There was an amendment added which would restrict the use of the water to the period of the lease to make it clear that there is not an implied right to the water. "Say this passes," Mr. Caulfield began, "and Two Forks is not approved, then the sale to Denver, so they would have an equitable interest, may become the next bill before the legislature." Water Conservation and Public Education Committee Chairman Marylou Smith reported that her committee will be meeting in two months to perform a written evaluation of the current staff water conserva- tion program. Molly Nortier, Water Conservation Officer, provided a document to the committee outlining all of the aspects of the program that the commit- tee will be looking at. Engineering Committee Chairman Dave Stewart reported that the Engineering Committee met with Tom Gallier, Wastewater Treatment Manager, two weeks ago on sludge options. Mr. Gallier is currently investigating some additional options. Other Business Mike Smith said he had a request from Council members for the Water Board to make a recommendation regarding the timing of acquiring additional water. After a brief discussion regarding the need to purchase water quickly while prices were still relatively low, Neil Grigg moved that the Water Board Water Board Minutes March 24, 1989 Page 16 officially recommend to Council that the City proceed expediently with regard to water acquisitions. After Ray Herrmann's second, the Board voted unanimously in favor of the motion. Mr. Smith explained that the additional water would be purchased from the proceeds of a general obligations water bond issue that is scheduled for City Council consideration on April 4th. He distributed a hand-out that showed projected revenues, expenses, debt service payments and several ratios that are used to evaluate the desirability of bonds from a purchaser's view- point. The projections show the Utility to be in sound financial shape and the City's financial advisors are optimistic that the bonds can be sold at an attractive rate. The bonds will be for $11.5 million with $6.5 million going towards water purchases. President Caulfield called for an executive session to discuss water acquisi- tion matters. Since there was no further business, the meeting was adjourned at 5:15 p.m. Water Boar Secretary