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HomeMy WebLinkAboutWater Board - Minutes - 11/16/19840 Minutes Water Board November 16, 1984 Members Present: Norm Evans, Henry Caulfield, Ray Glabach, Mary Lou Smith, Neil Grigg, Morton Bittinger, John Scott (alt.) Staff Present: Bill Carnahan, Andrew Pineda, Liaison) Mike Smith, Dennis Bode, Curt Miller, Mayor Gerry Horak (Council/Water Board Members Absent: Bernie Cain, Tom Moore, Tom Sanders, Jim O'Brien (alt.) Chairman Norm Evans opened the meeting. The following items were discussed: Minutes Because some members of the Board had not received copies of the minutes, approval of the minutes for October 19 was deferred until the December meeting. Southside Ditch Agreement A 1977 agreement was sent to Board Members along with a table and a map. Dennis Bode explained that the main purpose of bringing this item before the Board was to bring everyone up to date on what is happening with the Southside Ditches and where we stand with the number of shares owned by the City; and review the yields as they relate to the Ditch Consolidation Study. Mr. Bode refers to Southside ditches as the four ditches that take off from a southerly direction from the Poudre River and travel through Fort Collins. The four ditches are PV&L, New Mercer, Larimer No. 2 and Arthur. In the 70's, part of the ditch stock that was owned by the City was transferred to North Poudre Irrigation Co. in exchange for the Joe Wright Reservoir and Michigan Ditch rights. When this was attempted under the original provision, the Ditch Companies objected. At one time there was a moratorium on the City accepting stock from those ditch companies. The moratorium was unacceptable because the owners of the Southside Ditch Companies felt that they needed to continue to have the right to turn in that stock to the City since there was a value associated with those rights. Also, as the City grew over this irrigated land, many who owned those rights were not able to do anything with them except turn them over to the City. In 1977 an agreement was finally reached which spelled out a number of provisions regarding the stock in the Southside ditches. This agreement was with the City, New Mercer, Larimer No. 2 and Arthur. Pleasant Valley and Lake is a separate situation. The City has entered into an agreement with that company and has a decree from the courts that gives the City the flexibility to use the water at a number of places along the river. The City has the legal right already in the case of PV&L water to take the water at alternate points of diversion including at Water Treatment Plant No. 1 and Monroe Canal, Joe Wright Reservoir and several other • places. The other three ditch companies will be the main topic for today's discussion. The 1977 agreement provided that a number of the shares that the City owned would be transferred to North Poudre to complete the exchange that North Poudre Irrigation Company made with the City regarding Joe Wright Reservoir and the Michigan Ditch system. The agreement also provided that when that transfer was made, 15% of the shares would be left in the ditch company, 15% of the shares that were transferred or a quantity equal to 15% of the number that was transferred would be kept by the City and left in the Ditch Companies without the City using them. This was to compensate them for the amount of shrink, etc. that would occur because of the transfer out of the system. Another part of the agreement specified that the City would give the stockholders of those three companies a preferred right to rent water from the City. It identified the conversion factors; in other words the yields per share that the City would accept from owners of the stock of those companies. Essentially, the agreement related that once the City owns over 25% of the stock of those companies, the parties would renegotiate a new agreement. These were basically the provisions of the 1977 agreement. Mr. Bode explained the table that was distributed to the Board with the agreement. The table gives a quick look at how many shares of stock the City owns in the different ditch companies. Currently, the City owns about 18% of the Arthur stock, 30% of Larimer No. 2 stock and 18% of the New Mercer stock. The City owns about 58% of the PV&L stock. For purposes of the agreement, the shares that we transferred to North Poudre are included to figure out what total percentage we own in combination with North Poudre. Combined, the City and North Poudre now own over 25% of each of the three companies. Another part of the table showed the conversion factors for the raw water requirements. These are the numbers that are used when a developer owns some of the stock from one of those companies and they turn it over to the City. The staff calculates how many acre feet are required for that piece of land and uses the conversion factor to determine how many shares are needed. The last two lines of the table showed a rough estimate of the yield from each ditch company. Looking at the three companies, the average annual yield is approximately 3500 acre feet. Based on a dry year situation, it is probably closer to about 2,000 acre feet. That really doesn't say too much about whether the City can use that water. Conditions would have to be right to either take that water directly somewhere or to work out an exchange where we would get that water in Horsetooth Reservoir for example. In a dry year, we could probably get most of that if we had the legal right to take it elsewhere, because the potential to exchange is probably there in a dry year. In a wet year, it may be difficult to exchange it because everyone usually has an adequate supply, thus they receive no benefit from exchanging with the City. The yield from New Mercer, Aurthur and Larimer No. 2 isn't that great. The big yield comes from PV&L water for which we already have the decree and arrangements stipulated. Another point of interest is what has occurred with the ditch consolidation study which involved all the Southside Ditches. The main emphasis of the study was to look at the storm drainage benefits of consolidating two of the ditches. The best alternative was to combine the New Mercer and Larimer No. 2 irrigation flows in one ditch and use the other ditch primarily for storm drainage. There were a number of recommendations that were made about a year ago. Some draft agreements were actually drawn up at that time. They stipulated a number of provisions regarding maintenance transfers, conversion factors and preferred rentals, etc. The benefits of using them for storm drainage were not so great that they were accepted with a lot of enthusiasm. 2 There were several points about the agreement which were difficult. The whole issue has been on hold with no one eager to resume talks. Mr. Bode concluded that there was some valuable data that was produced from the study that may be useful when we enter into an agreement with the companies. In fact, the draft agreement that was drawn up at that time stipulated that many of the provisions in the agreement could be used without getting into the consolidation part of it; things like the conversion factors and how we would do the transfers from the ditch companies to another point of diversion. Mr. Bode said that the main question was where do we go from here with the Southside Ditch Companies? He thinks that because of the yields involved and the difficulty with exchanging right now, that there is probably nothing urgent in making provisions to use that water. However, we need to be working toward a new agreement with the ditch companies that spells out all of these things, and it is hoped that will pave the way for a decree where we can get the changes in alternate points of diversion, changes in use, and whatever else we need in decree to use that water. Before we can make effective use of the water, demands probably need to be higher in the City. Also, another treatment plant where we could take more water on the Poudre would be helpful in using that water. Norm Evans asked if the ditch companies are ready to discuss a revision of the agreements. Mr. Bode has not discussed this with anyone from the ditch companies for the last several months so he isn't certain what the attitude is. Henry Caulfield contends that, in principle, he would like to see something accomplished with the ditch companies because we have these rights but they are not usable. Two points that Mr. Caulfield wanted clarifed were: 1) What is the current position of the Storm Drainage Board and the City with respect to the urgency of doing something regarding storm drainage? 2) If you deal with the ditch companies separately on the water rights question from the consolidation question, you may be losing bargaining positions if there are separate negotiations. Might it be better to combine it as a package? Mr. Bode said that the Storm Drainage Board was struggling with the benefits of the consolidation. Two issues; the maintenance from Vine Drive to the river which the ditch companies felt the City should assume, and some liability questions were of concern. Assistant City Attorney Paul Eckman added that as he recalled, the ditch companies had included enough provisions in the agreement to their benefit that it wasn't very attractive to the City, because the City had to assume a great deal of maintenance and liability responsiblity. There wasn't agreement on any other terms that the ditch companies would accept with regard to the water rights question, although that's to the benefit of the City. Mr. Eckman thinks the ditch companies might be interested in the City going through the court process of having decreed changes in the points of diversion and use. There is perhaps some concern on the part of the various ditch companies that without the City using that water, it might be abandoned; the ditch companies don't want to see that happen. Thus, the City needs to change the use as was done with the Pleasant Valley & Lake Canal. Jim Clark, the District Engineer, wrote a letter to all cities concerned and has, in effect, ordered them to take steps to get the decrees accomplished within a reasonable time through the court. Mr. Clark thinks that as cities acquire ditch company stock, they cannot properly use the ditch water until they get those decrees. He hopes to see some action among the various cities within a year. The City does expect some objections to this process. 3 Norm Evans commented further on the consolidation question. He said that the Drainage Board raised the desire to use one or more of the ditches for storm drainage. The ditch companies were assembled to consider it, and of course, they asked what was in it for them. They drove a fairly hard bargain in getting substantial benefits. Dr. Evans and the staff who participated were reasonably satisfied that the deal wasn't overly plush for the ditch companies. Dr. Evans was somewhat surprised that the Drainage Board decided that it wasn't that urgent to have a drainage way and backed off, on the grounds that the City was giving up too much to the ditch companies. Dennis Bode acknowledged that the Drainage Board realized that the actual benefits were not as great as the perceived benefits when the study was begun. Ray Glabach asked what the benefits to the City are to even be involved with these ditches. From the figures on the table, the yield amounts are relatively small per year; in water that we can't use directly. Why are we even accepting these rights anymore? Norm Evans said one answer is philosophical -- it is good to keep an harmonious relationship with the local water users; up and down the Poudre. The City has learned that, over the years, the hard way. As a result, the City does not experience the litigation from the water users the way it had in the past. We have established dialogue and we work out mutual arrangements that are reasonably neutral. The other answer is that the water is available to us, but we have said we will not hurry to go through the legal steps to get it. And the reason for that is: the irrigated land served by those ditches is gradually shrinking to the place where many ditches will have no reason to exist for the agricultural water users, at which time, it will be very easy to transfer the water out. In the meantime, the costs of leaving the water in the ditches is a concern, but the cost is not great. Ray Glabach noted that as the southern areas develop, the City will be acquiring more of this water. Norm Evans said that water is like any water we buy ahead of time; it's an investment in the future. Ray Glabach suggested that we transfer that investment to river rights or Horsetooth rights something that we could use directly? Henry Caulfield added that it has always bothered him that we can't use these rights other than for Parks & Recreation. Dennis Bode emphasized that quite a lot of water is used for that purpose. Mr. Caulfield continued that he does not want to overturn history as was started in the sixties. The question is, when is it timely to get the point of diversion changed, etc. so this will become usable water up in Horsetooth. It seems to Mr. Caulfield that the City ought to proceed with getting the same kind of agreement with these ditches as we have with PV&L. Paul Eckman reiterated that the City is required to do that anyway. Neil Grigg asked if the Arthur Ditch is close to becoming dry, what is happening to their rights at the river diversion point? Are they still diverting? Dennis Bode said in some cases they are not taking as much as they normally would and are passing more through the system than needs to be. Norm Evans made the point that if we remove our shares from the ditches it would be difficult for others to get their water to the points of use. Thus, we have shared in the transmission losses, but we felt that was a fair way to treat the ditch companies in order for them to be able to continue to use the ditches. Mr. Bode added that when you talk to the irrigation people, they feel strongly that the City is over -taking them and that they need to have a way of getting that value but; of course, many of then do from just the sale of their land. People who want to continue to irrigate want to make sure that the yield does not decrease when a portion is taken out. People who plan to 4 sell to a developer feel that they need to get a certain value out of those water rights. About the only market around is from the City because there are no other irrigators around where they can easily transfer that water. Thus it is, in a sense, an obligation that started 10 or 15 years ago. Another point that Mike Smith brought up in answer to Ray Glabach's comments was that if the water were abandoned, we would lose 5000 - 7000 ac-ft of water totally from the system. The way it is now, we keep what is here even though it is more difficult to use. Ray Glabach suggested that maybe the best long term solution is abandonment of these ditches. Someone stressed that this would mean abandonment of the water rights which would not be advantageous to the irrigators or the municipalities. Dennis Bode related that as the City's demands become higher, we will be using more of the water as the system grows. Henry Caulfield contends that the City needs to get a little "tough" by saying that "if that is the position you want to take, then by not doing anymore for us, we won't buy anymore rights." Neil Grigg proposed that in the master plan the City could look long range at a dual system for all irrigation of public property, schools, parks, etc. Perhaps we could use the ditches to transport this water where we could use it and also preserve a part of the area's history. Dennis Bode responded that the City has thought along those lines for future growth. In fact, with Moore Park and the new golf course, that is the source of the raw water. The City Attorney's office will keep us informed as to the progress of the negotiations. Report on Halligan Meeting Mike Smith said that he and Roger Krempel had a meeting with Carl Judson on November 6th. Mr. Judson still wants to pursue the options with North Poudre. He thinks that it is a private enterprise type project. North Poudre has not committed to work with them because they are waiting to hear from the State Recreation Department. Mr. Judson didn't invite the City to participate with them but he talked about possibly leasing some storage rights if he pursues the project. Mr. Krempel convinced Mr. Judson to have his attorney send the City something in the mail outlining what their expectations are for the project along with possibilities for the City. Until North Poudre hears something from the state, Mr. Judson's plans remain on hold. The staff distributed some newspaper articles relating to the controversy generated by the possibility of the state's purchasing Phantom Canyon, where Halligan is located, as park land. The major concern of the opponents is that the appraisal of the land is too high. Update on Rate & Drought Studies Dennis Bode reminded the Board that since the last Water Board meeting there was a joint Council and Water Board meeting on the rate study. All of the Board Members received the packet prepared for that meeting. On November 8th, a public workshop on the rate study was held in the Council Chambers. There was discussion pro and con on the different rate structures presented and on the question of meters. During the first week of December a final report on the rate study will be distributed to Board Members and City Council, with a work session tentatively scheduled for December 11 to review that report. The study would be completed shortly after that. Marylou Smith commented that the turnout for the public meeting was somewhat disappointing but was to be expected. She added that perhaps when people are not overly concerned about 5 the rates or appear to be satisfied with the status quo, they do not turn out in great numbers. Bill Carnahan cautioned that we should not be lulled into a false sense of security. Until there is a definite proposal where people can assess what the impact will be, your're probably not going to have much input until you have the debate going. It is difficult to get interest of people in any issue; the Council has seen that happen. He has a feeling that the rate issue is of more interest than the turnout would indicate. Ms. Smith went on to say that she thinks the timing of the rate study and the emphasis on conservation by the Council is unfortunate because of the Anheuser-Busch issue. The general public will not understand the nuances here, and will conclude that it is poor planning to conserve water and at the same time, welcome a brewery. Chairman Evans called the members' attention to a written response from Professor Ray Anderson of CSU, who attended the workshop. He was a former member of the Water Board. The staff will acknowledge the memo and inform Dr. Anderson that we will keep his points in mind as we finalize the rate study. Mr. Bode also brought the Board up to date on the drought study. The consultant has generated the flows from the Poudre River, looked at the imported water, developed correlations that we can use in assessing the yields, etc. Now we are at the stage of working on the models which will be done primarily in-house by staff with some review by the consultant. The next month or two the modeling will be done; then, we will be working with the consultant on the final report. Mayor Horak commented on Mary Lou Smith's points. He related that the Council has looked at this issue of water conservation and water rate for at least the last ten years, and held a hearing in 1981 at which Mr. Anderson gave a presentation very similar to what was in his letter. According to the Mayor, the timing is just getting enough support from the Council now to do something that should have been done years ago. He continued by saying that meters are not the issue here. They are only a mechanism to implement the rates. We need to emphasize that this is a water rates study not a metering issue -- meters being just a tool for measuring water used. There will be some problems, but he contends that most people will be logical. They pay for the amount of electricity they use; why not the amount of water they use? Ms. Smith said that she agreed but still doesn't think the general public will realize that this issue emerged at least 10 years ago and will not be aware of what has happened with the different Councils. They will see just "the tip of the iceberg." Ray Glabach commented that he thinks people will realize that the total amount of water revenue isn't going to go up because of meters except for whatever it costs to put in the metering system. An individual homeowner that is on a flat rate stands a chance of paying less as well as more, because the total revenue is going to stay the same. The balance will change. Ms. Smith said that the initial capital costs of installing meters is so expensive, many people perceive it as a metering issue. Mr. Carnahan said that the second thing you have to keep in mind regarding the arena of what is likely to be the political issues, given the long range plan for the Water Department with the construction program that is going on, is that there are increases in rates projected. Regardless of what the water rate study shows, when we talk about total revenues not being affected by 11 • whether or not there is metering or whatever kind of rate structure you have; in effect the revenues will be going up, but they would be going up for different reasons. The subtle difference is going to be hard to segregate. Henry Caulfield said that he doubted the timing will make much difference except that it will be a year or so following the Anheuser-Busch issue. If you look at other cities, they all have this problem when they plan to make this transition. There is a possibility that this issue may well go to a vote of the people, because the Council may find that it is wise they do so. Whenever you do it, it will be tough. Discussion of Appointment or Election of Northern Col District Board and All onservanry nitrirtr ater Conservanc Mayor Horak explained that the Conservancy District is the only entity he is aware of that taxes people directly on property taxes and does not have its board of directors elected. Mr. Horak wanted to make it clear that in no way is he disparaging any former or current members of the Board. A new member of the Board was recently appointed. Did anyone know there was a vacancy or was anyone able to give suggestions for the appointment or make comments on the appointment to the judge who makes that selection, and bases his selection on two criteria: 1) You must be a resident of the area; 2) you must pay property taxes. These are the only two reasons for the judge to make that selection. In the 1930's when these boards were created, it probably made a lot of sense to do it that way. Conservancy district staff was probably very small and you could appoint some experts in the area to fill the board positions. Things have changed, however, now staffs of the districts are extremely competent. Now the boards have turned into more policy making boards rather than technical boards. We as a City have had representatives on these boards, but certainly the urban representation on these boards is not related to populations or property taxes paid. It is not even necessarily related to water ownership. It is related to the discretion of the judge. It is an issue that has been growing in Colorado. Pitkin County has passed a resolution. Durango and other cities are encouraging the legislation which would change the way the current statutes read. Mayor Horak said that he brought this to the Water Board for their consideration, at least, of the issues. Perhaps in a month or two the Board can come back with some kind of recommendation for Council. The Mayor had asked Paul Eckman to contact the NCWCD so they would be aware that this was being discussed and they were asked to attend if they wished. They decided not to attend but they can provide for us any kind of information they would like. Henry Caulfield related that Colorado is the last state in the union that permits judge appointed boards of this kind. This came up in a water district case in Utah. He thinks that the courts finally decided that this was unconstitutional. Neil Grigg wanted to clarify if the Mayor's purpose for bringing the issue to the Water Board was so they can assess the advantages and disadvantages of different appointment or election routes and come forward with a statement to the Council. The Mayor responded that the Board could approach it as a water issue and they could interpret it however they wished to. They could choose to do nothing, or choose to make a statement. He does not wish to dictate how the issue should be looked at. Neil Grigg moved that the Board refer this to the Legislature and Finance Committee and have them come back with a report and recommendation at the next meeting. After a second from Mort Bittinger, the motion carried unanimously. 7 Henry Caulfield related that he had read in last night's Coloradoan that the NCWCD has drafted a proposal for a basin wide study of the Poudre for the Colorado Water & Power Authority. He wondered why the City and the Water Board had not been apprised of this. He asked if the Council or other City staff have been informed. The Mayor said the Council knew about the proposal because they had asked the District about what was happening when they heard that a study was being contemplated. Mike Smith said that staff made copies of the newspaper article for the Board. Basically, what the district is going to do is hold a public hearing from 2-4 p.m. on December 3 at the Holiday Inn and ask for public input. They are looking at making a proposal to the Colorado Water Resources and Power Development Authority to do a Poudre Basin Water Resource Management and Development study. Dave Stewart asked if we could get a copy of their proposal. Mike Smith said that we will try to do that. Norm Evans suggested that the Water Board participate in that hearing. Henry Caulfied moved that when some information is obtained about this study, that it be referred to the Engineering Committee and if it seems prudent, to have a special meeting of the Water Board. Bill Carnahan said that the Board, considering the short time frame, may want to consider asking the authority if they would be willing to accept written comments after the public hearing. That might allow time to study what they are proposing and also attend the hearing to ascertain what is going on and then submit written comments after that if the committee can't prepare before the hearing. This was added as a part of the engineering task. Dave Stewart provided a second to the motion. Neil Grigg being the Engineering Committee Chairman, related that because of the large number involved in the Engineering Committee and the short time frame, he would ask the staff to inform him of what is going on. Mr. Grigg will then decide what to do about a meeting of the Engineering Committee. Henry Caulfield made the point that Mike Smith could write to the Authority to ask about written comments regardless of the Engineering Committee's consideration of the matter. After some further discussion, the Board voted unanimously in favor of the motion. Mayor Horak offered an additional comment regarding the districts. He pointed out that in 1981 a piece of legislation was passed which allowed bonding by districts to go up to much higher limits than before without having elections. That was before there was any significant bonding. The district could go into debt and that debt could be required to be paid out of the mill levy. Staff Reports Treated Water Production Summary Dennis Bode said that during October the water production was down because of the cold weather and high precipitation. Henry Caulfield asked if the last recommendation of the Water Board to the Council with respect to the in -lieu -of water rate was acted upon by the Council. Mr. Bode said yes they have, and the in -lieu -of rate is now $1,000. 91 Other Business A question was raised about the Board meeting on the 21st since it falls so closely to Christmas. Since there was no specific directive from the Board, Neil Grigg suggested that the date remain on the calendar. The chairman can then assess if a meeting is needed and make a decision in December. Paul Eckman reminded the Board about the Windy Gap annexation issue on which the Council had asked for the Water Board's recommendations at last month's meeting. The issue was to be considered today, but Mr. Eckman has not received a response from the district's attorney. Mr. Eckman wants to have the written information to the Board before consideration is given to the issue. Mr. Eckman recommended that the Board consider this item at perhaps the first meeting in January. Norm Evans appointed John Scott as an additional member of the Legislative and Finance Committee. Dr. Evans also asked Mary Lou Smith to chair a committee to review the bylaws with Tom Moore as the other member. Dr. Evans asked if we have City membership in the Colorado Water Congress. Mr. Smith said we do. Norm Evans announced that he has learned of a meeting called the Colorado Water Convention to which they generally invite representation from various water entities including the cities. Mike Smith had heard nothing about this. Mayor Horak said it was announced in the CML publication as an open invitation to all the cities. It appears to be an open invitation process. The meeting will be held on November 30 and December 1. Norm Evans will represent the Water Board at the meeting in Denver. Any other Board members who wish to attend will also be welcome. Dr. Evans related that he recalls the Water Board put on hold, pending the completion of the drought study, (Henry Caulfield interjected also the A-B situation) any consideration for purchase of CBT water. He read recently of a surprisingly low price for CBT water. Mr. Smith said that nothing had occurred yet with A-B on water rights area, and the drought study is expected to be completed early next year. Dennis Bode explained that there isn't any question that CBT is an excellent source of water. The question is how much money we have available to do that and perhaps the timing of it as well. Henry Caulfield suggested that the City not pass up a good bargain here. Mike Smith said that staff will check out the price for the next meeting. Dave Stewart asked if, within the next couple of months, the Board could have an update on the Industrial Pretreatment Program. Mike Smith said that the EPA reviewed our program in September. The staff will inform the Board of these results at a future meeting. Norm Evans announced that there is encouraging progress in the talks that are going on between Greeley, Loveland, Fort Collins and the special service districts in the triangle area concerning the possibilities of cooperation in water supply management. It promises to be fruitful for all of us. Mike Smith and Norm Evans are attending those meetings. Another group called the South Platte Coalition is unfolding in an exciting way towards basin wide cooperation. It is currently composed of Irrigation Company Conservancy District representatives and they are now inviting the • municipalities to come along as observers at this point. Norm Evans has gone to meetings as an unofficial representative of the Water Board. Henry Caulfield asked for a report on Plant No. 1. Mike Smith advised the B with the local health department, we we 1. Larimer County Health Department wa supplies in Larimer County. They have perform these tests. He was asked to d suspected some problems. He found that water which are there all the time but water also. The first action was to cu increase the chlorine dosage. There we to the higher chlorine level,which came time, the system has been isolated so t Water Treatment Plant No. 2. A small p served from Plant 1. As of yesterday, treatment process and has shown real pr well. It has been tried on a plant sca Currently, no cysts are coming out of t surprised during the last test at how c through. It now looks like the problem on Water Plant 2 and didn't find a sign treated water. the bacterial problem at Water Treatment Dave Stewart asked for an update on the new Water Treatment Plant No. 2 design. Mr. Smith said that plant design has begun. A pre -design meeting was held with the consultants. They think that bids could be put out next summer and perhaps construction finished by the fall of 1986. Thus, if a problem occurred with Water Treatment Plant No. 1 again it could be shut down, and the whole city could be served from Plant No. 2. Since there was no further business, the meeting was adjourned at 5:07 p.m. Water Board'Secretary 10