HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 05/06/1999 - SECOND READING OF ORDINANCE NO. 52, 1999, APPROPRI AGENDA ITEM SUMMARY ITEM NUMBER: 11
DATE: May 4, 1999
FORT COLLINS CITY COUNCIL STAFF: Dennis Bode/
Tom Shoemaker
SUBJECT:
Second Reading of Ordinance No. 52, 1999,Appropriating Prior Year Reserves in the Water Fund
for the Purchase of Water Rights and Water Storage Capacity.
RECOMMENDATION:
The Water Board, Natural Resources Advisory Board and staff recommend adoption of the
Ordinance on Second Reading.
EXECUTIVE SUMMARY:
Utilities staff and Natural Resources Department staff have been negotiating with H.W.Rogers and
Associates for the possible acquisition of land,several gravel pits,and water rights along the Poudre
River between Shields Street and Overland Trail. Ordinance No. 52, 1999,which was unanimously
adopted on First Reading on April 20, 1999, appropriates funds from the Water Fund in order to
have sufficient appropriations to make a firm offer for the purchase.
I AGENDA ITEM SUMMARY ITEM NUMBER: 16
DATE: April 20, 1999
FORT COLLINS CITY COUNCIL STAFF: Dennis Bode/
Tom Shoemaker
SUBJECT:
First Reading of Ordinance No. 52, 1999,Appropriating Prior Year Reserves in the Water Fund for
the Purchase of Water Rights and Water Storage Capacity.
RECOMMENDATION:
The Water Board, Natural ResiourrcesAdvisor"' Board and s4aff recommend adoption of the
Ordinance on First Reading.
FINANCIAL IMPACT:
The cost of purchasing this land, gravel pits, and associated water rights is estimated to be
$1,083,000. Of this, $637,000 would be appropriated from prior year reserves in the Water Fund.
The remaining $446,000 woul .d6mmelfrorr eXisttingfappropiafations"in the Natural Areas budget.
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EXECUTIVE SUMMARY:
Utilities staff and Natural Resources Department staff have been negotiating with H.W. Rogers and
Associates for the possible acquisition of land,several gravel pits,and water rights along the Poudre
River between Shields Street and-Overland-Trail. 1P arch the°develo ment and use of the area
would be a joint effort by Utili ses and d.04a Resource gartment The gravel pits would be
developed into local storage ponds toh( g e l e City's raw water supplies. The land would
also serve as open space or natural areas-along the--river. Ae purpose of the Ordinance is to
appropriate funds from the Water Fund in order to have sufficient appropriations to make a firm offer
for the purchase. The actual purchase is subject to a first right of refusal by a third party.
BACKGROUND:
The Proposal
This item regards the potential purchase of land,gravel pits,and water rights along the Poudre River
between Overland Trail and Shields Street. The property(see attached map)that may be purchased
includes:
DATE: April 20, 1999 2 ITEM NUMBER: 16
1. Approximately 220 acres of land in the Poudre River corridor.
2. Approximately 1,800 acre feet of water storage capacity.
3. Water rights in the John Brown Ditch.
4. Up to 26 shares in the Arthur Irrigation Company.
The offer being made to the present owners would cost the City$757,000. This cost would be split
between Utilities and the Natural Resources Department as follows:
Utilities Natural Resources
Land and storage capacity $361,000 $361,000
John Brown Water Rights $ 35,000ft
. `$
Total 2i $3 6,000 l A $3 1,000
Lafarge Corporation(formerly Western Mobile)holds a first right of refusal for this property. Once
the City makes a formal offer to the present owners, Lafarge will have 30 days to match the offer.
After this option period, whether the City will actually be able to purchase the Property will be
known. If the Property is purchased by the City,Lafarge will have the right to continue to mine the
Property under existing mining leases until November 2003,and will continue to pay royalties under
the leases to the current owner.
Use of the Property v T" ,-
The land and gravel pits were initially co' iderecuoracqutsitio y the City about ten years ago but
ed�•Utilihas' mteres to the purchase is primarily for the
an acceptable agreement was never finaliz
use of the gravel pits to create some regulating storage capacity upon completion of the mining. The
most likely sources of water to fill the ponds would be from City-owned water rights in the Arthur,
New Mercer, and Latimer County No. 2 irrigation systems. Other water, such as from the City's
Michigan Ditch or Joe Wright Reservoir, could also be stored in the ponds. There are several
potential ways the Utility could use the water in the ponds. Water could be released to the river for
exchange of Colorado-Big Thompson(CBT)water in Horsetooth Reservoir or for exchange ofwater
diverted upstream at the City's pipeline. Water could also be released to the river to meet return flow
obligations or augmentation re ' ents a Ci
The Natural Resources Dep ent is in ested u yl� dspa(long the Poudre River for open
space and/or natural areas. An theruse or a eensioudre Trail to the west toward
Overland Trail.
Acquisition Costs
If the City is able to purchase this property,it may also want to purchase two small parcels that are
adjacent to the property and up to 26 shares in the Arthur Irrigation Company. The gravel pits and
ponds presently extend into these two small areas. It is estimated that it could cost an additional
$170,000 to purchase these parcels and for miscellaneous legal and appraisal fees.Utilities and the
Natural Resources Department anticipate that this cost would be shared half and half. In addition,
the Utilities'cost in purchasing shares in the Arthur Irrigation Company is estimated to be$156,000.
DATE: April20, 1999 3 ITEM NUMBER: 16
Combining the initial purchase cost of$757,000 with the purchase of the additional two parcels
($170,000), and the Arthur Irrigation Company shares ($156,000),the total cost is estimated to be
$1,083,000. The Utilities share of this is $637,000. In order to proceed with a firm offer to the
present owners,the Utilities need additional appropriations to complete its portion of the transaction.
These funds will remain in the Water Fund reserves if the transaction is unable to be completed. As
mentioned above, the Natural Resources Department's share is estimated to be $446,000 which
amount has been previously appropriated.
Development of Site
If the site is acquired by the City,Utilities and'the Natural=Resources'Department will work together
to develop the site to meet the needs ofthe City. lre., tilities"`primary purpose would be to develop
some regulation storage capacity to more fullyputilize the City's water rights. By having some
capacity at this location, it is aniieipated that=the firin yield uIfthe City's supplies to meet treated
water demands will increase by the approximate active storage capacity of the ponds. Because of
this, the site becomes very valuable and attractive to the Utilities.
There will be additional costs to develop the site for use as operating storage ponds. If acquired,
additional analyses will be conducted to determine the best way to convert it over to a useful storage
reservoir and also meet the needs of the Natural Resources Department. Itis estimated that the cost
of developing it for a regulating storage reservoir will be about$1,000 per acre foot of capacity.
Review by Boards
The Natural Resources Advisory Board and theVater Board discussed this proposal on March 17
and March 25, respectively. Both Boards support the purchase of this property to meet the needs
of the City and recommend that the City Council approve measures necessary to pursue the purchase
of this property.
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