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Home My WebLink AboutCOUNCIL - AGENDA ITEM - 03/24/2009 - RESOLUTION 2009-030 AUTHORIZING THE EXTENSION OF A ITEM NUMBER: 16 AGENDA ITEM SUMMARY DATE: March 24, 2009 FORT COLLINS CITY COUNCIL STAFF: Susan Smolnik SUBJECT Resolution 2009-030 Authorizing the Extension of a Lease of the City Ditch to Larimer County Canal No. 2 Irrigating Company Through April 12, 2010. RECOMMENDATION Staff recommends adoption of the Resolution. The Water Board discussed the extension of the lease at its February 23, 2009 meeting and unanimously voted to recommend a one year extension of the lease. EXECUTIVE SUMMARY This Resolution authorizes the extension of a lease to Larimer County Canal No. 2 Irrigating Company of the City Ditch. Although the original 1906 lease provided for an automatic renewal of the lease for an additional 99-year term at the Ditch Company's option, the Council's authorization at the time only authorized the lease for the initial 99 years. Pending resolution of this matter for the long term, an extension for an additional one year will allow the continued use of the City Ditch for irrigation flows on the same terms as have been in place for over 100 years and will avoid disruption of the right to run those irrigation flows in the City Ditch for the 2009 irrigation season. BACKGROUND The City Ditch was constructed in the 1880s and was used to convey water from the Poudre River to the old Water Works property at 2005 North Overland Trail Road. In the early 1900s, the City moved its Poudre River diversion upstream into the canyon and in 1906 leased the City Ditch to the Larimer County Canal No 2 Irrigating Company. The lease expired on April 13, 2005. Although the original lease provided for an automatic renewal of the lease for an additional 99-year term at the Irrigating Company's option, the Council's authorization at the time only authorized the lease for the initial 99 years. City Council approved extensions of the lease on March 15, 2005, April 4, 2006, and March 18, 2008. City staff is proposing that the lease be extended for one additional year in order to allow more time to get proper Council authorization for a longer-term lease extension or a permanent easement. The City currently owns approximately 65%of the shares in the Larimer County Canal No 2 Irrigating Company. The Company facilities convey water to Warren Lake to irrigate several March 24, 2009 -2- Item No. 16 City parks and the Collindale golf course. Extending the lease for an additional year will allow the continued use of the City Ditch for irrigation flows on the same terms as have been in place for over 100 years, and will avoid disruption of the right to run those irrigation flows in the City Ditch for the 2009 irrigation season. Staff recommends that the Lease of the City Ditch to Larimer County Canal No. 2 Irrigating Company be extended for one additional year. ATTACHMENTS 1. Water Board minutes, February 23, 2009. ATTACHMENTI DRAFT WATER BOARD MINUTES OF MEETING February 23,2009 Larimer No. 2 Ditch Lease Extension Ms. Smolnik asked the Board to recommend a one year extension on the lease of the City Ditch to Larimer County Canal No. 2 Irrigating Company. The ultimate goal is to eventually develop a permanent lease agreement or easement. When this arrangement is completed, it will be brought before the Board for review. This lease extension allows staff more time to work on the permanent arrangement. Questions from the Board: Who is responsible for completing the agreement? Staff is working on the agreement with assistance from the City attorney's office. The work has involved searching through documents dating back to the 1880's. The work is expected to be completed this year. Motion: Board Member Wockner motioned to recommend the lease of the City Ditch to Larimer County Canal No. 2 Irrigating Company be extended for one additional year. Board Member Connor seconded the motion. Discussion on the Motion: There was none. Vote on the Motion: It passed unanimously. RESOLUTION 2009-030 OF THE COUNCIL OF THE CITY OF FORT COLLINS AUTHORIZING THE EXTENSION OF A LEASE OF THE CITY DITCH TO LARIMER COUNTY CANAL NO. 2 IRRIGATING COMPANY THROUGH APRIL 12, 2010 WHEREAS, the City is the owner of property known as the Old Water Works property located at 2005 North Overland Trail Road, in Larimer County, Colorado; and WHEREAS,water to power the Old Water Works was originally conveyed to and across the Old Water Works property from the Cache La Poudre River through a ditch constructed by the City (the "City Ditch"); and WHEREAS, on April 5, 1906,the City Council adopted a resolution which authorized the lease of the City Ditch to Larimer County Canal No. 2 Irrigating Company(the"Ditch Company") for a period of 99 years,in exchange for construction of certain improvements and maintenance and repair of the City Ditch and related structures; and WHEREAS, on April 13, 1906, the City and the Ditch Company entered into a lease agreement providing for the lease of the City Ditch, in exchange for construction of certain improvements and maintenance and repair of the City Ditch and related structures,a copy of which is attached hereto as Exhibit "A" and incorporated herein by this reference (the "Lease"); and WHEREAS,the Lease states that the Ditch Company may,at its option,renew the Lease for an additional ninety-nine year period, but this option to renew had not been approved by the City Council in the resolution authorizing the Lease; and WHEREAS, the Lease expired on April 13, 2005; and WHEREAS, on March 15, 2005, the City Council approved Resolution 2005-023, authorizing a one-year extension of the Lease to the Ditch Company; and WHEREAS,on April 4,2006,the City Council approved Resolution 2006-039,authorizing an additional two-year extension of the Lease to the Ditch Company; and WHEREAS, on March 18, 2008, the City Council approved Resolution 2008-032, authorizing another one-year extension of the Lease to the Ditch Company; and WHEREAS, the Ditch Company has a continued need to use the City Ditch, particularly during the coming irrigation season, and there is substantial value to the City in avoiding the disruption of irrigation flows that would result if the City Ditch were not available to convey said flows; and WHEREAS,the Ditch Company has expressed an interest in discussing alternative types of arrangements for its use of the City Ditch, and another Lease extension would allow time for discussions regarding long-term arrangements between the City and the Ditch Company and for additional historical research by City staff regarding the historical conveyances related to the City Ditch; and WHEREAS, City staff is currently negotiating the terms of a proposed easement with the Ditch Company, and expects to return to the City Council for authorization of an easement to the Ditch Company prior to the expiration of the extension authorized by this Resolution; and WHEREAS, under Section 23-114 of the City Code, the City Council is authorized to approve by resolution the lease any and all interests in real property owned in the name of the City for a period of two years or less,provided that Council first finds that the lease is in the best interests of the City. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That the City Council hereby finds that extension of the Lease of the City Ditch to the Ditch Company for irrigation purposes through April 12, 2010, is in the best interests of the City of Fort Collins. Section 2. That the City Manager is hereby authorized to execute an agreement extending the Lease through April 12,2010,consistent with the terms of this Resolution,upon such terms and conditions as the City Manager, in consultation with the City Attorney, determines to be necessary and appropriate to protect the interests of the City. Passed and adopted at a regular meeting of the City Council held this 24th day of March, 2009. Mayor ATTEST: City Clerk IT"A" LEASE. ' IS I'v;:$Ni;IGE, ;a%de this '' day of April, A. D. 1906, betweon the City of Fort Collins, hereinafter designated as the City, )urty of the first hart, and The Larimer. Country Cane., Ito• -2.lrrX"ting �opitf¢ny a ves�t01"tt1oE;" hereinafter designated as the Company, part oj._t'he ssoead part, . .i_. It 'ITNFSSETH: That the said, City,_ for 'and in con- sideration of the sum of One Dollar, the recelpt of which is hereby acknowledged, and for the further consideration of the covenants and agreements hereinafter set forth to be kept and performed by said Company, its successors and assigns, has t leased and demised and does hereby leans and demise unto said Company, that certain ditch right of way known. ea the City Ditch, said ditch having its headgate on the south bank of the i i Cache.la Ev d�4 r¢� APal e� Po 'N2 thence.in a southeasterly dirsotion to the power plait b4tongSiig to the system of water works of said. City. _ '%M!FAV_z.AND TO :iOLH the above described premises, with the appurtenances, unto said Company, its successors and aseigns, _for the period of ninety-nine years from and after,the date of the ensealine of these presents, upon the i following conditions. �. First: That said Company will receive the said ditch in ihe_condition It is now in; that It wI.11 put it in 1; first class repair, and maintain it in first class condition for the uses and Purposes for which it is to be used, without charge or expense to said City. Second: That said Ccz*cAv will without unreasonable delay enlarge said ditch to.a capacity sufficient to carry j the water decreed to said Company, together.with the amount Vk , of water necessary to operate said power pia nt as the same has been heretofore operated. Third: That during the term of this lease .the dam and headgate belonging to said Bitch will be maintained and kept in good repair by said Company at its own expense.. Fourth: That said Company will construct and . maintain the necessary structures and provide all .the sufficient means for the proper diversion of t%o.ti<aters to, which the parties hereto are entitled at said power plant, so the the power rights now and heretofore enjoyed by said City will not at any, time be impaired; and thlt_at any and all times when said City or its grantees may desire to operate said Power plant, for any purpose whatever, said Company will pernit the water necessary ti.:erefor to be carried in said ditch and applied to said power plant without,coat, and without hindrance of any kind. Fifth: Said Company shall have .Yull control and operation of said leased premises; and for the Purpose of enlarging and keeping the :ame in repair as hereinnbove, stipulated said Company shall have the right to take and use, ram the land belonging to said City eSroet the ditch right of nay, and upon nhich Said ditch is situated all the dirt necessary, without coot; provided, "owever, that such control and operation of said promises will at no time interfere with the full operation of said power plant by said City or its grantees. Sixth: Said Company Shall be liable for cyy and all damages which may be caused to persons or to property by .reason of its, the Compeny'S, negligence in failing to keep said Promises iA:,proner`re_,air and cafe condition. I .�l.A�_.._1. ... V�L.. 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