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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 03/16/2010 - SECOND READING OF ORDINANCE NO. 023, 2010, AUTHORI DATE: March 16, 2010 STAFF: Susan Smolnik _ Patrick Rowe Second Reading of Ordinance No. 023, 2010, Authorizing the Conveyance of a Perpetual, Non-exclusive Easement to Larimer County Canal No. 2 Irrigating Company. EXECUTIVE SUMMARY This Ordinance, unanimously adopted on First Reading on March 2, 2010, authorizes the granting of an easement by the City to the Larimer County Canal No. 2 Irrigating Company. The easement will allow for the continued use of the City Ditch for irrigation flows. Similar terms have been in place for over 100 years, and will avoid disruption of the right to run those irrigation flows. STAFF RECOMMENDATION Staff recommends adoption of the Ordinance on Second Reading. ATTACHMENTS 1. Copy of First Reading Agenda Item Summary- March 2, 2010 (w/o attachments) ATTACHMENT 1 DATE: March 2, 2010 STAFF: Susan Smolnik Patrick Rowe • First Reading of Ordinance No. 023, 2010, Authorizing the Conveyance of a Perpetual, Non-exclusive Easement to Larimer County Canal No. 2 Irrigating Company. EXECUTIVE SUMMARY //,, This Ordinance authorizes the gran of of an easement by the-City to�tXual rimer County Canal No. 2 Irrigating Company. The easement will allow forthe continued uselof tAe' City Ditch fo,irrigation flows. Similar terms have been in place for over 100 years, and will avo3Wdisruption of the right to run those irrigation flows. BACKGROUND / DISCUSSION The City Ditch was constructed in the late 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 Poudre Canyon and in 1906 leased the City Ditch to the Larimer County Canal No.2 Irrigating Company for 99 years. 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-th'e•Irrigating•C\pany-'rbption,the/Council's authorization at the time only authorized the lease for the initial 991years. The Irrigating''Company.believes,that the Irrigating Company has a right to continue operations under 99-year'lease renewal. The City-relieveslthat there is no automatic lease renewal because itwas not properly authorized by the Council,even though the lease document executed by the City provides for the 99-year extension. Both parties-believe that�ii is important to seek'a permanent solution to resolve this legal question. City Council approved extensions of the lease on March 15,2005,April4,2006, March 18,2008 and March 24,2009. City staff is now requesting that a permanent easement be granted to the company to resolve the legal dispute between the Irrigating Company and the City and to continue irrigation flows in the Ditch.The City owns approximately 65%of the shares in the Larimer County Canal No. 2 Irrigating Company. The Irrigating Company facilities convey water to Warren.Lake,enabling the irrigation of several City parks and the Collindale golf course. Other users of water sources delivered through the Larimer County Canal No.2 include Hewlett Packard, Intel,the Poudre School District, and the Warren Lake homeowners. Granting an easement will allow the continued use of the City Ditch for irrigation flows on similar terms as have beendn place for overN100 years,and\will avoid disruption of the right to run those irrigation flows in the City Ditch. \r �� 11 �V/ No charge is assessed for the value of,the•easement.du)to(,trh-e--pending legal dispute and historical circumstances and the long-standing arrangement that has existed between the City and the Company. The easement will provide a permanent solution regarding the continued delivery of water through the canal and provide mutual benefits for both parties. FINANCIAL IMPACT There is no additional cost to the City. The City will seek reimbursement from the Company for a portion of the administrative costs to the City for p the easemen rocessingt `CD March 2, 2010 -2- ITEM 18 SUSTAINABILITY: ECONOMIC, ENVIRONMENTAL AND SOCIAL IMPACTS This ordinance will allow the Larimer County Canal No.2 to continue to operate in the same manner as it has operated for over 100 years. The Utilities has raw water delivery obligations to the City's Parks and Golf departments and to the Poudre School District that require the use of Larimer County Canal No. 2. Granting the easement will allow the Utilities to continue to meet these obligations. STAFF RECOMMENDATION �-� Staff recommends adoption of the Ordin" n ance>on Fir't R ading ) Y BOARD / COMMISSION RECOMMENDATION The City's Water Board will discuss the granting of the easement at its February 25, 2010 meeting. The recommendation from the Board and the minutes from that meeting will be provided to Council prior to the March 2nd meeting. ATTACHMENTS 1. Location map COPY COPY COPY ORDINANCE NO. 023, 2010 OF THE COUNCIL OF THE CITY OF FORT COLLINS AUTHORIZING THE CONVEYANCE OF A PERPETUAL, NON-EXCLUSIVE EASEMENT TO LARIMER COUNTY CANAL NO. 2 IRRIGATING COMPANY 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, the City Ditch to the north of the Old Water Works is generally located on a parcel of real property that was acquired by the City in 1883 (the "City Ditch Property"); and WHEREAS, the Old Water Works and the City Ditch Property were or have been acquired by the City for Water Utility purposes using Water Utility revenues; 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 (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 a 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, on March 24, 2009, the City Council approved Resolution 2009-030, authorizing an additional one-year extension of the Lease to the Ditch Company; and WHEREAS, the Ditch Company has a continued need to use the City Ditch, 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, in order to establish an ongoing arrangement for the continued use of the City Ditch by the Ditch Company and to resolve the dispute and disagreement between the City and the Ditch Company regarding the extent of the authorization for such use, City staff and the Ditch Company have negotiated the terms of a perpetual, non-exclusive easement (the "Easement") for the use of the Ditch Company for conveyance of Larimer County Canal No. 2 irrigation flows over that certain area more specifically described in Exhibits A through D, attached hereto and incorporated herein by this reference (the "Easement Area"); and WHEREAS, in order to protect the City's interests and define the scope and terms and conditions governing the use of the Easement Area, City staff has negotiated with the Ditch Company the Easement Deed with Terms and Conditions,a copy of which,dated February 24,2010, is on file in the Office of the City Clerk and available for public inspection(the"Easement Deed"), which Easement Deed is incorporated herein by this reference; and WHEREAS,City staff has identified no negative impacts to the City resulting from the grant of the Easement; and WHEREAS, City staff is recommending that the Ditch Company not be charged for the Easement because of the City's desire to resolve the disagreement with the Ditch Company regarding the extent and term of the Lease, and because of the City's interest in facilitating the continuation of the current configuration of the Larimer County Canal No. 2 irrigation facilities and arrangements; and WHEREAS, Section 23-111 of the City Code provides that the City Council is authorized to sell, convey, or otherwise dispose of real property owned by a City Utility,provided the Council first finds by ordinance that such sale or other disposition will not materially impair the viability of the affected utility system as a whole and that it will be for the benefit of the citizens of the City will be for the benefit of the City's citizens and in the best interest of the City of Fort Collins. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That the conveyance of the Easement to the Ditch Company over the Easement Area as described herein and in the Easement Deed will not materially impair the viability of the affected utility system as a whole and that it will be for the benefit of the citizens of the City will be for the benefit of the City's citizens and in the best interest of the City of Fort Collins. Section 2. That the Mayor is hereby authorized to execute such documents as are necessary to convey the Easement to the Ditch Company on terms and conditions consistent -2- substantially similar to those set forth in the Easement Deed and consistent with this Ordinance, together with such additional terms and conditions or subsequent amendments or corrections as the City Manager, in consultation with the City Attorney, determines are necessary or appropriate to protect the interests of the City, including, but not limited to, any necessary changes to the legal description of the easement, as long as such changes do not materially increase the size or change the character of the easement. Introduced, considered favorably on first reading, and ordered published this 2nd day of March, A.D. 2010, and to be presented for final passage on the day of March, A.D. 2010. �Jl Mayor ATTEST: ILA City Clerk Passed and adopted on final reading on the 16th day of March, A.D. 2010. Mayor ATTEST: City Clerk -3-