HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 01/15/2019 - RESOLUTION 2019-008 AUTHORIZING THE CITY MANAGER TAgenda Item 14
Item # 14 Page 1
AGENDA ITEM SUMMARY January 15, 2019
City Council
STAFF
Suzanne Bassinger, Civil Engineer III
Eric Potyondy, Legal
SUBJECT
Resolution 2019-008 Authorizing the City Manager to Execute an Agreement Regarding Use of Water
Available Under 2.25 of the City's Shares of the Water Supply and Storage Company for a Three-Year Term
and Ten Potential One-Year Renewals.
EXECUTIVE SUMMARY
The purpose of this item is to approve a resolution to authorize Park Planning and Development Department
(“Park Planning”) to enter into a long-term agreement to allow an agricultural water user to use certain City
owned irrigation water rights. Park Planning recently purchased 2.5 shares of the Water Supply and Storage
Company (“New WSSC Shares”) as a source of irrigation water for several existing and planned parks in
northeast Fort Collins. Several of the parks are in the developmental stage and do not currently require water
deliveries under the shares. While those parks are being developed, Park Planning desires to enter into an
agreement to allow for the use of 2.25 of the New WSSC Shares by an agricultural water user as a source of
revenue and to ensure that all the New WSSC Shares continue to be used, which preserves their value. (The
other 0.25 share of the New WSSC Shares would be used to irrigate existing parks, including the recently
completed Crescent Park in the Maple Hill Subdivision.) The agreement would be for three irrigation seasons,
with options for additional one-year periods.
STAFF RECOMMENDATION
Staff recommends adoption of the Resolution.
BACKGROUND / DISCUSSION
City Water Supplies and Rentals
The City owns a broad portfolio of water interests confirming the City’s rights to use water, such as water rights
and water contracts. Within the City, the use and responsibility for these water interests are generally divided
among several departments and service areas, including Utilities, the Natural Areas Department (“Natural
Areas”), Park Planning and the Parks Department (“Parks”), the Recreation Department, and the Sustainability
Department. (Attachment 1)
Generally speaking, Park Planning acquires and develops parks and their water supplies for the City. Once a
park is complete, the park and its water interests are turned over to Parks for operation. These two
departments are often grouped together in the context of describing the City’s water interests.
City Council has historically authorized Utilities to rent the use of its surplus water. Utilities often has surplus
water in wet and average years to make available for rent due to various factors, including the fact that Utilities
has acquired water interests for future needs that the City will grow into and the fact that the yield from and
demand for Utilities water rights vary by year. This has generally not been the case for other departments,
such as Parks and Park Planning.
Agenda Item 14
Item # 14 Page 2
Park Planning’s New WSSC Shares
Park Planning recently purchased from Cliff E. Simpson the New WSSC Shares, being 2.5 shares of the Water
Supply and Storage Company (“Company”). Mr. Simpson historically used the 2.5 shares to irrigate lands
under the Company’s system. The New WSSC shares have not been through a judicial change of water right
proceeding and were not included in the City’s change of water rights decree entered by the Water Court in
Case No. 2011CW265 that changed the use of the City’s previously owned 26.667 shares in the Company.
Without some additional State administrative or judicial proceedings, they are primarily only available for
irrigation use under the Company’s system.
Parks Planning purchased the new WSSC Shares, among other reasons, for water supply purposes on
existing and planned parks in northeast Fort Collins. The new WSSC shares are not part of Utilities’ portfolio
and system. Several of these planned parks are in the developmental stage and do not currently require water
deliveries under the shares. Due to various factors, it may be several years before these parks can take
delivery of all of the water available under the new WSSC shares. In this circumstance, there will be surplus
available water under the new WSSC shares for a few years.
Agreement for an Agricultural Water User’s Use of 2.25 Shares of the New WSSC Shares
Mr. Simpson and other agricultural water users own various lands under the Company’s system and would
have a current use for water available under the new WSSC shares if they were made available. Because of
the status of the development of the existing and planned parks in northeast Fort Collins, Parks Planning has
determined that it can allow for the use of 2.25 of the new WSSC shares (“2.25 shares”) by Mr. Simpson or
other agricultural water users for at least three years, and possibly more, depending on how the development
of those parks proceeds. The other 0.25 share of the new WSSC shares would be used to irrigate existing
parks, including the recently-completed Crescent Park in the Maple Hill Subdivision, which can be served by
the Company’s system.
The use of water available under the 2.25 Shares under such an arrangement will provide Park Planning with
additional revenue for an asset that would otherwise be stranded for several years. It will also further the use
of the 2.25 shares which will help maintain their value and help preserve the City’s options in the future.
Allowing the use of the 2.25 shares by Mr. Simpson is a preferred option because he has historically used the
shares, which will reduce potential issues with the Company, and will reduce any additional administrative
burden on Utilities, if it were to seek to rent the 2.25 Shares on behalf of Park Planning. Although Park
Planning believes that it has a meeting of the minds with Mr. Simpson and that the proposed agreement will be
executed promptly, in the unlikely scenario in which he does not actually execute the proposed agreement,
Staff requests the authority to enter into the same agreement with another, similarly-situated agricultural water
user.
The agreement would be for an initial term of three irrigation seasons (2019, 2020, and 2021). It includes
options for additional one year periods, which require the agreement of both parties, such that this agreement
would not impede the City’s use of the water for new parks.
The price is based on the formula that Utilities uses for the rental of Water Supply and Storage Company
shares being the annual assessment plus $1,000. This reflects the market price for the shares under this type
of arrangement.
CITY FINANCIAL IMPACTS
The new WSSC shares are subject to an existing First Use Agreement, dated February 28, 1987, pursuant to
which the City of Thornton pays the actual Company assessments on the new WSSC shares. Revenues
under this agreement would thus be a net positive for Park Planning and would not be offset by Company
assessments on the shares.
Agenda Item 14
Item # 14 Page 3
BOARD / COMMISSION RECOMMENDATION
The Water Board voted unanimously to approve the proposed lease agreement, December 20, 2018.
(Attachment 2)
ATTACHMENTS
1. Department Ownership of Water Interests, Second Amended Agreement December 12, 2018 (PDF)
2. Water Board Minutes Excerpt, December 20, 2018 (Draft) (PDF)
Page 1 of 12
SECOND AMENDED AND RESTATED MEMORANDUM OF UNDERSTANDING
BETWEEN VARIOUS COMPONENTS OF THE CITY OF FORT COLLINS
REGARDING RESPONSIBLE PARTIES FOR THE WATER INTERESTS
OF THE CITY OF FORT COLLINS
This Memorandum of Understanding (“Agreement”) is entered into by and between the
following components of the City of Fort Collins organization (“City”): the Utilities Service Area
(“Utilities”); the following departments of the Community and Operations Services Service Area:
the Natural Areas Department (“Natural Areas”); the Parks Department (“Parks”); the Park
Planning and Development Department (“Park Planning”); the Recreation Department
(“Recreation”); and the Social Sustainability Department (“Sustainability”) of the Sustainability
Services Service Area.
RECITALS
A. The City holds title to or otherwise has ownership interests in various water rights, water
right decrees, shares in ditch and reservoir companies (“shares”), and contractual rights to the
delivery of water that are sources of supply of untreated water (together, “Water Interests”).
B. While the Water Interests are in the City’s name, Utilities has been considered to be the
“Responsible Party” for the majority of the Water Interests. Natural Areas, Parks, Park Planning,
Recreation, and Sustainability have been considered to be the “Responsible Parties” for other
Water Interests. A “Responsible Party” in the context of this Agreement is defined as the
component of the City managing and generally responsible for its Water Interests.
1
C. There is currently no document clarifying the Responsible Parties for the City’s Water
Interests. It will be to the benefit of the City to articulate the Responsible Parties for the City’s
Water Interests.
D. Utilities, Natural Areas, Parks, Park Planning, Recreation, and Sustainability have worked
together through their respective staff to reach such an understanding.
E. The components of the City entered into the original Agreement on November 22, 2017.
Pursuant to Paragraph 8, the lists of the Responsible Parties and their respective Water Interests
have been updated previously
2
and are further updated in this Amended and Restated Agreement
(hereinafter “Agreement”). All previous versions of this Agreement and lists of the Responsible
Parties and their respective Water Interests pre-dating this Agreement are replaced in their entirety.
AGREEMENT AND UNDERSTANDING
1. Incorporation of Recitals. The foregoing recitals are hereby incorporated as if fully
restated in their entirety.
1 For shares in ditch and reservoir companies that have more than one Responsible Party, this Agreement identifies a
Responsible Party for a number of such shares, and does not identify a Responsible Party for specific shares.
2 Previous updated versions of this Agreement include those dated: May 22, 2018.
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ATTACHMENT 1
Page 2 of 12
2. Purposes and Objectives. The main purposes of this Agreement are:
to identify the Responsible Party for each of the City’s Water Interests; and
to have a definitive and current list of all of the City’s Water Interests and the Responsible
Parties for each of those Water Interests.
3. Responsible Parties. Each of the Water Interests shall have a “Responsible Party.” Lists
of the Responsible Parties and their respective Water Interests are attached hereto as exhibits.
Utilities shall be considered to be the Responsible Party for any Water Interests not included on the
list. These lists shall be updated, as necessary, pursuant to Paragraph 8.
4. Changing the Responsible Party for Certain Water Interests. As circumstances change,
it may become desirable for the Responsible Parties for certain Water Interests to change, which
shall be completed as provided below. Any such change of the Responsible Party shall be
documented in a memorandum of understanding. As soon as practicable after completing such a
change of the Responsible Party, both parties shall update their lists pursuant to Paragraph 8.
5. Permanent Disposition of Water Interests. As circumstances change, it may become
desirable for the City to consider the conveyance, sale, transfer, or other permanent disposition of
certain Water Interests. The Responsible Party for a Water Interest subject to such consideration
shall confer with other Responsible Parties and other potentially effected City departments
regarding whether it would be in the City’s best interest for the City to retain ownership of the
subject Water Interest with the Responsible Party being changed pursuant to Paragraph 4. Utilities
shall have a right of first refusal to buy any Water Interests no longer desired by the Responsible
Party. If the City completes the conveyance, sale, transfer, or other permanent disposition of a
Water Interest, pursuant to the applicable requirements of City Code, the Responsible Party shall
update its list pursuant to Paragraph 8.
6. Potential Cross-Utilization of Water Interests. There are some Water Interests for which
Utilities is not the Responsible Party, but which may be used for municipal use for treated water
supply (e.g. units of the Colorado-Big Thompson Project, Coy Ditch water right, certain shares in
the Box Elder Ditch Company). There are also some Water Interests for which Utilities is not the
Responsible Party, but which have been judicially changed from the originally-decreed use(s) to
include municipal use for treated water supply in Water Court proceedings prosecuted by Utilities
(e.g., certain shares in the Southside Ditches, all shares in the Pleasant Valley and Lake Canal
Company, certain shares in the Water Supply and Storage Company). Under certain circumstances
(such as an extreme drought or other unique water supply scenarios), it may benefit the City to
allow Utilities to use such Water Interests for municipal use for treated water supply on a
temporary basis. In such event, the Parties will work together to meet all City water needs as best
as possible, while considering the needs and priorities of the City as a whole. More specifics on
such arrangements may be the subject of a subsequent agreement.
7. Future Acquisition of Water Interests. The City may acquire additional Water Interests in
the future. The component of the City acquiring a Water Interest shall be considered to be the
Responsible Party, and shall generally be responsible for evaluating whether the subject Water
Interests to be acquired meet their goals and needs. As soon as practicable after completing such
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acquisition, said Responsible Party shall update its list pursuant to Paragraph 8, in addition to
providing certificates from ditch and reservoir companies to the City Clerk.
8. Updating the Lists of Responsible Parties. It will be necessary to update the lists of the
Responsible Parties and their respective Water Interests, and possibly this Agreement, from time to
time, including, but not necessarily limited to:
each time the Responsible Party for a Water Interest changes (see Paragraph 4);
each time the City disposes of a Water Interest (see Paragraph 5);
each time the City acquires a new Water Interest (see Paragraph 7); and
other times as may be necessary or prudent to update the lists.
When such a list or lists need to or should be updated, the relevant Responsible Parties shall
contact the City Attorney’s Office as soon as practicable to amend and revise the lists and this
Agreement, each to the extent necessary. The collective Responsible Parties shall work with the
City Attorney’s Office to complete an amended and restated Agreement and lists as soon as
practicable. When complete, amended and restated Agreement and lists shall be provided to all
Responsible Parties and the City Attorney’s Office.
9. Compliance with City Code. Nothing herein shall be construed to conflict with any
limitations or requirements of City Code. To the extent that there is any conflict with or
inconsistency between this Agreement and City Code, City Code shall control.
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FORT COLLINS UTILITIES SERVICE AREA
By:
Kevin R. Gertig
Executive Director
Date:
COMMUNITY AND OPERATIONS SERVICES SERVICE AREA
By:
Wendy Williams
Director of Community and Operations Services
Date:
SUSTAINABILITY SERVICES SERVICE AREA
By:
Jacqueline Kozak-Thiel
Chief Sustainability Officer
Date:
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12/1/2018
12/3/2018
12/6/2018
Page 5 of 12
EXHIBIT A
UTILITIES’ WATER INTERESTS
Dated November 27, 2018
WATER RIGHTS AND DECREES
NAME DECREE(S)
Chaffee Ditch Change 1980CW288
Fort Collins Pipeline Water Rights CA1789, CA4244, CA4359, CA5327,
CA11217, CA11488, W-8719-77, 1982CW343,
1986CW268, 1993CW124
Halligan Reservoir and Exchanges 2007CW125, 2013CW3185, 16CW3169
In-Channel Diversions at Power Plant Dam and
Nature Center Dam
1986CW371, 2000CW236
Joe Wright Reservoir CA2031, CA11217 W-128, W-1424, W-7963,
W-9322-78, 1980CW199, 1982CW412,
1987CW136, 1987CW264, 1988CW197,
1997CW182,
Kingfisher Point Ponds (Natural Areas project
administered by Utilities)
2005CW262
Mantay Ditches CA2142, W-1410, W-1411, W-1412, W-1413
Meadow Creek Reservoir 1983CW99
Meadow Springs Ranch Water Rights 2009CW274
Michigan Ditch CA334, CA1783, CA2891, 1983CW99,
1988CW169, 1988CW206, 1995CW127,
2002CW96, 2009CW61, 2011CW37
PV&L Change 1980CW193
Poudre River Exchanges W-8086
Reuse Plan and Exchanges W-9322-78, 1983CW126, 1987CW78,
1995CW116, 2003CW324, 2015CW3053
Rigden Reservoir (16/19ths) 2014CW3158
Southside Ditches Change and Exchanges 1992CW129, 2002CW22, 05CW323,
2015CW3062,
WSSC Change and Exchanges 2011CW265
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SHARES IN DITCH AND RESERVOIR COMPANIES
NAME NUMBER OF SHARES
Arthur Irrigation Co. 626.8561
3
Dixon Lateral Ditch Co. 2.8
Larimer County Canal No. 2 Irrigating Co. 99.86171
New Mercer Ditch Co. 70.094849
North Poudre Irrigation Co. 3,563.75
Pleasant Valley and Lake Canal Co. 168.07546
Sherwood Irrigation Co. 1.5471875
Sherwood Reservoir Co. 50.0
Taylor and Gill Ditch Co. 0.0625
Warren Lake Reservoir Co. 95.05004
Water Supply and Storage Co. 26.417
CONTRACT RIGHTS
NAME COMMENTS
Colorado-Big Thompson Project – 18,801 Units of 18,855 total City ownership.
Reuse Plan - Agreement, dated August 10, 1978 Water supplies from Platte River Power
Authority and the Water Supply and Storage
Company, as provided for under that agreement
and the W-9322-78 Decree.
Windy Gap Project As provided to the City from the Platte River
Power Authority under the Agreement, dated
August 10, 1978
3 These Arthur Irrigation Co. shares are subject to agreements regarding the Gardens on Spring Creek. See Record of
Water Stock, Certificates, and Cash Turn into the City of Fort Collins, Reference No. 2679 (“Per letter of authorization
from the Everitt companies and accompanying P.O. #9923106 from the City of Ft. Collins, 15.000 of water is being
transferred from Everitt Investments’ water rights credit account into a water rights credit account for the City of Ft.
Collins Forestry/Horticulture Dept.”); Memorandum, dated November 21, 2000, from Dennis Bode, Water Resources
manager, to Jim Clark, Community Horticulturalist, RE Raw Water Requirements for Community Horticulture Center.
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EXHIBIT B
NATURAL AREAS’ WATER INTERESTS
Dated November 27, 2018
WATER RIGHTS AND DECREES
NAME DECREE(S)
Andrijeski Pond 2004CW361
Benson Reservoir (Fairport Reservoir)
4
CA4862, 1987CW307
Gateway Park Well Augmentation Plan 1987CW136
John G. Coy Ditch (50% interest) CA320, 2014CW3176
Natural Areas Augmentation Plan 2014CW3176
Rigden Reservoir (3/19ths) 2014CW3158
Spring Cañon Wasteway (2/12ths of right)
5
CA2031
Soapstone Water Rights 2009CW273 , 1992CW026
SHARES IN DITCH AND RESERVOIR COMPANIES
NAME NUMBER OF SHARES
Arthur Irrigation Co. 13.0
Box Elder Ditch Co. 5.0
Buckhorn Highline Ditch 29.0
Emigh Lateral Company 36.0
Fairport Reservoir and Ditch Company
6
269.0
Lake Canal Reservoir Co. 5.5
Louden Extension Canal and Reservoir Co. 7.0
Louden Irrigating Canal and Reservoir Co. 13.75
North Louden Ditch and Reservoir Co. 1.75
Pleasant Valley and Lake Canal Co. 0.7833
Sand Dike Ditch Co. 6.0
Trilby Lateral Ditch Co. 9.5
CONTRACT RIGHTS
7
NAME COMMENTS
Ditch 10 Contract Magpie Meander Natural Area.
8
4 See Treasurer’s Deed, dated November 18, 1994, Reception No. 94093068.
5 Spring Cañon Wasteway is a water right shared by several users, one of which is the City of Fort Collins. There is no
apparent incorporated ditch company that holds and operates the water right or issues physical shares. An Agreement
of Purchase and Sale of Real Property dated October 4, 2002 between land owners and the City (Natural Areas)
includes the transfer of “2 Shares of Capital Stock of the Spring Canyon Waste Way”. It is undetermined where the
concept of 12 total company shares originated.
6 Id.
7 Natural Areas’ Water Interests previously included 21 units of the Colorado Big-Thompson Project, which were Open
Rate units purchased in December 1997 with Wuerker Land. See Warranty Deed, dated April 2, 1997, Reception No.
97022945. However, pursuant to the Memorandum of Understanding Between Fort Collins Utilities and the Natural
Areas Department Regarding a Trade of Additional Capacity in Rigden Reservoir for Colorado-Big Thompson Project
units and Shares in the Pleasant Valley and Lake Canal Company, dated July 24, 2017, those units are now included in
Utilities’ Water Interests.
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EXHIBIT C
PARKS AND PARK PLANNING’S WATER INTERESTS
Dated November 27, 2018
WATER RIGHTS AND DECREES
NAME DECREE(S)
Fossil Creek Community Park Intake 2001CW261, 2010CW278
Portner Reservoir 2001CW260,
Rolland Moore Pond and Pipeline 1982CW157, 1982CW158, 1983CW211,
1983CW212
Roselawn Cemetery Well W01960, W-7926-75, W-7021
SHARES IN DITCH AND RESERVOIR COMPANIES
NAME NUMBER OF SHARES
Arthur Irrigation Co. 77.73
Baker Lateral Co. 1.0
Box Elder Ditch Co. 1.0
Dixon Canon Ditch and Reservoir Co. 830.0
Dixon Lateral Ditch Co. 2.0
Larimer and Weld Irrigation Co. 1.0
Larimer County Canal No. 2 Irrigating Co. 4.35
Louden Irrigating Canal and Reservoir Co. 2.0
New Mercer Ditch Co. 11.1871
North Louden Ditch and Reservoir Co. 2.0
Pleasant Valley and Lake Canal Co. 28.63
Sherwood Irrigation Company 1.1478125
Sherwood Reservoir Company 32.0
Warren Lake Reservoir Co. 74.295
Water Supply and Storage Co. 2.75
9
8 The interests in this Ditch 10 contract were acquired through two transactions, the “Jensen” and “King-Hatch”
transactions. See Quitclaim Deed, dated May 10, 2012, Reception No. 20130036335; General Warranty Deed, dated
May 10, 2012, Reception No. 20130036334; Quitclaim Deed, dated March 6, 2015, Reception No. 20150013254;
General Warranty Deed, dated March 6, 2015, Reception No. 20150013253. See also Report on No. 10 Ditch Contract
Rights, dated October 1991, and E. Ridge of Fort Collins, LLC v. Larimer & Weld Irr. Co., 109 P.3d 969 (2005).
9 The 2.5 Water Supply and Storage Company shares represented by Certificate No. 6796 are subject to a first use
agreement with the City of Thornton, dated February 28, 1987. The other 0.25 share was included in Case No.
2011CW265, where the water rights represented by 26.667 shares of the Water Supply and Storage Company owned
by the City were changed.
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CONTRACT RIGHTS
NAME COMMENTS
Colorado-Big Thompson Project – 44.0 Units of 18,855 total City ownership.
All Open Rate units.
10
Ditch 10 Contracts Greenbriar Park.
11
Soft Gold Park Site.
12
10 See Memorandum, Water Transfers – Bernhardt and Brown Properties, from Kimball Crangle-Krizman, Real Estate
Services, to John Fischbach, City Manager, dated March 5, 2003.
11 See Warranty Deed, dated August 26, 1985, Reception No. 85042243. See also Report on No. 10 Ditch Contract
Rights, dated October 1991, and E. Ridge of Fort Collins, LLC v. Larimer & Weld Irr. Co., 109 P.3d 969 (2005).
12 See Warranty Deed, dated March 3, 1995, Reception No. 95012453.
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EXHIBIT D
SUSTAINABILITY’S WATER INTERESTS
Dated November 27, 2018
CONTRACT RIGHTS
NAME COMMENTS
Colorado-Big Thompson Project – 10 Units of 18,855 total City ownership.
All Open Rate units.
13
13 See Memorandum, Water Transfers – Bernhardt and Brown Properties, from Kimball Crangle-Krizman, Real Estate
Services, to John Fischbach, City Manager, dated March 5, 2003. Sustainability’s Water Interests previously included
0.75 share in the Louden Irrigating Canal and Reservoir Company and 0.75 share in the North Louden Ditch and
Reservoir Company. However, pursuant to the Memorandum of Understanding Between the City of Fort Collins
Social Sustainability Department and Natural Areas Department Regarding 0.75 Share in the Louden Irrigating Canal
and Reservoir Company and 0.75 Share in the North Louden Ditch and Reservoir Company, dated September 29,
2017, those are now included in Natural Areas’ Water Interests.
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EXHIBIT E
RECREATION’S WATER INTERESTS
Dated November 27, 2018
SHARES IN DITCH AND RESERVOIR COMPANIES
NAME NUMBER OF SHARES
Arthur Irrigation Co. 7.0
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EXHIBIT G
TOTAL CITY SHARE OWNERSHIP AND TOTAL DITCH COMPANY SHARES
Dated November 27, 2018
NAME TOTAL CITY SHARE
OWNERSHIP
TOTAL NUMBER OF
COMPANY SHARES
Arthur Irrigation Co. 724.5861 1,496.945
Baker Lateral Co 1.0 5.0
Box Elder Ditch Co. 6.0 64.0
Buckhorn Highline Ditch 29.0 180.0
Dixon Canon Ditch and Reservoir Co. 830.0 1,000.0
Dixon Lateral Ditch Co.
14
4.80 N/A
Emigh Lateral Co.
15
36.0 36.0
Fairport Ditch and Reservoir Co. 269.0 269.0
Lake Canal Reservoir Co. 5.5 259.5
Larimer and Weld Irrigation Co 1.0 1,419.0
Larimer County Canal No. 2 Irrigating Co. 104.21171 146.5068
Louden Extension Canal and Reservoir Co. 7.0 600.0
Louden Irrigating Canal and Reservoir Co. 15.75 600.0
New Mercer Ditch Co. 81.281949 141.30153
North Louden Ditch and Reservoir Co. 3.75 20.12
North Poudre Irrigation Co 3563.75 10,000.0
Pleasant Valley and Lake Canal Co. 197.48876 255.0
Sand Dike Ditch Co. 6.0 26.5
Sherwood Irrigating Co 2.695 11.706706
Sherwood Reservoir Co 82.0 470.0
Taylor and Gill Ditch 0.0625 69.375
Trilby Lateral Ditch Co. 9.5 18.0
Warren Lake Reservoir Co 169.34504 225.0
Water Supply and Storage Co 29.167 594.4
14 The Dixon Lateral Ditch Co. was subsumed by the Warren Lake Reservoir Co. The Dixon Lateral Ditch Co.
conveyed to the Warren Lake Ditch Co. “All of the rights-of-way, ditches, easements, headgates, pipes, flumes, land,
its appurtenances and hereditaments, located in Sections 25 and 26, Township 7 North, Range 69 West of the 6th P.M.”
by deed dated November 25, 1974, recorded with the Larimer County Clerk on October 28, 1976 at Book 1730 Page
0013. The Dixon Lateral Ditch Co. does not own water rights.
15 The Emigh Lateral was a lateral off the Arthur Ditch that is no longer functioning for water deliveries. The Colorado
Secretary of State identifies the Emigh Lateral Ditch Co. as delinquent as of November 1, 2009. The Emigh Lateral
Ditch Co. does not own water rights.
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Excerpt from Unapproved DRAFT MINUTES - WATER BOARD
REGULAR MEETING
December 20, 2018, 5:30 p.m.
222 Laporte Avenue, Colorado River Community Room
12/20/2018 – Excerpt from Unapproved DRAFT MINUTES Page 1
o Park Planning & Development Lease Agreement for Rental of
Irrigation Shares to Agricultural User
(Attachments available upon request)
▪ Presentation Summary: Park Planning & Development Civil
Engineer III, Suzanne Bassinger summarized the agreement,
which would lease back the water supply and storage shares to the
seller as early in the year as possible in order to allow the leasee to
develop water use projections and planting plans for his agricultural
land for the 2019 growing season.
Ms. Bassinger shared a map of the Park Master Plan showing the
inset of future parks planned for North of Mountain Vista. These
four parks (three future parks and one existing park), are 100 acres
of gross land that parks prefers to use non-potable water. The
development and construction of these parks will not take place
until 5 to 15 years down the road.
Parks required the two shares of water supply and storage, and
currently doesn’t have a need for them. They are purposing to
lease 2.25 of the shares back to the seller at the same rate,
$3,100, plus the annual assessment of $1,000. They would enter
into a 3-year lease agreement and request full payment at time of
lease signing.
▪ Discussion Summary: Board members inquired and commented on
various related topics including if this type of lease would cause a
problem for normal rentals (This water is Parks’ water and not
Utilities’ water), and why this issue would be something the Water
Board has to weigh in on (Council likes to have Water Board’s
thoughts on anything water related).
Chairperson Bovee moved that the Water Board supports a proposed
resolution to Council for Park Planning & Development to enter into a
lease with Cliff Simpson for an initial term of 3-years for 2.25 shares of
Water Supply & Storage; such shares to be used for agricultural
irrigation purposes only. The lease rate for the initial 3-year term shall
ATTACHMENT 2
WATER BOARD
REGULAR MEETING
11/15/2018 – Excerpt from Unapproved DRAFT MINUTES Page 2
be $27,675. Park Planning & Development has the option to grant 1-
year lease extensions for up to 10-years.
Board Member Hill seconded the motion.
Vote on the motion: It passed unanimously, 11-0.
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RESOLUTION NO. 2019-008
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AUTHORIZING THE CITY MANAGER TO EXECUTE AN AGREEMENT REGARDING
USE OF WATER AVAILABLE UNDER 2.25 OF THE CITY’S SHARES
OF THE WATER SUPPLY AND STORAGE COMPANY FOR A
THREE-YEAR TERM AND TEN POTENTIAL ONE-YEAR RENEWALS
WHEREAS, the City recently purchased 2.5 shares of the Water Supply and Storage
Company, a mutual ditch and reservoir company (“New WSSC Shares”); and
WHEREAS, pursuant to internal arrangements between City departments and service
areas, the New WSSC Shares pertain to and are generally the responsibility of the Park Planning
& Development Department and do not pertain to the Utilities and are not part of the part of the
water utility system; and
WHEREAS, the New WSSC Shares were purchased, among other reasons, for water
supply purposes on existing and planned parks in northeast Fort Collins; and
WHEREAS, the New WSSC Shares have not been through a judicial change of water
right proceeding such that, without additional State administrative or judicial proceedings, they
are primarily only available for irrigation use under the Water Supply and Storage Company
system; and
WHEREAS, several of such planned parks are in the developmental stage and do not
currently require water deliveries under the New WSSC Shares, such that for the next few years,
the amount of water available under the New WSSC Shares will likely be greater than the
immediate needs of the City and its inhabitants, and is thus potentially available for use by
persons outside of the City as a rental; and
WHEREAS, pursuant to Article XII, Section 4 of the City Charter, if at any time the
water supply is greater than the immediate needs of the City and its inhabitants, the City Council
may authorize the City Manager to permit the use of such surplus water by consumers outside
the City at such rates as the City Council may prescribe, provided that no vested right shall
accrue under such permits; and
WHEREAS, City Council has historically authorized Fort Collins Utilities (“Utilities”) to
lease the use of surplus water under water interests that pertain to Utilities and is part of the
water utility system, most recently through Ordinance No. 038, 2018 of the Council of the City of
Fort Collins Establishing Rates and Delivery Charges for Use of Water Available Under the
City’s Water Interests for 2018 Through March 2021, which is due, among other reasons, to the
fact that Utilities has acquired water interests for the future needs of Utilities and the fact that the
yield from and demand for Utilities water rights vary by year; and
WHEREAS, City staff has negotiated an agreement with Cliff E. Simpson, attached
hereto as Exhibit “A” (“Agreement”), regarding his temporary use of 2.25 of the New WSSC
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Shares (“2.25 Shares”), which will provide revenue for the City and help preserve their value by
ensuring their use while the planned parks in northeast Fort Collins and being developed and
completed; and
WHEREAS, in the event that Mr. Simpson were to not execute the Agreement for
whatever reason, it would be beneficial to the City to offer the same Agreement to other,
similarly-situated agricultural water users.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF
FORT COLLINS as follows:
Section 1. That the City Council hereby makes and adopts the determinations and
findings contained in the recitals set forth above.
Section 2. City Council finds, pursuant to Section 23-113(b)(1) of the City Code, that
an agreement for use of the 2.25 Shares pursuant to an agreement that is substantially similar to
the attached Agreement is in the best interest of the City.
Section 3. City Council finds, pursuant to Section 23-114 of the City Code, that an
agreement for use of the 2.25 Shares pursuant to an agreement that is substantially similar to the
attached Agreement will result in the City receiving a value in an amount equal to or greater than
the fair market value of the 2.25 Shares under terms as those set forth in an agreement that is
substantially similar to the attached Agreement.
Section 4. That the City Manager is hereby authorized to execute an agreement
substantially in the form of Exhibit “A”, with such modifications and additional 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 or effectuate the purposes of this
resolution, including substituting Mr. Simpson for other, similarly-situated agricultural water
users in the event that Mr. Simpson does not execute the Agreement.
Passed and adopted at a regular meeting of the Council of the City of Fort Collins this
15th day of January, A.D. 2019.
_________________________________
Mayor
ATTEST:
_____________________________
City Clerk
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AGREEMENT BETWEEN THE CITY OF FORT COLLINS AND
CLIFF E. SIMPSON REGARDING USE OF WATER AVAILABLE UNDER 2.25 OF
THE CITY’S SHARES OF THE WATER SUPPLY AND STORAGE COMPANY
This Agreement, dated and effective this ___________________________, is entered into
by and between the following Parties: City of Fort Collins, Colorado, a home rule municipality
(“City”); and Cliff E. Simpson, an individual (“Mr. Simpson”).
RECITALS
A. The City recently purchased from Mr. Simpson 2.5 shares of the Water Supply and Storage
Company, a mutual ditch and reservoir company (“New WSSC Shares”). The water rights
represented by the New WSSC Shares have not been through a judicial change of water right
proceeding and were not included in the City’s change of water rights decree entered by the Water
Court in Case No. 2011CW265. The New WSSC Shares were represented by Stock Certificate
No. 6738 when they were in Mr. Simpson’s name, and are now represented by Stock Certificate
No. 6796 in the City’s name. Pursuant to internal arrangements between City departments and
service areas, the New WSSC Shares pertain to and are generally the responsibility of the Park
Planning & Development Department.
B. The City purchased the New WSSC Shares, among other reasons, for water supply
purposes on existing and planned parks in northeast Fort Collins. Several of such planned parks
are in the developmental stage and do not currently require water deliveries under the shares. Mr.
Simpson owns certain lands under the system of the Water Supply and Storage Company
(“Company”) and has a current use for water available under such shares.
C. During the developmental stage of such northeast parks, the City desires to allow
Mr. Simpson to use water available under 2.25 of the New WSSC Shares (“2.25 Shares”) pursuant
to the terms and conditions of this Agreement. Mr. Simpson’s use of water available under the
2.25 Shares will provide the City with additional revenue and will further the use of the
2.25 Shares.
D. The City is proceeding with this Agreement pursuant to Article XII, Section 4 of the City
Charter, and other applicable laws and policies.
AGREEMENT
1. Incorporation of Recitals. The foregoing recitals are hereby incorporated as if fully
restated in their entirety.
2. Mr. Simpson’s Right to Use Water Available Under the 2.25 Shares. During the term
of this Agreement, Mr. Simpson shall be entitled to use water available under the 2.25 Shares
pursuant to the following terms and conditions. Any rights not expressly granted to Mr. Simpson
hereunder shall be reserved to the City.
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2.1. Mr. Simpson shall use water available under the 2.25 Shares for the irrigation of
lands under the Company’s system or such other uses as may be approved by the Company.
Nothing in this Agreement authorizes Mr. Simpson to seek approval to change the use of
the water rights represented by the 2.25 Shares in any proceeding before the District Court
for Water Division 1, the Colorado Division of Water Resources, or any other entity with
jurisdiction.
2.2. This Agreement only authorizes Mr. Simpson to use water available under the
2.25 Shares pursuant to its terms and conditions, and therefore, Mr. Simpson shall be solely
responsible for coordinating and effectuating the delivery water available under the
2.25 Shares.
2.3. Mr. Simpson shall be responsible for ensuring that his use of water available under
the 2.25 Shares at all times complies with any and all applicable obligations and
requirements of the Company and local, state, and federal law. Mr. Simpson assumes any
and all risk associated with the use of water available under the 2.25 Shares under this
Agreement.
3. Term.
3.1. Initial Term. This Agreement shall be for an Initial Term from the date of this
Agreement through December 31, 2021, which includes three irrigation seasons, during
which Mr. Simpson shall acquire the right to use water under all of the 2.25 Shares.
3.2. Additional One-Year Periods. The Parties shall be entitled to extend this
Agreement for additional one-year periods, not to exceed 10 such additional-one-year
periods, for all or some of the 2.25 Shares provided that: both Parties agree to such a one-
year extension for a specific number of shares in increments of a quarter share, confirmed
in writing; and Mr. Simpson has paid in full the amount due for the additional one-year
before December 31 of the then-current year.
4. Payment. All payments under this Agreement shall be made to the City and directed to
the Park Planning & Development Department.
4.1. Initial Term Payment. The amount due for the Initial Term shall be $4,100 per
year per share, which is calculated as 2.25 shares x $4,100 per share = $27,675.00. The
entire $27,675.00 amount shall be paid in full to the City upon signing this Agreement.
4.2. Additional One-Year Periods Payments. The amount due for any additional one-
year periods shall be calculated as: (Company’s annual assessment per share + $1,000 per
share) multiplied by the number of shares to be used. The entire amount shall be paid in
full to the City on or before December 31 of the then-current year.
5. No Relinquishment of the 2.25 Shares. The City agrees that Mr. Simpson shall have the
right to use water available under the 2.25 Shares pursuant to the terms and conditions of this
Agreement, but Mr. Simpson acknowledges and agrees that the City relinquishes no other rights
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in and to the 2.25 Shares, relinquishes no water or water rights associated with the 2.25 Shares,
and reserves the full right to determine all matters in connection with the control and use of the
City’s water and water rights, and that all use hereunder is contingent upon payment by Mr.
Simpson of all amounts due to the City as provided herein and continued compliance with the
terms and conditions of this Agreement.
6. Untreated Water. Mr. Simpson acknowledges and agrees that the water available under
the 2.25 Shares under this Agreement is neither treated nor potable water and, therefore, the City
disclaims any warranties, expressed or implied, regarding the quality or the potability of the water
to available under the 2.25 Shares.
7. Indemnification. Mr. Simpson shall indemnify and hold the City harmless from any and
all claims, injuries or losses, including any associated costs or attorney fees, resulting from its use
of the 2.25 Shares, or resulting from contact with water attributable to the 2.25 Shares.
8. Fiscal and Legal Contingency. Notwithstanding any other provision of this Agreement
to the contrary, the obligations of the City in fiscal years after the fiscal year of this Agreement
shall be subject to appropriation of funds sufficient and intended therefor, with the City having the
sole discretion to determine whether the subject funds are sufficient and intended for use under
this Agreement, and the failure of the City to appropriate such funds shall be grounds for the City
to terminate this Agreement with written notice pursuant to Paragraph Error! Reference source n
ot found..
9. Remedies. If either Party fails to comply with the provisions of this Agreement, the other
Party, after providing written notification to the noncomplying Party, and upon the failure of the
noncomplying Party to achieve compliance within 35 days, may seek all such remedies available
under Colorado law.
10. No Third-Party Beneficiaries. This Agreement is entered into between the Parties for the
purposes set forth herein. It is the intent of the Parties that they are the only beneficiaries of this
Agreement and the Parties are only benefitted to the extent provided under the express terms and
conditions of this Agreement.
11. Governing Law and Enforceability. This Agreement shall be construed in accordance
with the laws of the State of Colorado. The Parties recognize that the constitutions, statutes, and
rules and regulations of the State of Colorado and of the United States, as well as the City’s charters
and codes, and rules and regulations, impose certain legal constraints on the City and that the
Parties intend to carry out the terms and conditions of this Agreement subject to those constraints.
Whenever possible, each provision of this Agreement shall be interpreted in such a manner so as
to be effective and valid under applicable law.
12. Waiver. A waiver of a breach of any of the provisions of this Agreement shall not
constitute a waiver of any subsequent breach of the same or another provision of this Agreement.
Nothing in this Agreement shall be construed as any waiver of governmental immunity of the
Parties who are governments or any other governmental provisions of State law. Specifically, by
entering into this Agreement, neither Party waives the monetary limitations on liability or any
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other rights, immunities, or protections provided by the Colorado Government Immunity Act,
C.R.S. § 24-10-101, et seq., or any successor or similar statutes of the State of Colorado.
13. Notices. All notices or other communications hereunder shall be sufficiently given and
shall be deemed given when personally delivered, or after the lapse of five business days following
mailing by certified mail-return receipt requested, postage prepaid, addressed as follows:
To the City: City of Fort Collins
Park Planning & Development Department
Attn: Director
215 Laporte Ave.
Fort Collins, Colorado 80521
sbassinger@fcgov.com
With copy to: Fort Collins City Attorney
300 LaPorte Avenue; P.O. Box 580
Fort Collins, Colorado 80522-0580
epotyondy@fcgov.com
To Mr. Simpson: Cliff E. Simpson
115 2nd Avenue
Ault, CO 80610
14. Construction. This Agreement shall be construed according to its fair meaning as it was
prepared by the Parties. Headings in this Agreement are for convenience and reference only and
shall in no way define, limit, or prescribe the scope or intent of any provision of this Agreement.
15. Entire Agreement. This Agreement constitutes the entire agreement of the Parties
regarding the matters addressed herein. This Agreement binds and benefits the Parties and their
respective successors. Covenants or representations not contained in this Agreement regarding the
matters addressed herein shall not bind the Parties.
16. Representations. Each Party represents to the other parties that it has the power and
authority to enter into this Agreement and the individual signing below on behalf of that Party has
the authority to execute this Agreement on its behalf and legally bind that Party.
17. Assignment. No Party may assign any rights or delegate any duties under this Agreement
without the written consent of the other Party.
[Remainder of Page Left Blank Intentionally]
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CITY OF FORT COLLINS, COLORADO, a Colorado home rule city
By: ______________________________________ Date:
Darin Atteberry, City Manager
ATTEST:
By: ______________________________________
City Clerk
APPROVED AS TO LEGAL FORM:
By: ______________________________________
City Attorney’s Office
Eric Potyondy, Assistant City Attorney
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CLIFF E. SIMPSON, an individual
By: ______________________________________ Date:
ATTEST:
By: ______________________________________