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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 09/18/2018 - ITEMS RELATING TO THE CACHE LA POUDRE INSTREAM FLOAgenda Item 9 Item # 9 Page 1 AGENDA ITEM SUMMARY September 18, 2018 City Council STAFF John Stokes, Natural Resources Director Carol Webb, Water Resources/Treatmnt Opns Mgr Eric Potyondy, Legal SUBJECT Items Relating to the Cache la Poudre Instream Flow Plan. EXECUTIVE SUMMARY A. Resolution 2018-087 Authorizing the City Manager to Execute an Agreement Regarding Phase II of the Plan for Augmentation for Instream Flow Purposes on the Cache la Poudre River. B. Resolution 2018-088 Authorizing the City Manager to Execute an Agreement Regarding the Use of Certain Water Rights of the City of Fort Collins in the Plan for Augmentation for Instream Flow Purposes on the Cache la Poudre River. The purpose of this item is to seek Council review and approval of two proposed agreements to facilitate the potential approval and implementation of a plan to enhance Poudre River flows and to protect those enhanced flows. Resolution 2018-087 authorizes the City Manager to execute an agreement regarding Phase II of a three-phase project to develop an instream flow augmentation plan on the Poudre River through and near Fort Collins. Resolution 2018-088 authorizes the City Manager to execute an agreement regarding the use of certain City water rights to support implementation of the instream flow augmentation plan. STAFF RECOMMENDATION Staff recommends adoption of the Resolutions. BACKGROUND / DISCUSSION Agreement Phase II Resolution 2018-087 is a proposed Agreement among various parties to initiate Phase II of a three-phase project intended to enhance flows in the Poudre River through and near Fort Collins, and to protect those flows when they are in the River. Parties to Phase II include the City of Greeley, the City of Thornton, Northern Water, the Cache la Poudre Water Users Association, Colorado Parks and Wildlife, the Colorado Water Conservation Board (CWCB), and the Colorado Water Trust. Phase I was approved by City Council in 2016 through Resolution 2016-022. Phase I activities included extensive due diligence, development of a draft water court application, drafting “seed water” agreements with the CWCB, and various other tasks. Those tasks are ending, and the partners wish to move to Phase II. The purpose of Phase II generally concerns the tasks needed to acquire approval of the Instream Flow Augmentation Plan (ISF Plan) from the CWCB and from the District Court for Water Division 1 (Water Court). Agenda Item 9 Item # 9 Page 2 Phase II tasks will include, but not necessarily be limited to: creating and executing the Phase II Agreement among the partners; obtaining CWCB approval of the ISF Plan; obtaining final agreements/leases between the CWCB and those partners entering agreements with the CWCB to provide “seed water” for the ISF Plan; establishing an organizational structure for the administration and operation of the ISF Plan such that it can be implemented in Phase III; and final preparation and prosecution of the application for the ISF Plan in the Water Court to a final decree. Phase III would be an implementation phase. Phase III would not proceed unless and until the partners develop additional agreements. Agreement Use of City Water Rights in the ISF Plan Resolution 2018-088 is a proposed agreement that would allow the City to utilize some of its water rights for inclusion in the ISF Plan should it be approved by the Water Court and proceed to Phase III (implementation). Approval of this agreement and inclusion of this water in the ISF Plan will signal to the Water Court that the partners are able to bring water to the ISF Plan at its inception. In addition to the City, the Cities of Greeley and Thornton are bringing “seed” water to the table. This proposed agreement was developed with Utilities. Under the proposed agreement, on an annual basis in the spring, the City would designate some of its changed water rights in the “Southside Ditches” ditch and reservoir companies for inclusion in the ISF Plan to generate protected flows. This way, the City would not be at risk of not having adequate water supplies in the coming year. In the event of a water supply emergency, however, the City could still pull these water rights out of the ISF Plan, if necessary. The protected flows would begin west of Fort Collins at the ditches’ diversions structures, near Overland Trail and near Taft Hill Road depending on the specific water right. The protected flows would flow down the River to the Fossil Creek Reservoir Inlet Ditch, near the Drake Water Reclamation Facility. Here, the City could re-divert the water into storage in Rigden Reservoir for later use. This way, the City would still be able to use these water rights for City purposes while also generating protected flows. After the ISF Plan has been approved and is being implemented, the City may consider subsequent agreements to use City water rights in other ways in the ISF Plan. Potential as Mitigation Tool and Management Committee If this project is successful at creating an instream flow augmentation plan, the plan could be used as a tool by water developers to mitigate the impacts of their projects. That could, for example, include the Northern Integrated Supply Project (NISP), the proposed enlargement of Milton Seaman Reservoir, the proposed enlargement of Halligan Reservoir, the Thornton pipeline, and perhaps other future projects. However, NISP is unlikely to need the ISF Plan because the Colorado Legislature passed a bill allowing protected ISF releases from new reservoirs. In addition, these projects are subject to Federal and State review and the potential imposition of mitigation by Federal and State agencies. This project has no direct bearing on the permitting processes, although it could make more feasible the implementation of mitigation obligations. The ISF Agreement calls for the establishment of a management committee that is intended to be composed of staff from the water users/participants. The purpose of the committee essentially is to manage the technical tasks that are necessary to complete Phase II. All decisions must be unanimous, and no new entity is created for the project. The Colorado Water Trust will act as the fiscal agent for Phase II and will be the primary consultant to the project. CITY FINANCIAL IMPACTS Phase II of the instream flow augmentation plan will require the development of various legal, technical, financial, and governance tools. The final budget for Phase II has not yet been developed. However, the Natural Areas Department has committed up to $20,000 to Phase II and will use budgeted funds appropriated for instream flow purposes. Other partners are contemplating similar contributions as well as private fundraising. In addition, staff are supporting the project with their time from the City Attorney’s Office, the Water Utility, and Natural Areas. Agenda Item 9 Item # 9 Page 3 BOARD / COMMISSION RECOMMENDATION The Land Conservation and Stewardship Board recommended the Phase II agreement by a vote of 7 -1 at its August 8 meeting. The Water Board recommended the Phase II agreement unanimously at its August 16 meeting. ATTACHMENTS 1. Land Conservation and Stewardship Board August 8, 2018 (draft) (PDF) 2. Water Board minutes, August 16, 2018 (draft) (PDF) Excerpt from Unapproved Land Conservation and Stewardship Board minutes August 8, 2018. Intergovernmental Agreement for the Instream Flow Augmentation Plan John Stokes, Natural Areas Director, provided information on an agreement with other parties involved in the Instream Flow Augmentation Plan. John described the agreement to have three phases. Phase I of the plan included extensive due diligence, development of a water court application, drafting “seed water” agreements with the State of Colorado, and various other tasks. Those tasks are ending, and the partners wish to move to Phase II. Phase II would include tasks to acquire approval of the ISF Augmentation Plan from the CWCB and from the District Court for Water Division 1 (“Water Court”). The idea is to identify stream reaches where water can be dropped into the river and protected from diversion by other users. There are some protected instream flow rights in the canyon but not on the flat land portion of the river. This is something that Fort Collins has been trying to achieve for 40+ years. The partners involved are the City of Fort Collins, City of Greeley, Cache la Poudre Water Users Association, Norther Water, Thornton, Colorado Division of Parks and Wildlife, the Colorado Water Conservation Boards and the Colorado Water Trust. Discussion: Vicky - Were there any concerns with Phase I? John said the main concern from the State Engineers Office was how the water would be administered. They want to support the project but have concerns because it’s a new concept. Ed - There seems to be no political power, no regulatory guidelines so there seems to be a lot of freedom in taking water out of the river. Is there any entity that would just not allow water to be removed, to maintain a healthy river? John noted that one thing to keep in mind is that irrigation entities to the east of us have water rights that will continue to be delivered to the Poudre for the foreseeable future. As water is changed to municipal use, much of that water is already diverted upstream of Fort Collins. This proposed plan allows for additional water to be added to what is already there. Marcia - If it becomes an instream flow water right, does it still maintain its seniority? John reported seniority can be maintained. An example would be ditches in Fort Collins. Those ditches were adjudicated years ago when Fort Collins went to Water Court and changed those rights. Augmentation is one of the approved uses. If we can protect the water for instream flow, we can run it through town, take it out somewhere else like Rigden Reservoir and then we can run it back out of the reservoir to meet our return flow obligations. Vicky - Of the City’s portion of this costs will NAD have to fund any of this? ATTACHMENT 1 John reported that the $25,000 is Keep Fort Collins Great money. Andrea - Does Glade or NISP (Northern Integrated Supply Project) change any of this? John reported it doesn’t affect it directly. While Northern is a participant in this project they have a bill that passed in last Legislative session that allows an upstream diverter who has water in a reservoir to release that water to the river and run it down to another diversion. This is how they are going to implement their mitigation strategy. They could have done it in this plan but instead introduced a bill and got it approved. NISP does not need this plan to implement its flow-based mitigation. Kelly - I won’t support this because NISP is an environmental tragedy, from wildlife to habitat. The health of the Poudre River will be destroyed. I don’t want any part of this. I understand the Board and City’s viewpoint, but I’m not interested in the 1% solution. This enables projects like NISP. Joe - The actual agreement states ‘all decisions must be unanimous, and no new entity is created for the project’. You’ve got five or six users; does that mean that everyone must agree to the flow? What if there is a disagreement between Thornton and City of Fort Collins? John explained that the agreement is based on consensus. If someone opposes us in Water Court, then they are out of the plan. So far, we’ve had a very collaborative relationship with the partners. The partnership could be, in some ways, just as important as the project. Ed - What type of interest would be opposed to this in the long run? How do you react to the statement that this enables project like NISP or other projects? John believes that some entities may view the plan as a threatening new tool. If it is established on the Poudre River, then others may be threatened by that. For the long haul this is one tool that is bringing people together for a variety of reasons. Even though this could be used as a mitigation component for NISP, they don’t need it. They have the bill passed by the Legislature. It’s not apparent to me that this is a mitigation tool for any project at this point although it conceivably could be used that way. David – For $25,000 I’m not terribly upset, if it’s not our money. I’ll still tentatively go along with it. Sounds to me like a lottery ticket. VICKY MCLANE MADE A MOTION THAT CITY COUNCIL APPROVE THE AGREEMENT REGARDING PHASE II OF A MULTI-PHASE PLAN FOR AN INSTREAM FLOW AUGMENTATION PLAN ON THE CACHE LA POUDRE RIVER. MARCIA SECONDED THE MOTION. THE MOTION WAS APPROVED 7 IN FAVOR 1 OPPOSED Excerpt from Unapproved Water Board Minutes – August 16, 2018 Phase II Agreement for the Cache la Poudre Instream Flow Augmentation Plan (Attachments available upon request) Natural Areas Director John Stokes summarized the project. Staff seeks City Council approval of a proposed agreement between various parties to implement Phase II of a three-phase project to develop an instream flow augmentation plan on the Poudre River through and near Fort Collins. Land Conservation & Stewardship Board voted to endorse the plan; one abstention opposed vote was due to Northern Integrated Supply Project (NISP) as a potential mitigation tool. Discussion Highlights Board members inquired about and commented on various related topics including the scope of the project, water rights, Thornton Pipeline project (no direct relation between the two projects), Thornton water rights, implications in continuing to participate ($25,000 set aside a few years ago from Keep Fort Collins Great (KFCG) funds, not from Natural Areas Department budget). A board member commented that the memo provided an excellent summary of the project. Chairperson Brett Bovee moved that the Water Board recommend Council approval of the Agreement Regarding Phase II of a Multi-Phase Plan for an Instream Flow Augmentation Plan on the Cache la Poudre River. The parties to the Agreement include the City of Fort Collins, City of Greeley, Cache la Poudre Water Users Association, Northern Water, Thornton, Colorado Division of Parks and Wildlife, the Colorado Water Conservation Board, and the Colorado Water Trust. Board Member Phyllis Ortman seconded the motion. Vote on the Motion: It passed unanimously 7-0. ATTACHMENT 2 -1- RESOLUTION 2018-087 OF THE COUNCIL OF THE CITY OF FORT COLLINS AUTHORIZING THE CITY MANAGER TO EXECUTE AN AGREEMENT REGARDING PHASE II OF THE PLAN FOR AUGMENTATION FOR INSTREAM FLOW PURPOSES ON THE CACHE LA POUDRE RIVER WHEREAS, the Cache la Poudre River (“Poudre River”) flows through Fort Collins and is a significant amenity to the City, its citizens, and the region; and WHEREAS, the Poudre River is the source of water supply for numerous water users, including the City, such that the majority of Poudre River flows are diverted into canals, ditches, pipelines, reservoirs, and other waterworks; and WHEREAS, such diversions reduce the flows of water through Fort Collins, which has various ecological, environmental, recreational, sociological, and other impacts, some of which are adverse; and WHEREAS, the City desires to enhance Poudre River flows through Fort Collins and in the region while working within the existing legal context, including the prior appropriation doctrine, which is confirmed in Sections 5 and 6 of Article XVI of the Colorado Constitution and the Water Right Determination and Administration Act of 1969, C.R.S. §§37-92-101 et seq.; and WHEREAS, the City has actively participated in the Poudre Runs Through It Study/Action Work Group (“PRTI”), a group of community water leaders convened by the Colorado State University’s Colorado Water Institute for the purpose of exploring options to improve the Poudre River as a healthy, working river; and WHEREAS, the PTRI’s FLOWS committee (“FLOWS Committee”) was formed thereafter from members of the PRTI, including the City, the Cache la Poudre Water Users Association, the Colorado Water Trust, the City of Greeley, and the Northern Colorado Water Conservancy District (collectively, “Initial Participants”); and WHEREAS, the FLOWS Committee was tasked with exploring options to improve Poudre River flows, particularly downstream of the canyon mouth to the South Platte River, and at times when flows would improve the ecological health of the river, while not injuriously affecting the owners of or persons entitled to use water under vested water rights or decreed conditional water rights; and WHEREAS, as part of this effort, the FLOWS Committee developed the idea of a plan for augmentation for instream flow purposes (“Instream Flow Augmentation Plan”) to enhance and protect additional flows in portions of the Poudre River without injuriously affecting the owners of or persons entitled to use water under vested water rights or decreed conditional water rights; and -2- WHEREAS, the Initial Participants executed the Agreement Regarding Phase I (Development) of a Multi-Phase Plan for an Instream Flow Augmentation Plan on the Cache la Poudre River (“Phase I Agreement”) which was approved by City Council pursuant to Resolution 2016-022 on March 1, 2016; and WHEREAS, Phase I and the tasks described in the Phase I Agreement regarding the initial development of the Instream Flow Augmentation Plan are substantially complete; and WHEREAS, the City of Thornton, Colorado Parks and Wildlife, and the Colorado Water Conservation Board (collectively, “New Participants”) wish to work with the Initial Participants to participate in development of the Instream Flow Augmentation Plan; and WHEREAS, the Initial and New Participants (together “Participants”) intend to proceed with Phase II, which primarily concerns receiving approvals from the Colorado Water Conservation Board and the District Court for Water Division 1 (a.k.a. “Water Court”); and WHEREAS, the Participants have negotiated an agreement for Phase II of the multi- phase plan, which agreement is entitled the Memorandum of Agreement for Phase II of the Cache la Poudre River Instream Flow Augmentation Plan, a copy of which is attached as Exhibit “A” (“Agreement for Phase II”); and WHEREAS, other water users and interested entities have expressed interest in contributing to the ISF Augmentation Plan and may desire to participate in the effort by joining the Agreement for Phase II at a later date, which would be to the overall benefit of the City and the Poudre River; and WHEREAS, the Agreement for Phase II calls for the City to contribute $20,000 towards Phase II, which amount has been appropriated for 2018 for instream flow related efforts which is an appropriate use of the City’s General Funds and funds of the Natural Areas Department because this Agreement will further the welfare of the citizens of Fort Collins, further the Natural Areas Department’s conservation efforts, and benefit natural areas along the river; and WHEREAS, proceeding with Phase II will benefit the City and its citizens because it will further the goal of preserving and improving the ecological, environmental, recreational, sociological, and other resources benefitted by Poudre River flows; and WHEREAS, the City’s execution of the Agreement for Phase II is not intended to express support for the proposed Northern Integrated Supply Project (“NISP”) or to change the City’s position with respect to NISP, and the City is not hereby altering or amending its comments on the NISP draft and supplemental draft environmental impact statements, which comments were submitted pursuant to Resolution 2008-082 and Resolution 2015-082; and WHEREAS, the City’s execution of the Agreement for Phase II is not intended to express support for any other project, including the proposed Thornton Pipeline Water Project and the proposed Seaman Water Supply Project, or to change the City’s position with respect to those projects. -3- 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. 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 consistent with this Resolution 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. Section 3. That the City Manager is hereby authorized to execute amendments to such agreement consistent with this Resolution as may be necessary to effectuate the purposes of this Resolution. Passed and adopted on at a regular meeting of the Council of the City of Fort Collins this 18th day of September, A.D. 2018. __________________________________ Mayor ATTEST: _______________________________ City Clerk EXHIBIT A -1- RESOLUTION 2018-088 OF THE COUNCIL OF THE CITY OF FORT COLLINS AUTHORIZING THE CITY MANAGER TO EXECUTE AN AGREEMENT REGARDING THE USE OF CERTAIN WATER RIGHTS OF THE CITY OF FORT COLLINS IN THE PLAN FOR AUGMENTATION FOR INSTREAM FLOW PURPOSES ON THE CACHE LA POUDRE RIVER WHEREAS, the Cache la Poudre River (“Poudre River”) flows through Fort Collins and is a significant amenity to the City, its citizens, and the region; and WHEREAS, the Poudre River is the source of water supply for numerous water users, including the City, such that the majority of Poudre River flows are diverted into canals, ditches, pipelines, reservoirs, and other waterworks; and WHEREAS, such diversions reduce the flows of water through Fort Collins, which has various ecological, environmental, recreational, sociological, and other impacts, some of which are adverse; and WHEREAS, the City desires to enhance Poudre River flows through Fort Collins and in the region while working within the existing legal context, including the prior appropriation doctrine, which is confirmed in Sections 5 and 6 of Article XVI of the Colorado Constitution and the Water Right Determination and Administration Act of 1969, C.R.S. §§37-92-101 et seq.; and WHEREAS, as discussed in Resolution 2016-022 and Resolution 2018-087, the City is pursuing a plan for augmentation for instream flow purposes (“Instream Flow Augmentation Plan”) to enhance and protect additional flows in portions of the Poudre River without adversely impacting or injuring existing adjudicated water rights and existing exchanges; and WHEREAS, the Instream Flow Augmentation Plan needs water rights to be included in it as a source of water to augment stream flows in the Poudre River; and WHEREAS, the City owns the water rights represented by certain shares in the so-called “Southside Ditches” companies on the Poudre River (being the Arthur Irrigation Company, Larimer County Canal No. 2 Irrigating Company, New Mercer Ditch Company, and Warren Lake Reservoir Company) that have been judicially quantified and changed to include augmentation and other uses as set forth in the decrees entered by the District Court for Water Division 1 in Case No. 1992CW129 on April 13, 2005 and in Case No. 2005CW323 on April 23, 2015 (collectively, “Subject Water Rights”); and WHEREAS, the City and the Colorado Water Conservation Board have negotiated an agreement regarding the use of the Subject Water Rights in the Instream Flow Augmentation Plan, which agreement is entitled Agreement Regarding the Use of Certain Water Rights of the City of Fort Collins in the Poudre River Instream Flow Augmentation Plan (Changed “Southside Ditches” Water Rights), a copy of which is attached as Exhibit “A” (“Agreement”), and -2- WHEREAS, under the Agreement and as set forth therein, the City would retain ownership of the Subject Water Rights and would have the right, on a yearly basis, to determine whether to include some or all of them in the Instream Flow Augmentation Plan for that year; and WHEREAS, authorizing the use of the Subject Water Rights in the Instream Flow Augmentation Plan pursuant to the Agreement is in the best interests of, and will benefit the City and its citizens because it will further the goal of preserving and improving the ecological, environmental, recreational, sociological, and other resources benefitted by Poudre River flows, and while imposing few, if any, costs on the City as discussed herein; and WHEREAS, the Subject Water Rights are part of the City’s Water Utility system, but their use under the Agreement will not materially impair the viability of the Water Utility system as a whole and will be for the benefit of the citizens of the City; and WHEREAS, no compensation is to be paid to the City under the Agreement, but that the Agreement would serve a bona fide public purpose because: (1) The use to which the Subject Water Rights will be put under the Agreement promotes health, and general welfare and benefits a significant segment of the citizens of Fort Collins by improving Poudre River flows; (2) The use to which the Subject Water Rights will be put supports one or more of the City Council's goals, adopted policies, projects or plans, many of which seek the improvement of Poudre River flows; (3) The financial support provided by the City through the below-market disposition of the rights in the Subject Water Rights under the Agreement will be leveraged with other funding or assistance from the other participants in the Instream Flow Augmentation Plan, which are also providing water rights and monetary support; (4) The Agreement will not result in any direct financial benefit to any private person or entity, except to the extent such benefit is only an incidental consequence and is not substantial relative to the public purpose being served; and (5) The Agreement will not interfere with current City projects or work programs, hinder workload schedules or divert resources needed for primary City functions or responsibilities; and WHEREAS, the use of the Subject Water Rights under the Agreement will not impose any additional costs on the Water Utility and its ratepayers; and WHEREAS, the City’s execution of the Agreement for Phase II is not intended to express support for the proposed Northern Integrated Supply Project (“NISP”) or to change the City’s position with respect to NISP, and the City is not hereby altering or amending its comments on the NISP draft and supplemental draft environmental impact statements, which comments were submitted pursuant to Resolution 2008-082 and Resolution 2015-082; and -3- WHEREAS, the City’s execution of the Agreement for Phase II is not intended to express support for any other project, including the proposed Thornton Pipeline Water Project and the proposed Seaman Water Supply Project, or to change the City’s position with respect to those projects. 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. That the City Council finds, pursuant to Section 23-111(a) of the City Code, that the disposition of certain rights associated with the Subject Water Rights pursuant to an agreement that is substantially similar to the attached Agreement is in the best interests of the City. Section 3. That the City Council finds, pursuant to Section 23-111(b) of the City Code, that the disposition of certain rights associated with the Subject Water Rights pursuant to an agreement that is substantially similar to the attached Agreement will not materially impair the viability of the water utility system as a whole and that it will be for the benefit of the citizens of the City. Section 4. That the City Council finds, pursuant to Section 23-114, that the disposition of certain rights associated with the Subject Water Rights pursuant to an agreement that is substantially similar to the attached Agreement may be for an amount less than market value, but that it would serve a bona fide public purpose for the reasons set forth above. Section 5. 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 consistent with the terms of this Resolution 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. Section 6. That the City Manager is hereby authorized to execute amendments to such agreement as may be necessary to effectuate the purposes of this Resolution. Passed and adopted on at a regular meeting of the Council of the City of Fort Collins this 18th day of September, A.D. 2018. __________________________________ Mayor ATTEST: _______________________________ City Clerk Page 1 of 8 AGREEMENT REGARDING THE USE OF CERTAIN WATER RIGHTS OF THE CITY OF FORT COLLINS IN THE POUDRE RIVER INSTREAM FLOW AUGMENTATION PLAN (Changed “Southside Ditches” Water Rights) This Agreement Regarding the Use of Certain Water Rights of the City of Fort Collins in the Poudre River Instream Flow Augmentation Plan (“Agreement”) is effective on _____ of _________, 2018, and is entered into by and between the City of Fort Collins, Colorado, a Colorado municipal corporation (“Fort Collins”); and the Colorado Water Conservation Board, an agency of the State of Colorado (“CWCB”). RECITALS A. CWCB, the Colorado Water Trust, and several water users on the Cache La Poudre River including Fort Collins, are seeking judicial approval of a plan for augmentation in order to, among other things, increase the supply of water to the Cache la Poudre River between the canyon mouth and its confluence with the South Platte River to preserve and/or improve the natural environment to a reasonable degree (“Poudre ISF Augmentation Plan”). The Poudre ISF Augmentation Plan will be administered pursuant to the decree approving the Poudre ISF Augmentation Plan and will be implemented and managed pursuant to various contractual arrangements among the CWCB and others. Collectively, the relevant agreements outline a program for the CWCB to protect water, water rights, and interests of water under a decreed plan for augmentation through stream reaches of the Cache La Poudre River from the canyon mouth to its confluence with the South Platte River. B. CWCB is authorized by Section 37-92-102(3), C.R.S. (2017), to acquire from any person, such water, water rights, or interests in water as CWCB determines may be required for instream flows to preserve and/or improve the natural environmental to a reasonable degree, and to take actions to ensure such stream flows remain in the river. C. Fort Collins owns the water rights represented by certain shares in the so-called “Southside Ditches” companies on the Cache la Poudre River (being the Arthur Irrigation Company, Larimer County Canal No. 2 Irrigating Company, New Mercer Ditch Company, and Warren Lake Reservoir Company) that have been judicially quantified and changed to include augmentation and other uses as set forth in the decree entered in Case No. 1992CW129 on April 13, 2005 (“92CW129 Decree”) and the decree entered in Case No. 2005CW323 on April 23, 2015 (“05CW323 Decree”) (collectively, “Water Rights”). D. CWCB desires to use, and Fort Collins desires to allow the CWCB to use, water attributable to the Water Rights for augmentation use in the Poudre ISF Augmentation Plan to increase the supply of water to the Cache la Poudre River to preserve and/or improve the natural environment to a reasonable degree, pursuant to the terms and conditions of this Agreement. EXHIBIT A Page 2 of 8 NOW THEREFORE, in consideration of the mutual and dependent covenants contained herein, the Parties agree as follows: 1. Term. The term of this Agreement is 20 years from the effective date. This Agreement will automatically renew for another 20 years unless terminated hereunder. 2. Available Shares. CWCB’s use of water attributable to the Water Rights under this Agreement shall be limited to water attributable from the “Available Shares” that Fort Collins identifies on an annual basis as discussed herein. Fort Collins shall notify CWCB by April 15 of each year the following: a. The number of shares of each of the Southside Ditches companies under the 92CW129 Decree and the 05CW323 Decree that will be used in that April 15 through April 14 year to generate water for use in the Poudre ISF Augmentation Plan under this Agreement (“Available Shares”). b. An estimation of the amount and timing of water that the Available Shares will generate for use in the Poudre ISF Augmentation Plan. The number and identify of Available Shares shall be as determined under Fort Collins’ sole discretion. CWCB acknowledges that the amount of water available under the Available Shares at any given time will depend on various factors, including hydrological conditions and the call(s) affecting the Water Rights, such that the actual amount of water available cannot be known for certain prior to the anticipated date of use. If the Available Shares are not needed for use in the Poudre ISF Augmentation Plan on any given day pursuant to the terms and conditions of the Poudre ISF Augmentation Plan decree or pursuant to various contractual arrangements among the CWCB and others, Fort Collins reserves the right to use the Available Shares for other uses under the 92CW129 Decree and/or the 05CW323 Decree. If Fort Collins does not identify any Available Shares, there shall be no Available Shares for that April 15 through April 14 year. 3. No Payment. No payment is owed to Fort Collins for the CWCB’s use of water attributable to the Water Rights pursuant to the terms and conditions of this Agreement. However, nothing in this Agreement shall preclude amendments to this Agreement or subsequent agreements concerning the use of the Water Rights in the Poudre ISF Augmentation Plan that may involve payments to Fort Collins. 4. Use of Available Shares by CWCB. Fort Collins shall divert water under the Available Shares at their respective points of diversion (Arthur Ditch, Larimer County Canal No. 2, and the New Mercer Ditch),1 measure, and return to the river 1 As stated in the 92CW129 Decree and the 05CW323 Decree, the point of diversion of the Arthur Ditch is located 200 feet N and 440 feet E of the SW corner of Sec. 34, T8N, R69W, 6th P.M., Larimer County; Page 3 of 8 water attributable to the Available Shares. From that point or points of introduction downstream to the point of diversion of the Fossil Creek Reservoir Inlet Ditch (“FCRID”)2 (the “Reach”), CWCB shall use the Available Shares for augmentation use in the Poudre ISF Augmentation Plan to increase the supply of water to the Cache la Poudre River to preserve and/or improve the natural environmental to a reasonable degree. At the point of diversion of the FCRID, CWCB shall cease using the Available Shares, and all dominion and control over the Available Shares shall return to Fort Collins. 5. Fort Collins’ Emergency Use of Available Shares. In the rare event that there is a water supply emergency necessitating Fort Collins’ use of the Available Shares to supply customers of Fort Collins’ treated water system or other emergency purposes as determined by Fort Collins in its sole discretion, Fort Collins may use the Available Shares for such use and thereby no longer make the water available to the CWCB for use in the Poudre ISF Augmentation Plan, and Fort Collins will provide notice to CWCB as soon as practicable. For the purposes of this provision, a water supply emergency means an extraordinary drought condition or other emergency condition involving the loss of water to its municipal system as a result of catastrophic events (including the failure of conveyance or treatment facilities and natural disasters); provided however, that extraordinary drought conditions or emergency conditions shall be deemed to exist only if Fort Collins has implemented or is in anticipation of implementing a water supply shortage response pursuant to Fort Collins City Code3 and only if Fort Collins has maximized its diversions water under all direct flow water rights other than the Available Shares that are available for municipal use during such conditions. 6. Return Flows. Fort Collins shall be responsible for any return flow obligations under the 92CW129 Decree and/or the 05CW323 Decree. 7. Transit Losses. Fort Collins shall bear any transit losses imposed by the Division of Water Resources as a result of CWCB’s use of the Water Rights within the Reach. 8. Administration. The Parties will coordinate on the administration of the Available Water through the Reach and installation of any measuring devices deemed necessary by the Division Engineer to administer this Agreement. the point of diversion of the Larimer County Canal No. 2 (which is also used to fill Warren Lake) is located 70 feet N and 295 feet E of the SW corner of Sec. 29, T8N, R69W, 6th P.M., Larimer County; and the point of diversion of the New Mercer Ditch is located70 feet N and 295 feet E of the SW corner of Sec. 29, T8N, R69W, 6th P.M., Larimer County. 2 As stated in the 92CW129 Decree and the 05CW323 Decree, the point of diversion of the FCRID is located 85 feet W and 2600 feet N of the SE corner of Sec. 20, T7N, R68W, 6th P.M., Larimer County. 3 The current Fort Collins City Code provisions regarding water supply shortage response and emergency restrictions are set forth in the Fort Collins City Code, Chapter 26, Article III, Division 6 (Water Conservation), Sections 26-167 and 26-168. Page 4 of 8 9. Accounting/Reporting. The Parties agree to coordinate on accounting and reporting each year. Fort Collins shall be responsible for any accounting and reporting required under the 92CW129 Decree and/or the 05CW323 Decree. The responsibility for any accounting and reporting required under the decree approving the Poudre ISF Augmentation Plan shall be determined pursuant to the terms and conditions of the Poudre ISF Augmentation Plan decree or pursuant to various contractual arrangements among the CWCB and others. 10. Share Assessments. Fort Collins shall remain responsible for paying the assessments on all Available Shares, and any other shares representing the Water Rights. Except as expressly provided for herein, CWCB shall acquire no ownership interest in the Water Rights and Available Shares. 11. Termination. At the end of the 20-year term of this Agreement either Party may decide to not renew this Agreement for any reason, and the Agreement will terminate upon written notice to the other Party pursuant to Paragraph 12. Fort Collins may terminate this Agreement at any time it reasonably believes its Water Rights are at risk or if the District Court for Water Division 1 or the Colorado Supreme Court denies the issuance of a decree for the Poudre ISF Augmentation Plan, by providing written notice to CWCB pursuant to Paragraph 12. CWCB may terminate this Agreement if the Poudre ISF Augmentation Plan application is dismissed or withdrawn from Water Court or if the plan is not otherwise implemented or operated upon written notice to Fort Collins pursuant to Paragraph 12. 12. Notice. All notices or other communications hereunder shall be sufficiently given and shall be deemed given when personally delivered, sent by U.S. Mail, or via email, addressed as follows: To Fort Collins: City Manager City Hall West 300 LaPorte Avenue; P.O. Box 580 Fort Collins, Colorado 80522-0580 With copy to: Fort Collins City Attorney 300 LaPorte Avenue; P.O. Box 580 Fort Collins, Colorado 80522-0580 epotyondy@fcgov.com and: Fort Collins Utilities Attn: Water Resources Manager 700 Wood Street P.O. Box 580 Fort Collins, Colorado 80522-0580 ddustin@fcgov.com and: Natural Areas Department Page 5 of 8 745 Hoffman Mill Road Fort Collins, Colorado 80524 jstokes@fcgov.com; dfiggs@fcgov.com To: CWCB Chief, Stream and Lake Protection Section Colorado Water Conservation Board 1313 Sherman Street, Room 718 Denver, CO 80203 DNR_CWCBISF@state.co.us With copy to: Office of the Attorney General Water Conservation Unit 1300 Broadway, 7th Floor Denver, CO 80220 The Parties may update the above contact information and addresses by providing notice of the new contact information and addresses pursuant to this paragraph. 13. Amendments. This Agreement may be amended only upon the execution by each Party of a written amendment to this Agreement. 14. Attorney’s Fees. If a suit, action, or alternative dispute resolution is instituted in connection with any controversy arising out of this Agreement or to enforce any rights hereunder, the Parties shall bear their own costs and fees associated with such proceeding. 15. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado. 16. No Waiver of CGIA. No term or condition of this Agreement shall be construed or interpreted as a waiver, express or implied, of any of the immunities, rights, benefits, protections, or other provisions, of the Colorado Governmental Immunity Act, C.R.S. §24-10-101 et seq., as applicable now or hereafter amended. 17. No Third Party Beneficiaries. This Agreement does not and is not intended to confer any rights or remedies upon any person or entity other than the Parties. 18. Fiscal Contingency. Notwithstanding any other provisions of this Agreement to the contrary, the obligations of the Parties in fiscal years after the fiscal year of this Agreement shall be subject to appropriation of funds sufficient and intended therefor, with the Party having the sole discretion to determine whether the subject funds are sufficient and intended for use under this Agreement, and the failure Page 6 of 8 of the Party to appropriate such funds shall be grounds for the Party to terminate this Agreement with written notice pursuant to Paragraph 12. 19. No Waiver. Failure of either Party at any time to require performance of any provision of this Agreement does not limit such Party’s right to enforce such provision, nor does any waiver of any breach of any provision this Lease constitute a waiver of any succeeding breach of such provision or a waiver of such provision itself. 20. Complete Agreement. This Agreement contains the entire agreement and understanding of the Parties and all prior negotiations, discussions, or agreements related thereto are merged herein. 21. Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable, such invalidity, illegality or unenforceability does not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision. Executed as of the date first set forth above. [Remainder of Page Left Blank Intentionally] Page 7 of 8 CITY OF FORT COLLINS, COLORADO, a Colorado municipal corporation By: Date: Darin A. Atteberry, City Manager ATTEST: By: ____________________________________ City Clerk’s Office Printed Name: Title: APPROVED AS TO LEGAL FORM: By: ______________________________________ City Attorney’s Office Printed Name: Eric R. Potyondy Title: Assistant City Attorney [Remainder of Page Left Blank Intentionally] Page 8 of 8 COLORADO WATER CONSERVATION BOARD, an agency of the STATE OF COLORADO By: ________________________________________ ATTEST: By: _______________________________________ [Remainder of Page Left Blank Intentionally]