To: Members of the Castle Rock Water Commission
From: Mark Marlowe, P.E., Director of Castle Rock Water
Matt Benak, P.E., Water Resources Manager
Lauren Moore, Water Resources Project Manager
Title
Resolution Approving the 2023 town of Castle Rock/Colorado Parks & Wildlife Spot Water Lease Agreement [Chatfield Reservoir, Douglas County]
Town Council Agenda Date: May 2, 2023
Body
________________________________________________________________________________
Executive Summary
Castle Rock Water is seeking Town Council approval of a resolution (Attachment A) for a spot water lease with Colorado Parks & Wildlife (CPW). While the Town currently owns 719 acre-feet (AF) of storage in Chatfield, the Colorado Water Conservation Board (CWCB) allows for rental of the remaining permitted amount, for a total of 2,000 AF of storage. The Town currently has upwards of 430 AF of water stored in the reservoir with additional reusable supplies coming in each day. In anticipation of drought conditions this summer, CPW wishes to lease some of the Town’s surplus water stored in Chatfield Reservoir to fill the hatchery settling ponds as well as the Dog Off Leash Area ponds located within Chatfield’s recreation area.
Under this agreement, up to 200 AF of water will be released from the Town’s Chatfield Reservoir storage account directly into the fish hatchery pond gate and/or a book over to CWP’s Chatfield Storage will occur. This release would occur between May 3 and December 31, 2023. The Town will assess a $385 per AF price for the water, with payment due upon total quantity released. The potential revenue for this lease is up to $77,000. The agreement will terminate at the end of 2023.
History of Past Town Council, Boards & Commissions, or Other Discussions
Castle Rock Water Commission will be informed of the project at their March 28, 2021 meeting.
On April 6, 2021 Town Council approved a spot water lease with CPW.
Discussion
Castle Rock Water has a strategic goal to strive to maintain sustainable rates and fees, and demonstrate fiscal responsibility, accountability, and transparency. One of the tactics to achieve this goal is to maximize leasing opportunities for idle water rights. Over the past five years, the Town has generated over $1.2 million by leasing idle water rights to downstream users (see Table 1 below). Until these water rights can be fully utilized by the Town, Staff will continue to seek out users that can put these rights to beneficial use.
Table 1. Revenue generated from leasing idle water rights to downstream users over the past five years.
|
2018 |
2019 |
2020 |
2021 |
2022 |
|
$29,019.13 |
$30,606.65 |
$70,699.75 |
$499,449.73 |
$531,292.81 |
The Town currently owns 719 AF of storage space in Chatfield Reservoir and plans to eventually reach 2,000 AF of storage by 2031. As part of the option agreement the Town has with CWCB, the Town will purchase blocks of storage over the next 10 years. The Town recently purchased 129 AF in 2022, bringing the Town’s total storage to 719 AF. The Town has one deferral year remaining until the full storage space is realized within the 10-year period.
The Town has been able to store excess supplies in Chatfield Reservoir over the past year, which have exceeded the purchased storage amounts (719 AF). Since the Town does not physically have a way to utilize these excess storage supplies at this point in time, CWCB has developed, and Town Council has approved, a lease agreement with the Town to lease the optioned storage space. With a current annual lease rate of $50/AF for 1,281 AF (2,000 AF minus 719 AF), the Town will pay the State $64,050 in 2023.
This spot lease with CPW will allow the Town to further maximize storage space within the reservoir and in addition to other similar leases, will help to cover the annual lease option of storage space with CWCB.
Budget Impact
Castle Rock Water will receive up to $77,000 of additional revenue in 2023 through this agreement. The revenue will be deposited into the Water Resources Fund Capital Leases account 211-4375-393.70-00.
Proposed Motion
“I move to recommend to Town Council approval of ___________________ as presented”
Attachments
Attachment A: Resolution (Not Attached)
Exhibit 1: Agreement