To: Honorable Mayor and Members of Town Council
From: Mark Marlowe, P.E., Utilities Director
Title
Resolution: Approving the Town of Castle Rock/Ravenna Metropolitan District Spot Water Lease Agreement
Body
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Executive Summary
The Utilities Department is seeking Town Council approval of a resolution (Attachment A) for a spot water lease with Ravenna Metropolitan District. Ravenna provides water service to the Ravenna residential area located near the mouth of Waterton Canyon, in northwestern Douglas County. Ravenna asked to lease the Town’s surplus reusable water supplies along Plum Creek, which are treated at the Plum Creek Water Reclamation Authority (PCWRA) and released back to the stream. The Town releases roughly 270 acre-feet (AF) per month of fully-consumable water from the PCWRA plant. Until the Plum Creek Diversion is constructed or until the Chatfield Reallocation Project is cleared to allow storage, the Town does not have a good way to use this reusable water supply. Thus, leasing this water to other parties downstream is a good option and provides an income stream for the Water Resources Enterprise. We have agreed to a $300/AF price for the water, and Ravenna is asking for up to 200 AF of water for 2016. The agreement is non-exclusive, so the Town would be able to lease additional surplus supplies to other interested parties. The agreement is for a one-year term.
History of Past Town Council, Boards & Commissions, or Other Discussions
On December 9, 2015, the Utilities Commission unanimously recommended Council approve the draft lease agreement.
Discussion
Until June 2015, the Town had an exclusive effluent lease agreement with Centennial Water & Sanitation District which was set up in 2001. The leasing costs were never modified to meet market demand and could not be modified without terminating the lease agreement. In June 2015, the Town terminated the lease with Centennial Water & Sanitation District and marketed the supply to the area water providers. Over the past several months, two water providers expressed interest in the water but only Ravenna has moved forward with an agreement.
The key terms of the agreement are summarized below:
• Ravenna will be leasing excess reusable supplies that the Town cannot currently capture for reuse.
• One year lease agreement.
• Ravenna will lease up to 200 AF of water through August 2016 at a rate of $300/AF.
• Point of delivery measurement is at PCWRA. Ravenna will be responsible for any stream transient losses incurred to the delivery quantity.
The benefit of the lease agreement is that it generates revenue for the Utilities Department that wouldn’t otherwise be obtained if the water continued to flow down Plum Creek to the South Platte. Arrangements like this support the Colorado Water Plan by developing regional cooperation between other water providers and creating ways to utilize existing supplies within the state.
Budget Impact
If Council approves the agreement, Utilities would receive up to $60,000 in revenue in 2016. The revenue will be deposited into Water Resources Fund Capital Leases account 211-4375-393.70-00.
Staff Recommendation
Staff recommends approval of the spot water lease agreement with Ravenna Metropolitan District for 200 acre-feet of water which will generate a revenue of up to $60,000.
Proposed Motion
I move to approve a Resolution Approving the Town of Castle Rock/Ravenna Metropolitan District Spot Water Lease Agreement.
Attachments
Attachment A: Resolution
Exhibit 1: Lease Agreement