To: Honorable Mayor and Members of Town Council
Through: David L. Corliss, Town Manager
From: Mark Marlowe, P.E., Director of Castle Rock Water
Matt Benak, P.E., Water Resources Manager
Lauren Moore, Water Resources Program Analyst
Title
Resolution Approving a Water Lease Agreement Between the Town of Castle Rock and Sublette, Inc. [Rothe/Sublette Recharge Project, Weld County, CO]
Body
________________________________________________________________________________
Executive Summary
Castle Rock Water is seeking Town Council approval of a resolution (Attachment A) for a water lease with Sublette, Inc. (Sublette). Sublette is interested in leasing a portion of Castle Rock’s Recharge Credits associated with Rothe-Sublette Recharge Project located in eastern Weld County, just north of the South Platte River. Castle Rock is currently leasing 325.4 acre-feet (AF) of these credits to the Town of Wiggins in 2022, Colorado, however, there are approximately 400 AF of recharge credits that are currently unused. Due to the dry summer and fall in 2021, and the low diversion and recharge amounts so far in 2022, Sublette intends to use a portion of these credits to offset some of their agricultural depletions from crop production.
If Council approves this lease, up to 400 AF of recharge credits will be leased to Sublette at the rate of $36.50 per AF which is the current agricultural leasing price that the Town has established with other agricultural entities.
History of Past Town Council, Boards & Commissions, or Other Discussions
On April 28, 2021, Castle Rock Water Commission recommended Town Council approval of the 2021 Spot Water Lease with Sublette, Inc.
On May 4, 2021, Town Council approved the 2021 Spot Water Lease with Sublette, Inc.
On May 25, 2022, Castle Rock Water Commission unanimously (5-0) recommended Town Council approval of the 2022 Spot Water Lease with Sublette, Inc.
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 four years the Town has generated over $630,000 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 four years.
|
2018 |
2019 |
2020 |
2021 |
|
$29,019.13 |
$30,606.65 |
$70,699.75 |
$499,449.73 |
The general concept of the Rothe-Sublette Recharge Project is that water can be diverted from the South Platte River at the Riverside Canal which is located east of Greeley under a water right with an effective 1988 priority date. This water is delivered from the Riverside Canal into several recharge ponds which then makes its way through the alluvial sands as groundwater return flow to the South Platte River. The hydrogeologic transport of this water through the alluvium takes a number of years. The decree in Colorado Water Court Case No. 89CW027 defines the terms and conditions for operation of this project, including the specific timing of the recharge credits.
The Town’s portion of the project includes up to the first 770 acre-feet per year of recharge credits. The Town is currently leasing 325.4 AF to the Town of Wiggins for augmentation of several municipal supply wells. Approximately 400 AF of additional recharge credits are available for use in 2022 and a partner in the Rothe-Sublette Recharge Project (Sublette, Inc.) has expressed interest in leasing these excess credits for 2022.
Budget Impact
If Council approves the agreement, Castle Rock Water would receive $14,600 in additional revenue in 2022 from Sublette. The revenue will be deposited into the Water Resources Fund Capital Leases account 211-4375-393.70-00.
Staff Recommendation
Staff recommends approval of the resolution as presented.
Proposed Motion
“I move to approve the resolution as introduced by title”.
Alternative Motions
“I move to approve the resolution as introduced by title, with the following conditions: (list conditions).
“I move to continue this item to the Town Council meeting on _____ date to allow additional time to (list information needed).”
Attachments
Attachment A: Resolution
Exhibit 1: Agreement