To: Honorable Mayor and Members of Town Council
Through: David L. Corliss, Town Manager
From: Mark Marlowe, P.E., Director of Castle Rock Water
Lauren Moore, Water Resources Manager
Zuzana Howard, Water Resources Program Analyst
Title
Resolution Approving the 2027 Spot Water Lease Between the Town of Castle Rock and Dakan Ranch II LLC
Body
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Executive Summary
Castle Rock Water (CRW) is seeking Town Council approval of a resolution (Attachment A) for a spot water lease agreement (Exhibit 1) with Dakan Ranch II, LLC (Dakan Ranch). Dakan Ranch wishes to fill its pond located along Dry Gulch (tributary to Spring Creek, which is tributary to West Plum Creek, which intersects East Plum Creek at Sedalia). The Division of Water Resources will have to approve the administrative exchange of the Town’s fully reusable effluent between the Dakan Ranch Pond and the outfall of Plum Creek Water Reclamation Authority (PCWRA). The distance between PCWRA outfall and the Dakan Ranch’s diversion is approximately 19.2 miles.
If Council approves this lease, up to 100-acre feet (AF) of the Town’s fully reusable effluent water would be released from the PCWRA outfall to East Plum Creek. This exchange would occur between January 1, 2027, and December 31, 2027. The Town will charge a $564 per acre foot (AF) fee for the water. The 2027 lease rate was increased from $420 per AF to remain competitive with lease rates currently charged by other local entities in the area. An initial payment of $2,500 for the lease development fee and $5,640 for the minimum of 10 AF will be required within 30 days from approval of this lease. The remaining quantity will be paid upon subsequent releases. The potential revenue for this lease is up to $58,900. CRW will have adequate water supplies available to satisfy this lease commitment without impacting service to existing customers.
Budget Impact
If Council approves the agreement, Castle Rock Water would potentially receive up to $58,900 of additional revenue in 2027. 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
Staff Report
Attachment A: Resolution
Exhibit 1: Agreement