To: Honorable Mayor and Members of Town Council
From: Mark Marlowe, P.E., Director of Castle Rock Water
Title
Ordinance Amending Chapter 4.04 of the Castle Rock Municipal Code Requiring the Dedication of Renewable Water Resources at the Time of Annexation (Second Reading)
Body
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Executive Summary
The purpose of this memorandum is to request Council approval of the Ordinance (see Attachment A) amending Chapter 4.04 of the Castle Rock Municipal Code requiring a plan to ensure renewable water resources at the time of annexation on first reading. This section of the code deals with the requirements for dedication of water rights for new proposed annexations. Currently, the code allows annexation if adequate Denver Basin groundwater rights are available. The code also provides for exceptions to those requirements for proposed annexations which are deemed to be of an “exceptional” nature. One of the ways a proposed annexation can be deemed “exceptional” under the current code is to prepare a Water Efficiency Plan for the area to be annexed. Given the importance of water conservation and efficiency to the long term renewable water plan for the Town, it is important that water efficiency plans be required for new annexations as opposed to an option that makes the annexations exceptional.
The code does not address any requirements for renewable water for proposed annexations beyond the normal payment of the Water Resources Fee as is required for existing entitlements in the Town. The problem with this is that new annexations are not currently included in the long term renewable water plan for the Town which seeks to ensure that the Town’s water supplies are 75 percent renewable by 2050. In other words, the amount of renewable water the Town is currently developing does not account for additional annexations. This means any new annexations will reduce the percent of the Town’s supplies that are renewable in 2050 unless the Town creates plans to develop more renewable water, requires the annexor to ensure a plan is in place for renewable water for the property to be annexed, or require the annexor to reduce the current amount of renewable water needed by the Town to meet its 2050 plan target.
The proposed Code changes will require Water Efficiency Plans for all new annexations regardless of any other conditions of annexation and regardless of whether the proposed annexation is determined to be exceptional due to preservation of open space, landforms or vistas of community-wide significance or interest; significant primary employment generation; or enhanced urban design and community amenities and aesthetics. In addition, a change to Code is proposed that requires any annexation to meet renewable water needs for the annexation through one of three options. The first option would require renewable water projects to be in place or planned for future development with an identified source of funding that can provide 100 percent renewable water to the proposed annexation by the time the proposed annexation is annexed and developed to build out. It is important to understand that the intent of this option is for the annexor to work with Castle Rock Water to find a project or project modification that would be consistent with Castle Rock Water’s current long term renewable water plans. The second option allows a potential annexor to reduce the current long term renewable water requirements by reducing existing entitlements. Castle Rock Water has worked with the development community to create a way to transfer development rights which allows for a potential annexor to reduce long term renewable water needs while proceeding on their annexation. This option is detailed in proposed change to Municipal Code Title 17 and 20 (see Attachment B). The third option is drying up irrigated land. Additional work is being done to develop a method for dry up of currently irrigated areas.
Staff recommends approval of the proposed changes to Title 4.04 on first reading. In addition to and part of the changes to Title 4.04, a minor amendment to the 2016 Water Resources Strategic Master Plan is required. Staff is requesting approval of this amendment to the WRSMP in the Resolution provided in Attachment C.
Notification and Outreach Efforts
On October 24, 2017, November 15, 2017 and December 7, 2017, staff presented these changes to the Developer’s Roundtable.
At the December 7, 2017, meeting of the developer’s roundtable, a water subcommittee was formed with members of the Economic Development Council to study the proposed code change and identify options and tools for potential annexors. The first subcommittee meeting was held on January 10, 2018.
On February 21, 2018, an update on the progress of the EDC Subcommittee was provided at the Developer’s Roundtable.
A second EDC water subcommittee meeting was held on March 30, 2018. The subcommittee was supportive of proceeding with the proposed changes to Title 4.04 and Title 20 as presented.
History of Past Town Council, Boards & Commissions, or Other Discussions
On September 27, 2017 and October 25, 2017, staff made presentations to the Castle Rock Water Commission. The Commission was very supportive of the proposed changes.
On November 7, 2017 a presentation was made to Council, and staff received direction to proceed with an ordinance.
On November 9, 2017, staff presented these proposed changes to the Planning Commission. Planning Commission was very supportive of the proposed changes.
On November 15, 2017, Castle Rock Water Commission recommended Council approve the proposed changes to Title 4.04 of the Code as presented by staff.
On December 13, 2017 and January 24, 2018, staff presented updates to the Castle Rock Commission.
On February 28, 2018, staff provided an update on the proposed changes to Title 4, and is looking into entitlements, SmartScape and other options to reduce water demands to allow annexations.
On March 28, 2018, staff provided additional information about the status of the proposed changes to Title 4.04 and Title 20.
On April 25, 2018, staff presented this ordinance to the Castle Rock Water Commission, and they unanimously recommended Council approve this ordinance and the ordinance for Title 17 and 20, as presented.
Discussion
Staff prepared an update to the Water Resources Strategic Master Plan in 2016. The plan revisions address long-term water plans for the Town based on a host of scenarios associated with current entitlements that may occur in the future. A summary of those scenarios is provided below:
Castle Rock Water has been planning renewable water for these various scenarios by developing a host of long-term water projects. Current projects do not account for additional annexations or entitlements. Certain infill or enclave annexations and annexations that have been in process have been contemplated in the planning and these projects would not be subject to these changes except for annexations that have been in process. If these annexations are not completed by December 31, 2020, they will become subject to the changes. Attachment D is a figure that shows the areas currently addressed as a part of Castle Rock Water’s long term planning. This figure will be incorporated by amendment into Castle Rock Water’s Water Resources Strategic Master Plan (WRSMP) (see Attachment C). Still, additional analysis will need to be performed by Castle Rock Water for these annexations that are in process as well to ensure adequate long-term renewable water supplies are in place. Attachment E is an update to the entitlements/commitments for which Castle Rock Water currently needs to provide renewable water. As we go forward with additional annexations and/or entitlements, it is critical that projects be in place to provide for long-term renewable water.
Since this item was presented to Council in November, 2017 additional changes have been made to the proposed code section including addition of a time limit (December 31, 2020) on the exemption for existing annexation applications and infill annexations. Further, a section on verifiable dry up of irrigable land by a potential annexor as an option to meet the renewable water requirements has been added.
Castle Rock Water has been meeting with a subcommittee of the Economic Development Council (EDC) to work on options for potential annexors to meet the spirit and intent of the proposed code change. Three options have been identified. The first option is to work with Castle Rock Water to provide renewable water for the annexation. The second option is the concept of transferable development rights which would allow a potential annexor to purchase or otherwise acquire enough existing development rights from another developer with existing entitlements to meet the needs of the annexation and at the same time reducing the total entitlements the Town is committed to serve. This concept requires new code, and a draft of code that would provide the mechanism for this idea is included as Attachment B. This concept also would necessitate that there are some existing development entitlements that might be available for purchase or acquisition. Castle Rock Water has worked internally with our Development Services Department to review existing entitlements and update the long term commitments of the Town in terms of water service. This update does provide some indication that there may be some entitlements available for acquisition or even retirement through other means. A copy of the updated list and planning information is provided as Attachment E.
The third option is the concept of drying up existing irrigated land by allowing the annexor to pay for this dry up and create beautiful Coloradoscapes that do not use water or use limited water. There is more work to do on this idea, but the option has been incorporated into the draft code changes to Title 4 as discussed previously in this memo.
Budget Impact
There is no immediate budget impact associated with the proposed changes to Code. If future renewable water projects are identified to address annexations, there may be budget implications. These will be addressed, if and when, projects are identified.
Staff Recommendation
Staff and Castle Rock Water Commission recommend approval of the ordinance as presented.
Proposed Motion
“I move to approve the ordinance as introduced by title”.
Attachments
Attachment A: Ordinance Title 4.04
Attachment B: Ordinance Title 17 and 20
Attachment C: Resolution amending WRSMP
Attachment D: Figure 3.3
Attachment E: Entitlement summary