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 the Town of Castle Rock/Roxborough Water and Sanitation District 2021 Water Lease Agreement
Body
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Executive Summary
Castle Rock Water is seeking Town Council approval of a resolution (Attachment A) for the renewal of a Water Lease Agreement with Roxborough Water and Sanitation District (Roxborough). This is a mutually beneficial agreement to more efficiently use water supplies owned by Roxborough and Castle Rock. It will provide Castle Rock with access to additional water supply during peak irrigation season in exchange for some of Castle Rock’s reusable water. Roxborough owns a total of 423.7 acre-feet (AF) of Denver Basin groundwater rights in the Dawson, Denver, and Arapahoe Aquifers, collectively known as Bell Mountain Ground Water on the Bell Mountain property just south of the Town limits. As part of a mutual agreement between Castle Rock Water and Roxborough, Castle Rock Water will pump the Bell Mountain Ground Water and capture this water at the Town’s CR-1 diversion in exchange for a like amount of the Town’s fully reusable surplus water downstream in Sedalia at the Town’s Plum Creek Diversion, for a discounted rate. We have agreed to provide a reduced rate to Roxborough of $42.50/AF for the Dawson, $96.33/AF for the Denver, and $177.93/AF for the Arapahoe, for like quantities of their Bell Mountain Ground Water pumped by Castle Rock Water. If Castle Rock does not pump Bell Mountain groundwater, Roxborough will pay $340/AF for our treated surplus effluent water. The agreement is non-exclusive, so the Town would be able to lease additional surplus supplies to other interested parties. The agreement will terminate at the end of 2021.
History of Past Town Council, Boards & Commissions, or Other Discussions
On March 27, 2019, Castle Rock Water Commission unanimously voted to recommend Council approval of this agreement.
On April 16, 2019, Town Council approved Resolution 2019-044, for the Water Lease Agreement between Castle Rock Water and Roxborough through December 31, 2019.
On January 22, 2020, Castle Rock Water Commission recommended Town Council approve this agreement.
On February 4, 2020, Town Council approved Resolution 2020-015, for the Water Lease Agreement between Castle Rock Water and Roxborough through December 31, 2020.
Castle Rock Water Commission was presented this lease agreement at the scheduled December 9, 2020 meeting. Castle Rock Water Commission voted unanimously in favor of recommending Town Council approval of this agreement.
Discussion
As part of the United Purchase in 2017, Castle Rock Water acquired 133.8 AF in Bell Mountain in the Denver aquifer and agreed to operate and maintain the three Bell Mountain wells for both Roxborough Water and Sanitation District and the Town of Lochbuie. Roxborough owns 136.5 AF/year in the Dawson Aquifer, 129.8 AF/year in the Denver Aquifer, and 157.7 AF/year in the Arapahoe Aquifer. Under our Water Supply Agreement, Roxborough can request water to be pumped within the above limits at each of the Bell Mountain wells for release into East Plum Creek roughly 16 miles upstream from the Town’s Plum Creek Diversion in Sedalia. This water is used by Roxborough to provide irrigation water to Ravenna Golf Course. By renewing this Water Lease Agreement in 2021, Roxborough is able to save 16 miles of stream loses that would have to be incurred by taking Bell Mountain Ground Water in exchange for Castle Rock Water’s fully reusable effluent. In return, Castle Rock Water is able to utilize Bell Mountain Ground Water that can be captured at CR-1 for treatment at Plum Creek Water Purification Facility (PCWPF) and then delivered into the Town’s distribution system. Operating in this fashion can prove to be beneficial to the Town during periods of high water demand and low native stream flows.
The key terms of the 2021 Water Lease Agreement are summarized below:
• The use of Roxborough’s Bell Mountain Ground Water by Castle Rock Water is at Castle Rock Water’s sole discretion, with 48-hour notice.
• Roxborough will be leasing some reusable supplies in exchange for Bell Mountain Ground Water that Castle Rock Water will capture at CR-1.
• Roxborough can lease like quantities of Castle Rock’s reusable effluent equal to Bell Mountain Groundwater up to the amounts below for the prices shown
o 136.5 AF of water from the Dawson Aquifer at a rate of $42.50/AF;
o 129.8 AF of water from the Denver Aquifer at a rate of $96.33/AF; and
o 157.7 AF of water from the Arapahoe Aquifer at a rate of $177.93/AF.
• The Town will pay all electrical costs if the Town is the only user of Bell Mountain Ground Water. Otherwise, the Town will pay the pro-rata share of electrical costs for pumping the Bell Mountain Ground Water.
• Roxborough will bear the costs of diversion, transmission, and utilization of surplus water taken at the Plum Creek Diversion.
• Roxborough can lease additional reusable effluent as it is available at Castle Rock’s sole discretion for $340/AF
• Agreement will terminate December 31, 2021.
The benefit of the lease agreement is that it provides the Town an additional water source during peak summer demands. In 2020, the Town was able to utilize this agreement and pump 186.16 AF of Roxborough’s proportionate share in all three Bell Mountain Wells, which supplemented the Town’s water supply during the hot and dry summer months.
For 2021, the Town has reevaluated its base lease rate for reusable effluent. The Town had been leasing water for a minimum of $300 per acre-foot starting in June 2015 and had not increased that rate since that time. Based on the Consumer Price Index from June 2015 to September 2020, this translated into a 13.1% increase. Thus, the Town will now set its base reusable effluent lease rate at $340 per acre-foot.
Budget Impact
If Council approves the agreement, Castle Rock Water could receive up to $46,365 in additional revenue in 2021. The revenue will be deposited into the Water Resources Fund Capital Leases account 211-4375-393.70-00.
Staff Recommendation
Staff and Water Commission recommend approval of the resolution as presented.
Proposed Motion
“I move to approve the Resolution as introduced by title.”
Attachments
Attachment A: Resolution
Exhibit 1: Lease Agreement