To: Members of the Castle Rock Water Commission
From: Mark Marlowe, P.E., Director of Castle Rock Water
Matt Beank, P.E., Water Resources Manager
Lauren Moore, Water Resources Program Analyst
Title
Resolution Approving the 2021 Town of Castle Rock/Chatfield East Property Owners Association Spot Water Lease Agreement [Chatfield Reservoir, Douglas County]
Town Council Agenda Date: November 17, 2021
Body
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Executive Summary
Castle Rock Water is seeking Town Council approval of a resolution (Attachment A) for a spot water lease with Chatfield East Property Owners Association (Chatfield East POA). As the Town is not currently able to fully utilize excess storage supplies in Chatfield, Chatfield East POA wishes to lease some of the Town’s surplus water stored in Chatfield Reservoir for use in their Substitute Water Supply Plan (Exhibit 1). The leased water will be used by Chatfield East POA to replace any Denver Aquifer well depletions that they have from Plum Creek in 2021 and 2022.
If Council approves this lease, up to 32.082 acre feet (AF) of water would be released from the Town’s Chatfield Reservoir storage into the main stem of the South Platte River. This release would occur between November 2, 2021 and December 31, 2022. The Town will assess a $340 per AF price for the water and a $2,500 lease development fee. The initial payment of the 32.082 AF lease and lease development fee will be required upon approval of this lease, with any remaining unused quantity refunded at the end of each year. The potential revenue for this lease is up to $13,407.88. The agreement will terminate at the end of 2022.
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 three years the Town has generated over $130,000 by leasing idle water rights to downstream users (see table 1 below) and continues to do so in 2021. 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 three years.
|
2018 |
2019 |
2020 |
|
$29,019.13 |
$30,606.65 |
$70,699.75 |
To date in 2021, Castle Rock Water has earned $160,689.85 in lease revenue from water rights. The Town currently owns 590 AF of storage space in Chatfield Reservoir and plans to purchase an additional 129 AF of storage in 2022, for a total of 719 AF of storage capacity by next year. Additionally, the Town has an agreement with the Colorado Water Conservation Board (CWCB) to lease the remaining optioned storage space (1,410 AF in 2021; 1,281 AF in 2022), allowing for up to 2,000 AF of storage. The Town currently has 1,531 AF of surplus water stored in Chatfield Reservoir. The spot lease with Chatfield East POA would allow the Town to further maximize storage space within the reservoir and will help to cover the annual lease option of storage space with CWCB.
Budget Impact
If Council approves the agreement, Castle Rock Water would receive up to $13,407.88 of additional revenue in 2022. 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”.
Attachments
Attachment A: Resolution (Not Attached)
Exhibit 1: Agreement