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File #: RES 2022-097    Version: 1 Name:
Type: Resolution Status: Consent Calendar
File created: 8/3/2022 In control: Town Council
On agenda: 9/6/2022 Final action:
Title: Resolution Approving the 2022 Spot Water Lease Agreement Between the Town of Castle Rock and the Chatfield East Property Owners Association, Inc. [Chatfield Reservoir, Douglas and Jefferson Counties]
Attachments: 1. Attachment A: Resolution, 2. Exhibit 1: Chatfield East Spot Lease 2022-2023 Final
Related files: WC 2022-069

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



Resolution Approving the 2022 Spot Water Lease Agreement Between the Town of Castle Rock and the Chatfield East Property Owners Association, Inc. [Chatfield Reservoir, Douglas and Jefferson Counties]




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 (SWSP).  The leased water will be used by Chatfield East POA to replace any Denver Aquifer well depletions that they have from Plum Creek in 2022 and 2023. 


If Council approves this lease, up to 21.045 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 1, 2022 and October 31, 2023.  The Town will assess a $355 per acre-foot (AF) price for the water.  The initial payment of the 21.045 AF lease 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 $7,470.98.  The agreement will terminate at the end of 2023.


History of Past Town Council, Boards & Commissions, or Other Discussions


On October 27, 2021, Castle Rock Water Commission recommended Town Council approval of the 2021 Spot Water Lease with Chatfield East POA.


On November 16, 2021, Town Council approved the 2021 Spot Water Lease with Chatfield East POA.


Castle Rock Water staff presented this item to the Castle Rock Water Commission at their meeting held on August 31, 2022, and the Castle Rock Water Commission voted unanimously (7 to 0) to recommend Town Council approve the Resolution as presented.




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.










The Town currently owns 719 AF of storage space in Chatfield Reservoir and plans to eventually reach 2,000 AF of storage by 2031.  As part of the option agreement the Town has with CWCB, the Town will purchase blocks of storage over the next 10 years.  The Town recently purchased 129 AF in 2022, bringing the Town’s total storage to 719 AF.  The Town will then have two deferrals remaining until the full storage space is realized within the 10-year period.


As mentioned in the Executive Summary, the Town has been able to store excess supplies in Chatfield Reservoir over the past year, which have exceeded the purchased storage amounts (719 AF).  Since the Town does not physically have a way to utilize these excess storage supplies at this point in time, CWCB has developed, and Town Council has approved, a lease agreement with the Town to lease the optioned storage space for $50/AF.  With a current annual lease rate for 1,281 AF (2,000 AF minus 719 AF), the Town will pay the State $64,050 in 2022.  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 $7,470.98 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   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).”




Attachment A:                      Resolution

Exhibit 1:                                           Agreement