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File #: RES 2022-098    Version: 1 Name:
Type: Resolution Status: Consent Calendar
File created: 8/26/2022 In control: Town Council
On agenda: 9/6/2022 Final action:
Title: Resolution Approving the First Amendment to the Water Rights Lease with Turnpike, LLC [Weld County, CO]
Attachments: 1. Attachment A: Resolution, 2. Exhibit 1: 2022 Amended Water Lease, 3. Water Rights Lease dated Feb 15, 2022, 4. Exhibit A: Water rights as identified and ‘equipment’, 5. Attachment B: Location Map Turnpike (Huwa)

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 First Amendment to the Water Rights Lease with Turnpike, LLC [Weld County, CO]

Body

________________________________________________________________________________

 

Executive Summary

 

Castle Rock Water is seeking ratification by Town Council of a resolution (Attachment A) for the First Amendment to the 2022 Agricultural Water Rights Lease with Turnpike LLC (Turnpike).  Turnpike is a farmer located in Weld County adjacent to the Lost Creek Basin wells we purchased in 2017 as part of our Alternate Source of Supply Project.  As part of the 2022 lease, the farmer has used 277.08 acre feet (AF) to date of water from these wells in 2022 for irrigation (their current lease expires November 15, 2022), for total revenues year to date of $10,113.  Turnpike LLC is interested in an additional 100 AF lease of our Lost Creek Basin water rights this season as one of the three wells leased has failed and there is a delay in being able to repair the well in a timely manner.  Turnpike plans to supplement their irrigation with one of the adjacent wells.  The Town’s Lost Creek Wells have a three-year water banking provision, and those wells currently have enough water banked that would allow for Turnpike’s additional request, despite the annual maximum for each well.  The amendment would increase the available water from 485 AF to 585 AF.  The lease rate of $36.50 per acre-foot would remain the same. The reason for the request for Town Council ratification is due to the fact that Turnpike’s crops are nearing the end of their growing cycle and additional water is needed to finish them prior to harvest.

 

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

 

February 28, 2018, Castle Rock Water Commission unanimously recommended that Town Council approve the 2018 water lease agreement. 

 

March 6, 2018, Town Council unanimously approved the 2018 water lease agreement. 

 

January 23, 2019, Castle Rock Water Commission recommended that Town Council approve the 2019 water lease agreement.

 

February 5, 2019, Town Council unanimously approved the 2019 water lease agreement.

 

October 23, 2019, Castle Rock Water Commission --recommended that Town Council approve the 2020 water lease agreement.

 

November 5, 2019, Town Council unanimously approved the 2020 water lease agreement.

 

July 21, 2020, Town Council approved the First Amendment to the 2020 water lease agreement, increasing the water lease by 30 AF.

 

February 24, 2021, Castle Rock Water Commission recommended that Town Council approve the 2021 water lease agreement.

 

March 2, 2021, Town Council unanimously approved the 2021 water lease agreement.

 

January 26, 2022, Castle Rock Water Commission recommended that Town Council approve the 2022 water lease agreement.

 

February 15, 2022, Town Council unanimously approved the 2022 water lease agreement.

 

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.

 

Discussion

 

As part of the Town’s hybrid renewable water solution, the Town purchased several Lost Creek Basin wells in 2017 and 2021.  These wells came with approximately 1,492 AF (annually) of fully exportable water rights which could be used for municipal and other purposes.  Eventually, the Town intends to use these water rights directly or as an augmentation source in conjunction with the Box Elder project.  However, until infrastructure is built to transport this water to a treatment plant or place of augmentation, leasing this water for other purposes helps to generate some revenue for Castle Rock Water.  In 2022, Turnpike LLC has used 277.08 AF of water to date from these wells for irrigation for total year to date revenues of $10,113.  The farmers have requested an additional 100 AF from well 31527-FP in 2022.

 

The key terms of the First Amendment to the 2022 Water Rights Lease agreement are summarized below:

 

                     Agreement will terminate on November 15, 2022.

                     Turnpike LLC will lease up to 585 AF (addition of 100 AF to the original 485 AF permitted in 2022) of water at a rate of $36.50 per AF.

 

The following table outlines the wells that will be used and the amount of water we will be leasing to Turnpike LLC.

 

Well

Maximum Water to be Leased**, AF

Annual Water Rights, AF

31526

190

144.4

31527

180 + 100*** = 280

139.1

31643

115

111.3

14860

0*

74.3

Total

585

738.6

*Well not operational

**Maximum water to be leased may exceed annual water rights of an individual well if banked water is available

***First Amendment to the 2022 Water Rights Lease

Budget Impact

 

If Council approves the agreement, Castle Rock Water could receive up to $3,650.00 in additional revenue in 2022 beyond the original potential lease revenue of $17,702.50.  The revenue will be deposited into Water Resources Fund Capital Leases account 211-4375-393.70-00 <WRAWL>.

 

Staff Recommendation

 

Staff recommends approval of the First Amendment to the 2022 Water Rights Lease agreement with Turnpike LLC for 585 acre-feet of water, which will generate additional revenue of up to $3,650.00. 

 

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

 

Attachment A:                     Resolution

Exhibit 1:                                          Agreement

Attachment B:                     Map