September 20, 2023 Study Session
Transcript
Describer:
Session Agenda
Wednesday, September 20th 2023, at 5:30 p.m.
7404 Yorkshire Drive, Castle Pines, CO 80108
I. Call study session to order.
II. “Water Rights 101”- Austin Hamre
• Austin will be presenting a brief overview and history of water law in Colorado, as well as providing information regarding our current portfolio.
III. Adjourn
Board President Jason Blankaert:
We're ready. We have the shop prepared. Okay. Good evening and welcome to the Castle Pines North Metro District study session for Wednesday, September 20th, 2023. It's 5:30 p.m. and we are going to call the study session to order. The first, item on our agenda is Water Rights 101 by Austin and Austin how is the last name pronounced here, Hamre.
Austin Hamre of Hamre, Rodriguez, Ostrander & Prescott PC.:
There we go. That ought to work better.
Jason:
Much better. Okay, well, welcome us tonight. We're excited to hear your presentation, whenever you are ready!
Austin:
so we'll fix that.
Legal Counsel Kim Seter, Esq.:
I did, just want to interject really quickly, since we have a new face in the room, I want to introduce you guys. so to my left, I have Joel Drew. He's here with, Kim Seter’s office.
We'll probably be seeing a lot more of him around. He joined their firm about two months ago. so. Yeah. That's it. Or. Welcome. Joel. Joel. Drew. Yeah. And so we're going to make a different lawyer, talk to us for the next two hours. So you're off the hook. Okay?
Austin:
Okay. Well, thanks for having me down to talk about this. I've been talking with with Nathan. Nathan, about wanting to, get into some of these issues with you for for a bit. So, but I've, just for a little background, I've been practicing water law and a couple other closely related areas to that, but mostly water law since I got out of law school in 1988.
Our firm's been representing Castle Pines North since 2004 and, since even before 2004, Castle Pines North has been grappling with the issue of how to get off Denver Basin groundwater and, what to do for their future long term water supply instead. And, the reason that question hasn't been answered yet is because there are no easy answers.
No matter what course of action you choose, for dealing with your future water supply, there's going to be difficult issues to deal with, and it's not likely to be cheap. Because of the scarcity of renewable water, actually, the scarcity of any water in Colorado, the longer the district waits to have to pick its course of action and get started on pursuing, some course of action, you know, the narrower your range of options is going to be.
Describer:
On screen. Presentation Slides.
Water Law 101 CPNMD Board Study Session September 20, 2023
Hamre of Hamre, Rodriguez, Ostrander & Prescott PC.
Austin:
And, probably the more expensive they're going to be. It's kind of like getting food at the grocery store, you know when stuffs out of, stuffs out of season, it's it's the worst quality and the highest price. So we're going to start with, see if I can get this to, there we go.
Describer:
On screen.
Overview
• Terms
• Water Law 101
• Future Water Supply issues
• CPN assets (water related)
Austin:
I like to start by just running through a couple a terms that, we're likely to run into here and there, real quickly, and give you a brief sort of water law 101, a little bit of background on,
on the law. Kind of the high, high level picture of a number of these areas, you know, set the stage for more in depth conversations, to come later, hopefully allow you to develop a plan or approach to making decisions about how the district wants to go forward. We've got quite a lot to cover, so I'm going to try and keep it at a relatively high level and stay out of the weeds.
I'm not always successful at that, but that's the plan. So first some terms what a law 101. And that in that regard, you know, I think it's pretty important to have just a basic understanding of the legal structure in which you're operating as you're trying to make some of these decisions. That, that legal structure determines what's feasible,
what's possible, and what's not. As far as future water supply, we'll get into some of the practical issues and alternatives that you'll be facing and then run through some of the assets that CPN owns water related assets that may, be you know, considerations in, in some of the decisions that you make. So,
Describer:
On screen.
Terms
• Acre foot: 1 ac x 1 foot ... 325,851 gal.
-CPN demand: 2,400 af/yr.
• Cubic feet / second (cfs): 1 cfs ~ 2 af/day
• Yield - firm & average
Austin:
Here we go so, just a couple of terms, when we're talking about volumes of water, usually we're talking and, you know, measuring water and, by acre feet, which is, not surprisingly, one acre, one foot deep. It's about just a little shy of 326,000 gallons. Castle Pines North demand, is is about 2400 acre feet per year on average.
When we're talking about water on the move, water in a ditch, water coming in down stream, we usually talk about that in terms of cubic feet per second. So one cubic foot per second for a full day gets you just under two acre feet of water. And and yield, We talk about yield in connection with water rights or sometimes water projects.
Most a lot of times when people talk about yield, actually talking about average yield. And that'll be based on a study period of, you know, 20 years or 50 years or something of that sort. A lot of times, though, what's really more important than, than the average is the firm yield. And that's that's the question of what happens in a drought cycle, how how bad a drought can you get through, how much water can you use and still not run out?
You know, when you need to flush the toilet, telling somebody, don't worry, next year you'll have lots of water, doesn't quite get the job done. So,
Describer:
On screen. Water Law Fundamentals
Part I:
Using an historical lens to make sense of water law
Austin:
All right. Okay. So if you water our fundamentals. A lot of people find, water law to have to, a lot of really arcane rules and, and have a hard time making sense of of them, and and it does get a bit arcane, but I find that if we look at things from a historic perspective and see how things developed over time, you start seeing why certain issues came to the fore at certain points in our history and why they had to come up with with some of these rules.
Describer:
On screen.
A. The Colonies eastern US -
Riparian Doctrine
• Use the water that's on your land
• No material change in flow
So that's the approach I'll try and take. Start out with, you know, prior to Colorado, early in the country's history, you know, the East Coast, these colonies were being formed. They basically imported the law from, from England And that was the Riparian Doctrine. You can use the water that's on your land If there is no stream running across your land, you're just kind of out of luck back east, however, there's, you know, you don't have to go too far to run into another stream.
It's, it's a lot wetter than it is here. The other part of the riparian doctrine is you cannot cause any material change in flow of the stream. But back there, there was enough precipitation. They didn't need water for irrigation. Mostly what they were having to use the water for was turning a water wheel for a mill or that sort of thing.
Describer:
On screen.
B. The Colorado Mining Boom -
Appropriation Doctrine
• Can bring water to the land that has
none
• First in time is first in right
So it worked out pretty well. People started moving out to Colorado because of the gold rush, and for that they needed water for plaster mining, and for plaster mining You take water out of a stream, sometimes a long way from the stream, and you have to run it through a wooden trough. You shovel a bunch of dirt and stuff into the trough, and it washes the dirt away, and little bits of gold and things are left in the bottom.
They they found that, here in Colorado, there's, you know, there's lots of land, lots of very dry land. And the rules from back east just weren't going to work. They needed to be able to take water a long way away and deplete the stream. And that's that's kind of the the fundamental difference, between the riparian system and the appropriation system that we have here, prior appropriation doctrine, is that an appropriate of right is a right to deplete the stream, to take water out, that never the never gets back in.
And it's a completely different animal than what water rights were back east. So.
Describer:
On screen.
C. The Agriculture Boom - The Appropriation Doctrine grows up
• Adjudication of priorities and "calls"
Austin:
Under the appropriation doctrine, then, you've got I'm sorry, let me just.
The main thing with the appropriation doctrine is that, you know, you know, I was here first and time as first and right. And so taking water out of the out of a stream and putting it to some beneficial use is what creates the right whether you're upstream or downstream. Doesn't really matter is when you put that water to beneficial use that establishes your rank among other water rights.
The appropriation doctrine is is actually written into the state's constitution because water is that scarce and it's that important. So the state's constitution says that, that, the water of every natural stream is subject to appropriation. And so that question of, well, so what's a natural stream gets to be kind of important. We're going to circle back to that here shortly.
But. In Colorado we have we have a court system. We have court proceedings to determine, your priority, the priority of your water. Right. Which establishes your place in line. When did your water right get started as compared to somebody else's?
Describer:
On screen. Priorities and Calls
As described here. A Blue line, representing a water stream, over from the top left to the bottom right with two-way red arrows which have dates from 1882 to 1903 establishing when a water right was established and moving up and down away from the blue line as Austin explains.
Austin:
So, for example, in this diagram, these little red triangles are head gauge where they divert water off the river. And and you know, the dates here are times, you know, where these where these, the times when these appropriations were made. So early in the in the springtime, spring runoff. There's lots of water. Pretty much everybody gets to take water, get all they need.
You get further into the summer, spring runoff subsides. The amount of water in the stream and river starts to drop, and they have to start shutting off more junior appropriators. So, you know, you would think, okay, this guy, 1903, is probably the first one to get shut off. And that may be true, but as things progressed, you know, the.
Some of these, folks further upstream probably get called out by this 1876 water. Right. But because there's return flows that get back to the stream, water returning from the stream from use of the water under these ditches. You know, it's entirely possible that this 1903 water right down here may have water in the stream from from return flows from this.
Right. It's possible that 1903 gets water right, even though 1874 and 1882 are called out. So it's location is not irrelevant. But, because of, I mean, depends on where you are in relation to where the calling rights are. That makes sense.
Describer:
On screen.
C. The Agriculture Boom - The Appropriation Doctrine grows up
• Adjudication of priorities and "calls"
• Mutual ditch companies
• Limited to original intent
* (amount, place of use, storage vs direct flow)
Austin:
So we get into the 1900s and, Well, actually, you know, even prior to that, into the, you know, the 1800s, 1890s, the 1880s, 1890s, the the, the gold rush and the mining booms, you know, have come and gone. A lot of people that moved to Colorado to strike it rich found that they didn't and figured, well, we're going to have to find some more reliable way to make a buck.
They get into agriculture. So we start seeing little, little ditches along, you know, right along the rivers. Pretty soon, the easy, you know, the land right close to the river is, is is taken up and you have, people forming corporations, mutual ditch companies that, you know, by banding, banding together, they can build much larger ditches, carry water, a lot more water further from the stream, put a lot more land into production that way.
So whereas if you have a shares of Exxon, you get dividends from the company. They pay you part of the profits of the company. If you are a shareholder in a mutual ditch company, you get a pro-rata proportional portion of the amount of water diverted by that company. And the Castle Pines North did own some ditch company shares for a while.
We'll touch on that here a bit. and importantly then when you make an appropriation, you're, you're limited to your original intent that the appropriators in the, the intent that you had at the time you made your appropriation in terms of the amount of water, where you're going to use it, how you're going to use it, when it's going to be stored for later use, or whether you're going to use it, on an immediate direct flow basis.
Describer:
On screen.
D. The Population Boom - Water runs uphill to money
• Changes of water rights
• Exchanges
So we get past World War Two, and a lot of people start moving to Colorado, and we start to see, the demand for water. Because of the increased population, the demand for water starts to shift, shift from almost entirely agriculture towards, municipal use. And that that trend has continued. And we're still seeing that today. Along with that, there were changes of of water rights prior to that, but they became far more prevalent when we start to see this change from what we're going to use water for and where we need to use it.
That's.
We'll stick with this one for a minute.
So the law allows you to change the point of diversion for your water, right. You can change where it gets used. You can change what you use it for. But other water rights on the stream are entitled to have stream conditions maintained to reflect the same as they were at the time that they made their appropriations. So you can't, you can't expand the water, right?
You can't go from irrigating 100 acre farm to irrigating 500 acres, because the appropriation doctrine is all about what your place in line is. And if somebody ahead of you can hugely expand their water right then your place in line really doesn't mean anything. So these rules developed about, okay, what can what can you do and what can't you do.
You know, expanding your water, right was one of the things that you know, that's that's not going to work when you start changing the the type of years, especially from agricultural to municipal use, you need to quantify not just how much you diverted historically so that you can keep that the same in the future, but also how much, actually got consumed.
There's there's a difference between using water and using it up. When you irrigate a field, 40 to 60% of the water actually ends up getting consumed by evaporation and transpiration of the crop that you're growing, that water, you know, goes up in the air and never to be seen again. The rest of the water either runs off on the surface or sinks into the ground, sinks of the ground, gets past the root zone, and eventually percolates back to the stream, shows up in the stream somewhere down the road.
Maybe next week, maybe years from now. But other people are, depending on those return flows of water. So when you're changing water, right, that's that's part of the stream conditions that you have to maintain. And people go to water court. Now we have engineers that spend a lot of time and effort figuring out, you know, where the water go.
When did it get there? How much was it so that they can maintain those historical stream conditions?
This is also, the point in time when when the idea of reusable water started to become really important historically because because we didn't have the, the science and the engineering to be able to quantify how much water was getting consumed by crops, the simple way to address that was, well, you get to use one on one time, you apply it to your land, you're done.
And if anything flows off, well, that's it goes back to the stream and it's it's there for the next person. When we start transferring water to municipal uses, I mean, indoor uses in your home don't really consume much water, right? You you generate a little bit of steam from taking a shower, from cooking, maybe. But most of the water that comes into your home, one way or another, one ends up going down the drain.
And municipalities were thinking, well, wait a minute, I paid really good money for these water rights and most of this water that historically got consumed, it hasn't been in the stream for 100 years. You know, I should be able to recapture that and consume it again. And and the law sort of evolved to allow that. So,
Pardon me.
So the law, saw the need to, to evolve, to allow that recapture and reuse of what had been fully consumed. Water. Practically. How do you do that? And how do you deal with the fact that people generally have not been too keen on the idea of using effluent as, as their drinking water? Well, one of the answers to how you deal with that is exchanges.
And an exchange basically says. Well, exchange basically says, I may be junior and out of priority, but I'm going to be able to put water back in the stream to make up my depletion for whoever the calling water right is. So so I can prevent injury that way. So in this, in this, diagram. If, if this, you know, 1898 water.
Describer:
On screen. Exchanges
As described here. An Illustration. A Blue line, representing a water stream, over from the top left to the bottom right with two-way red arrows which have dates from 2004 back to 1885 establishing when a water right was established and and exchange of 20 cfs which is Substitute Supply donated as Stored Water, Reusable Effluent and Leased Eater is returned to the stream at a later time, moving down the blue line and back in time as Austin explains.
Austin:
Right And is a 1940 water right are not satisfied and there's not enough water for them, then there's 2004 water right wouldn't be able to divert. But when this 1885 water right is the calling water right. And they're calling water past these other two, then this guy can say, okay, I'm going to divert my 20 cos, I'm going to use that water.
And what I don't use, I'll put back in the stream and I'll add some other substitute supply water to it. It could be from various sources. I'm going to put, I'm going to make up my depletion back here. So this 1885 water right is, is made whole and, and gets the water that they're entitled to.
So exchanges sort of give you a second layer of priorities that you have to deal with. But they we also think of these in terms of sometimes, you know, moving, moving water upstream, if you've got water coming back to the stream at this point, you in effect, can move it back upstream by an exchange. You said, you know, in exchange for this water being put in the river here, I'm going to I'm going to take an equal amount out here.
It allows you to recapture water that you might not otherwise be able to, to recapture at all. Or you might have to build a lot of expensive infrastructure in order to be able to capture it.
Describer:
On screen.
D. The Population Boom - Water runs uphill to money
• Changes of water rights
• Exchanges
• Plans for augmentation
Austin:
A similar concept to exchanges recording in progress. Sorry. It's a similar concept is something called a plan for augmentation.
And that's and that is, is kind of based on that, on the..
Describer:
On screen. Alluvial Aquifer & Well Pumping
An illustration of how a well interacts with surface water as explained by Austin.
Austin:
Based on the idea that you have that, you know, what we really have to replace is just the amount that you're consuming. And and we may not have to replace gallon for gallon every, every bit of water that you take out of the stream in the first place. It really gets more important when you're dealing with wells, tributary wells.
So in this little diagram is to kind of explain, tributary groundwater. This dashed line here represents the water table, above this line you've got here relatively dry dirt below this line, this this brown line down here represents bedrock. Water gets to that point and it's impervious and it can't go through it. And water starts to build up.
So the ground is is saturated up to this point. And this is what you normally hear of as you know, talk about is the water table the the point where the ground is saturated. So you see this sort of slopes. Towards the, towards this stream. And the I mean, the reason this the reason you see a surface stream, whether it's East Plum Creek or the South Platte or whatever it is, the reason you see the water is on the surface there is because everything under it is saturated.
It can't sink into a ground, into the ground. It the ground's already full. So if you put a well over here and you're pumping water out of the ground from this well, then the water basically, you know, flows into falls into this well and it creates what we call a cone of depletion, cone of depression is sort of making a hole in this tributary aquifer.
And over time, this the depletion from this cone of depression migrates towards the stream. So what the what you do is a plan for augmentation is you calculate okay, how much water is, is, is being depleted here. Plans for augmentation first came up in a in a context of of agriculture when they were going more from from surface diversions to a lot more agricultural wells.
They'd be pumping water out, they'd be applying it to the, to a crop. So some of that water, like we're talking about a few minutes ago, some of the water they be applying to the crop went right back to the same aquifer they pump the water out of. So they had just had to figure out, well, how much, how much water is getting consumed.
What's what's the net amount that we have to replace. And so the plan for augmentation figures out the amount and the timing when, when this depletion migrates to the stream, when the, when the stream actually sees that depletion in a plan for augmentation allows you to pump this well because you're making up your depletion to the stream at the time the stream feels it so that so that your water rights aren't aren't impacted by your well pumping.
But the same thing applies to wells used for municipal purposes. And the CPM has has some groundwater rights than that. And also some plans for augmentation that go along with those.
Okay.
Describer:
On screen. An Illustration. A blue line from upper left to lower right of the screen, representing a water stream. Substitute Supply is pointed out closer to the upper left, a Well from 2015 is described as the point of depletion on the lower right, Next to the well is an irrigation field. 1885 water right is on the bottom right of the stream line. Austin further explains.
Austin:
And this is just sort of a diagram of of what we were just talking about here typically. Whereas with an exchange you're putting water in below where you're depleting the stream. So you've got a depleted reach with an augmentation plan, you generally put water back in the stream above your depletion so that the stream is never had a deficit.
Describer:
On screen.
E. The Population Boom, Part 2 - Digging Deep
• Tributary vs Nontributary - What water is not connected to a stream?
• The Denver Basin - Nontributary and "Not Non-Tributary" water
Austin:
Along with the explosion in population in Colorado, particularly in the metro area. We saw a lot of we started to see a lot of development in, you know, Arapahoe County, Douglas County and areas where where they had never been that much surface water. There never been that much, agriculture and ditches taking water out for getting that kind of thing.
People started. One of the other things that we saw after World War two is, is a lot more, you know, rural electrification, more people had better access to electricity out in rural areas and the development of of larger turbine pumps that could, that could pump water more efficiently, larger amounts of water and also from, from deeper depths.
And so we started to see people accessing the Denver Basin, you know, the groundwater in the, in what we call the Denver Basin.
Find my cursor again here.
Describer:
On screen. Tributary vs Nontributary Well Pumping
An illustration of how a well interacts with surface water as explained by Austin.
Austin:
So whereas before we were talking about depletions of groundwater basically above the first confining layer of groundwater, sorry, the first confining layer of bedrock and all of this water is directly connected to the stream. In the Denver Basin, we have layers of impervious rock separated by layers of, of sandstone that are really quite porous and, and these layers of, of more impermeable rock separate them and prevent these lower aquifers from having an impact on, on the stream system.
So the.
In Colorado we've coined the term non tributary. but that's, you know, water that does not have any appreciable impact on the stream. And in the Denver Basin there's, there's non tributary and then there's water in some of these aquifers that are close to here is where these sandstone aquifers come to the surface. And there can be a limited impact.
And for. So we came up the legislature came up with this idea. We're going to call this not non tributary water because we didn't want to call it tributary. Because then the constitutional require payments for appropriation would apply. And it's like well we can't that that just doesn't work for these things. So but it's it's not truly non tributary.
So there's special rules for not non tributary water. You've got decrees for your Denver Basin aquifers. Most of them are non tributary. There's a few that are not unitary water.
Describer:
On screen. Denver Basin (Map View)
From Left to right. Denver Basin Aquifer System. A Legend: Lightest Green represents Dawson Aquifer. Green represents Denver aquifer, Autumn Green represents Arapahoe aquifer adjacent to Denver, Autumn Green represents Laramie: Fox hits aquifer adjacent to Arapahoe. Below is a Colorado state map indicating where the aquifer is located. To the right is a close up from Boulder county across to Morgan county in width and from Greeley Down to Colorado Springs and further in length. It is about two thirds of the state of Colorado in length from the north border of the state.
Austin:
This is a a map. you know sort of an aerial view of the Denver Basin aquifer. As you can see, Castle Rock here. you know, Greeley on the north, Colorado Springs down here.
Lyman is just over here on the on the eastern edge and and and the foothills, where, you know, the mountains, you know, up thrust created the the mountains that form the, the eastern edge of these. But I generally tend to think of these aquifer as kind of like a series of nested bowls with one bowl inside, you know, progressively smaller bowls inside each other.
Describer:
On screen. Denver Basin ( Cross Section)
From left to right. A small map with a cross hatch in red on an A & B axis. Top right shows a 6500 feet elevation to a depth of 3500 ft line flows down to Denver. Below it is us the Denver Formation, and below it is the Arapahoe Formation and below it is the Laramie formation and blow it is the Fox Hills Sandstone layer and at the base is the Pierre Shale.
Below the two illustrations is an another illustration describing an area south of Denver. From 7500 feet down to 3500 feet in depth. The Dawson Arkose is the top layer hill and within it on the eastern slope is the Castle Rock Conglomerate. Below it is the Denver Formation, the Arapahoe Formation, the Laramie Formation the Fox hills Sandstone extending out to the South Platte River and at the base is the Pierre Shale. Austin further explains.
Austin:
And then this is sort of a side view. We've got this transect. If you could just sort of cut the earth from east to west and look at the side of it, this is generally how you would see these that, that the, the boundary layers of rock, impermeable rock between these are actually a little bit bigger than they're portrayed here.
And you can see that, you know, this is about 120 miles from north to south. But, you know, the vertical scale, as it says down here, vertical scale, greatly exaggerated because, you know, this is only a difference of about 4000ft, whereas in this in this direction it's 120 miles. But even so, I think this is useful to to sort of help visualize how these.
How these are, how these are organized and.
Describer:
On screen. Denver Basin (Map View) Austin describes.
Austin:
Backing up for just a second, you can see, you know, here, for example, this would be, this would be the Arapahoe Aquifer, which is nearest the second from the bottom. And the only opportunities there are for that, for this aquifer to get recharged would be, you know, where you precipitation or where a stream crosses, crosses this.
And, you know, the water sinks into the ground and would actually be able to flow into that, into that aquifer and recharge it to some degree.
But it's a pretty limited degree. okay. So.
Describer:
On screen. Tributary vs Nontributary Well Pumping
An illustration of how a well interacts with surface water with 2 wells instead of one, as explained by Austin.
Austin:
So here your this is what I was talking about a moment ago. You've got your Denver Basin aquifers. You've got a well into, you know, whatever, you know, the Arapahoe or the Denver aquifer for whichever one it is, you're still creating a cone of of depletion here. You're slowly, you're withdrawing this resource. But but this confining layer prevents that from, from impacting the surface stream.
Describer:
On screen.
E. The Population Boom, Part 2 - Digging Deep
• Tributary vs Nontributary - What water is not connected to a stream?
• The Denver Basin - Nontributary and "Not Non-Tributary" water
• Allocation system - Land ownership vs Appropriation
Austin:
Because of the need for people to be able to develop water, the need for people to be able to develop land out in, in this area, Douglas County and that kind of thing, it was really important that they come up with a way of, you know, how are we going to deal with, this resource, the water in these aquifers.
So they they decided, okay, this is,
We're going to we're going to allocate in a completely different way. And the reason that we can do that is because this is not the kind of water that the framers of the Colorado Constitution had in mind when they said, waters of a natural stream, natural stream is kind of a linear system. And and it's pretty easy to, to, to administer it on a priority basis with, with an aquifer that's so spread out, it's really hard to figure out.
It's not linear. It's very difficult to figure out what the impact. I mean, a priority system just really wouldn't work there because the impacts which wells are impacting, which other wells would be extremely difficult to figure out.
So the, The Supreme Court and the Colorado Legislature sort of jointly over a period of, 10 or 15 years, sort of decided, yeah, that's not going to work. And this water is different. And we're going to and we're going to come up with a different way to, to allocate it. And the prior appropriation doctrine is not going to apply.
So, you know, that's kind of a good news bad news thing. One, you don't have to worry about priorities. You don't have to, you know, the fact that you weren't here in 1860 or 1880 to make an appropriation doesn't, doesn't come into the equation. the problem is because they're disconnected from the stream. That's the reason prior appropriation doesn't apply, but because they're not connected to the stream, you're mining the resource.
We're we're taking water out of all of these aquifers, and they are not going to recharge on any timescale that's useful for humans. The legislation that they passed in 1985 said, okay, we're going to we're to try and make this these aquifers last for 100 years. And basically what that means is we're going to figure out how much water is under your property with allocated based on land ownership.
If you own this section of land, figure out how much water is under that. And that's the amount you get in each of these aquifers, and you can take 1% of that per year. And hopefully, you know, 100 years before that runs out. And we'll all have figured out what to do next. But that was that was the idea.
We're going to allocate it based on ownership of overlying land rather than prior appropriation. But but because it's not going to because it doesn't recharge, it's up. It's a finite resource. And in the end, we're not going to be able to rely on forever because of that, you know, sort of bowl shaped structure that we were talking about.
You still have. I mean, water still flows downhill even underground. So when you're you mean here, you're not right at the very edge of the aquifer, but you're closer to the edge of the bowl than, say, Parker. And Parker has a lot of straws into that aquifer, and they're sucking on those straws pretty hard. Over time, water tends to, you know, it's going to flow down towards the, you know, the the lowest point in that aquifer.
So some places in the Denver Basin, they might see groundwater. I mean, there's the amount that they're entitled to, but they might see water under that property for a lot longer than 100 years. Other places are, you know, they're the aquifer under that property is going to go dry a lot sooner because it's not just they're pumping, it's pumping down gradient from them.
That's also impacting in.
Describer:
On screen. Part II:
Some further concepts
A. Physical availability vs. legal availability
• Is there water in the river?
• Is the water someone else's?
B. Absolute and conditional water rights
• Absolute: a perfected right - diverted, used, never have to go back to court again
• Conditional: the right to perfect a water right with a fixed priority - show diligence every six(-ish) years
Austin:
Okay. Some, some, some other concepts that would be helpful to, to know about or just some things to keep in mind as we discuss this. The we talk about water availability, but there's two components of that. One is physical availability and one's legal availability. You might have the water right appropriated in 1860, but if you're on some dinky side tributary of the stream and you only see flowing water in April and May, you're kind of out of luck come June.
That's the physical availability. Is there actually physical water there for you to divert? in other circumstances? You know, there's water in the stream, but you're junior and it's it's not your water.
In Colorado, we have. There's a lot of different ways to to carve up water rights and, and different, you know, distinctions to make. But there's we're talking about tributary water rights. There's absolute water rights. And that's a right that's been perfected. The water has been diverted. You've gone to court and court has said, yep, that's that's an absolute water, right.
You don't have to you don't have to go back to court ever again. All you got to do is just use your water. A conditional water, right, was a concept that said, you know, it's going to take us a while to get all our ducks in a row. We're going to get started on our water right now, and and we're going to get a conditional water, right.
That holds our place in line now, not 20 years from now when we get it all finished. So you get a conditional water right. You have to go back to water court, every six years and show that you've been diligent in your efforts to, to perfect that water right and implement it. And as long as it's conditional, you have to keep going back to show that you're still working on it.
Describer:
On screen. Part II:
C. Abandonment and Forfeiture
• "Use it or Lose it"
• Sometimes intent counts, sometimes it doesn't
D. Real property vs. personal property
• The right to divert and use water is a real property right
• The water actually diverted is personal property
E. Separate property interests related to water rights
• The Structure
• The Water Right from which you get the water carried through / held in the Structure
• The right to have the Structure Occupy the Land it is on
F. Regulation of the operation of water rights (the State Engineer) vs regulation of environmental impacts (the Feds & other local governments)
G. Water Court
Austin:
I'm talking about tributary water rights. A lot of times you hear about, you know, abandonment and this whole use it or lose it idea. And that's just sort of a shorthand for, you know, a long period of nonuse of your water. Right? Creates a presumption of abandonment. And if you if you don't use your water, right, then it can just go away.
The right, you know, ceases to exist when you're dealing with. The the other thing to remember in connection with that is nonuse creates a presumption. But in the end, it's really abandonment is really a matter of intent. And and you can go to court and say, yeah, I understand him and using it for a while, but I've got a good excuse.
You know, I don't I haven't intended to abandon it. I've just been, you know, my hand's been forced out of circumstances with a conditional water. Right. You've got you've got to go back to court every six years and their intent doesn't matter. It's it's a matter of forfeiture rather than abandonment. If you miss your filing deadline, your water rights gone.
Doesn't matter what your excuse is and your district does have some, some conditional water rights that that we've been filing diligence cases on periodically. And, And trying to keep those going until the district decides what exactly we're, you know, you want to do going forward. A water right, the right to divert water and use it is considered a real property, right, that you can convey water rights just like you do interest in land.
But once you take water out of the stream under a particular right, it's treated more like personal property. You can you can lease it somebody else, that sort of thing.
They're just they're treated, and treated differently. There's there's three property, separate property interests related to water rights. And this is one that that it's going to be important to keep in mind because, because this applies to you guys. I mean, first there's the structure itself. There is the water, right, that you get the water is water carried through or the storage structure that you store the water in.
And then, you know, there's, there's, there's a right to have your structure occupy that land. But for example, the district has CPN and, and Castle Pines Metro jointly appropriated a storage right for, for Chatfield Reservoir. That was appropriated in 2004 when the Chatfield reallocation process was was still in the works. Got a conditional water right for for 1000 acre feet per year.
But that that water right is this this is how much water you can take in a year. And here's what you can do with it. You went to CPN, was one of the participants in the Chatfield reallocation, process and wound up buying, 1006 acre feet of storage space in Chatfield Reservoir. Okay. Now we're talking about the structure, not the water
right. And I analogize this to and it's the difference between having a car and having a garage to put it in. You can own either one independently. The fact that you own one doesn't necessarily mean you own the other. But if you want to exercise your storage right in Chatfield, you got to own the right to put water in that storage bucket.
In order to do that.
The another distinction that we I'm not going to spend a lot of time on tonight, but, the state engineer is the Colorado State engineers, the state agency. They're the water cops. They administer water rights. That's that's not the same thing as, regulation of environmental impacts. If you're going to build a project, you end up having to go through various permitting processes.
You know, the, 404 permit, for example, that you might need to get if you're dealing with, you know, we've been hearing about waters of the United States and all of that. There's those regulation, environmental impacts. There's also, you know, local government, local governmental entities have, permitting powers that sometimes come into play when you're trying to get a project put together.
In 1969, they they decided we needed to have judges that really understood water law because it's pretty complex. We created this thing called the water Court. I'm not going to spend a lot of time on that tonight, but just point, you know, I mean, if you go to water court to mess with water rights and it's kind of a kind of a separate thing from just general civil litigation.
Describer:
On screen. Part III:
What does this mean for what lies ahead for CPNMD?
Future Water Supply
• 2015 - Colorado Water Plan (in South Platte Basin)
• Population: 3.5M in 2008 to 6M by 2050
• Water Demand:
- 2008: 643,000 af/Y
- 2035: 880,000 at/Y
- 2050: 1,000,000 af/y
Austin:
Okay. So moving forward now, what's this all mean for you guys? In. Just by way of background, in 2015, the state of Colorado put together their first Colorado water plan. And part of that that was talking about the South Platte Basin said. I mean, the data they had to work with at that point, was, you know, in 2008, there was 3.5 million people in South Platte Basin.
They were planning they were estimating that was going to be 6 million people by 2050. And the water demands that go along with that 643,000 acre feet of water per year of demand in 2008, by 2035, they were estimating that was going to rise to 880,000 and a million acre feet per year by 2050. So that's an increase of almost 360,000 acre feet of demand in in 40 years.
And importantly, by some estimates, that million acre feet a year of demand is pretty close to or maybe a little higher than, the average annual flow of the South Platte River.
That means things could get interesting when everybody's trying to get their water supply lined up.
Describer:
On screen. Part III:
Future Water Supply
• Potential partners / providers
-Provider - CPN is added to their service area
-Partner - project oriented
So in looking for for a potential water supply there you you may want to look at potential partners or potential providers. And the distinction here is that, you know, if you're talking about finding a water provider, you're talking about somebody that will step in and serve Castle Pines North. Your district gets added to their service area. And essentially, you know, they're driving the bus.
If you're talking about somebody to partner with, then you probably that's a more project oriented kind of a thing. And, you know, they're you're a participant in driving the bus. The solution for Castle Pines North, I suspect, may be, a little bit of both. Probably going to be leaning more towards trying to find a provider or maybe participate in a project with a provider.
So, you know, sort of a combination of the two.
Describer:
On screen. Part III:
Where have we been already?
• Preliminary conversations with Centennial, Aurora, Castle Rock
• Almost a deal with Parker
Future Water Supply
• Two fundamental questions:
1. What water rights can we get?
2. How do we get the water from where it is to here?
No one has extra water sitting around - CPN's long-term future W supply will come from a project not vet built
The race is on ... How do we get in it?
• Some recent examples
- 1985: Thornton Northern Project
- Late 1990s: ECCV / ACWWA deal with United Water & San.
- 2005-2015: Aurora built Prairie Waters
Project
Austin:
You guys may. Yeah. I'm not sure what all your familiarity is with, you know, what what all has happened in the last, you know, 8 or 10 years. But there were some preliminary conversations about getting, service from, you know, its preliminary conversations with Centennial Water and Sanitation, with Aurora, with Castle Rock, and then extended conversations with Parker.
Almost got a deal done. But, for various reasons, it didn't quite happen. But whether it's you or the provider you're talking with when you're looking at, okay, how are we going to supply this community? How are we going to come up with a water supply for this community? There's there's two fundamental questions that somebody is going to have to answer.
The one is, you know, what water rights can we get? And sort of embedded in that is where are those water rights located. And then second, how do we get that water from where it is to here. And, you know, can we use exchanges to move that water, at least in part. Is there are there existing pipelines where we could acquire the right to use some of their capacity in an existing pipeline to move some of that water?
Or, you know, to what extent are we going to have to build all of that infrastructure from scratch?
Something that's pretty important to bear in mind is that nobody has extra water sitting around. So that one of the things that that means is your long term future water supply is probably going to come primarily from a project that is not yet built, whether it's a project that somebody else is building or that you participate in building or that you formulate on your own, it's it's probably not something that's out there yet.
So.
You know, I mentioned at the beginning that that the district has been grappling with their future water supply for, you know, for more than 20 years, in, in the 1960s, municipalities typically would, would acquire water rights, you know, from the land that was being developed. Somebody wants to do a subdivision and, you know, they dedicate to water rights that have been used on that land.
Sometimes they, you know, they they acquire other water rights from, from nearby. But it was usually pretty, pretty close to their, to their service area. And over time, water providers have had to look further and further away, to come up with enough water to meet their to meet their demands.
So since before I started practicing law, you know, there's there's been some competition. You know, there's been kind of a race to for municipal water providers to nail down the, the supplies for not just their existing population, but, you know, their planning area, the demands of the area that they're planning to serve ultimately. And because this has been going on for a while, you know, the low hanging fruit is gone.
In fact, most of the apples on the tree are gone. In 1985, the city of Thornton started it's what they call its Northern Water project. They went, up and bought 100 farms under the Water supply and Storage company system, northeast of Fort Collins. And plan was to bring that water, you know, change those water rights and bring it down, to their community.
You know, in the late 1990s, some of your neighbors, you know, East Cherry Creek Valley, Orange Sanitation District and the Arapahoe County Water and Wastewater Authority struck a deal with United Water and Sanitation District, which is kind of an interesting district. The district itself, what they call the control district, is actually,
Trying to remember if you think it's like ten acres, it's a it's a pretty small plot of land, but their but their service area, their claim service area is the entire state of, of Colorado. But in the late 1990s, ECCV and ACWWA paid $144 million to United Water and Sand for water rights that United didn't even own at that time.
But they have spent two decades, acquiring water rights.
Water rights along the South Platte between Brighton and Greeley, water rights on the Powder (River), West of Greeley and and also water rights even further downstream on the South Platte, east of Greeley. And they've also built a pipeline, to get water, you know, more or less to this neighborhood. And then between 2005 and 2015 Aurora built it's it's Prairie Waters project.
And they have they have been and continue to be buying lots of, ditch company shares, from ditch companies along the South Platte, you know, between Brighton and Greeley and and again, I mean looking looking much further for east from there.
So, Uh. Hmhm.
Trying to get my.
Cursor to cooperate here.
And it doesn't want to.
There we go.
Describer:
On screen. Part III:
The race is on ... How do we get in it?
• Most Water Providers don't have the supply for their existing & already planned service areas
• Questions on the mind of any Water Provider being asked to add a new community to their service area:
- Can we, & how?
- Why (under what conditions) would our existing rate payers be OK with that?
Austin:
So most of the water providers don't have the supply they need for their existing and already planned service areas. I looked into this a bit, you know, 7 or 8 years ago, and, I think both Parker and kind of Castle Rock were thinking, okay, by 2050, we're hoping to have between 50 and 75% of our,
System on, you know, on renewable water supply and, and the rest of the renewable water will we'll deal with after 2050. That's, I understand why they're doing that. There's a limit to how much you can do and how fast you can do it, and how fast you can pay for it. But I do kind of wonder how much water there is going to be left to, to nail down somewhere after the year 2050.
But the questions on any on the mind of any water provider that that is going to be asked to, to add a new community to their service area is going to be, well, you know, can we do that? How do we do that? And also, you know, why would our existing ratepayers be okay with that? And which is really question of, well, okay, what were those deal terms have to be in order to in order for that to be okay.
And the answer to that is, well, that some new community that's asking for service, I mean, one, they're they're going to have to pull their own weight. A lot of times there's a, a cost differential for what they call, you know, inside customers versus outside customers. People that aren't actually part of, you know, within your municipal boundaries or within your district boundaries.
So that sort of thing, get charged a higher rate if you want to become part of that district or get annexed into that municipality, then there's usually a requirement that you that that entity that that's coming, that's being included, pay for, you know, for their share of, of of what was done before they got there. You know, the system that was put in place, treatment system and, and a lot of that kind of thing.
So there's, I mean, there's, there's a there's valid reasons for why, you know, outside people get get charged at, at a higher rate up to a point. but but those are,
Describer:
On screen. Part III:
Future Water Supply
• Before you sign up with someone, need to know what you're signing up for
1. What projects) are they going to build?
2. What is the yield and how reliable is that yield?
3. What are risks?
4. What is the cost per AF?
Some potential options
-Re-start discussions with Parker?
- ECCV/ACWWA?
- Platte Valley Water Partnership (Parker & LSPWCD)
Austin:
You know, those are the questions that are going to be on, on the mind of, of anybody that the district goes to to say, hey, what would you think about serving us? On the other hand, you know, that's on their mind. What should be on your mind before you sign up with somebody else? You need to find out.
You know what you're what you're signing up for, first year and what projects are they going to build? What's the yield of that project going to be? The average yield and the firm yield. And are there projections for that realistic? And what are the risks? What what could go wrong with, with getting the project done, getting the project permitted, that kind of thing.
And, and of course, you know, what's the cost per acre foot going to be?
Okay. So, some potential options for. For how you might get started. I mean, one option, obviously, would be to restart discussions with Parker. I was not, really involved in the discussions with with Parker, you know, some years ago. I have heard from time to time, you know, there's some possibility that at a point in time at least, there were there is sounded like a possibility of restarting some conversation with Parker.
I have no idea where that stands at this point, but that's that, theoretically at least, is one option. you might want to consider talking with ECCV and ACWWA. If it were me, I would probably be more comfortable talking with ECCV and ACWWA and their about what their experience is and where the project stands and that kind of thing.
I'd probably start there rather than talking with United. United and and and, and the guy who's kind of the mover and shaker has kind of, an interesting reputation in the water business. That may be a that may be a viable option for you guys, but the, I probably start out talking with the ECCV.
There's also this what's now called the the Platte Valley Water Partnership, which is a project that was started by Parker and Lower South Platte. And as I understand it, Castle Rock has now decided they're, they decided to buy in to that project as well and help, help get that done. Here's a a map from there.
Describer:
Platte Valley Water Partnership Project Overview map. Austin describes.
from their website. But you can see out here, I mean, this is this is Logan County. I mean, this is this is out near Sterling. they're talking about building some, some reservoirs, some small reservoirs move water up, to to this, It's called the Fremont Butte, reservoir that they plan to build, which I remember correctly, is supposed to be a capacity of something like 155,000 acre feet.
But the the idea is to to capture water much further downstream, and pipe it all the way back to, to Rueter-Hess (reservoir). It's an interesting idea, that they filed their water court applications for this a few years ago. There obviously in the early phases they got a ways to go. But, it's it's an intriguing, project there.
According to their website.
Describer:
On screen. Future Water Supply
• Platte Valley Water Partnership (Parker & LSPWCD)
-Approximately $800 million for > 70,000 af/yr.
-$560 million built into PWSD's long-term planning and rate structure - should complete the first phase.
Austin:
They're they're projecting there's going to be, an $800 million project for somewhere in excess of 70,000 acre feet per year of yield. And again, I would bet that's an average yield and not necessarily a dry or a firm yield. But that's that's a lot of water. And particularly for somebody that's looking for 2500 acre feet a year, you know, there's possibility there might be room in that for, for a district like Castle Pines North.
Their website says they've, they've built 560 million into their long term planning and rate structure. And that's to complete the first phase. I don't recall how much you know, what what yield is associated with with that first phase, but, But the $800 million for 70,000 acre feet comes to, you know, $11,500 an acre foot, and that, in this day and age is pretty cheap water if they can get it done for that.
Describer:
On screen. Water Rights & Related Assets You
Own (what you can bring to the table)
• Overview
-Water rights
-Storage space
-Other infrastructure
-Land
-Augmentation contracts
Austin:
So if you go to talk to some other water provider, you know, one of the questions is what what can you bring to the table? What what assets do you have? You know, what can you do to help them serve you? And and how does that affect their cost for serving you? So we got, that relates to your water rights, storage space that you have, other infrastructure that you have.
And then I want to talk briefly about, land and some augmentation contracts, which are, kind of. Yeah. Issues fromn from some of the program that the district's not on anymore, but kind of hold over. But, but assets that, that that you may want to turn into cash. Okay. So, kind of in chronological order, but not not entirely.
Describer:
On screen. Water Rights & Related Assets You
Own (what you can bring to the table)
• Specifics & evolution
-Decreed rights to NT and NNT
Groundwater
• Denver Basin Wells
•Hock Hocking Mine near Alma in
South Park
Austin:
Sort of evolution of the district system, you know, in the mid 80s, the district was started out as a, as a district that was completely reliant on Denver Basin groundwater. The there were some, tributary water rights that were appropriated. We'll talk about those in a minute. But, initially it was it was your supply was exclusively the Denver Basin wells. In 2007 or 8 or so,
the district bought some, water rights associated with the Hawk Hocking mine, up in South Park near alma. And, that was.
So you, 300 and you and 330 acre feet per year. You owned the first, like the first position for the water that comes out of that mine.
They kind of the way they decided that the folks that used to own it sold it off in, in pieces. And it was kind of like a mini priority system. There are other people that owned segments, sort of later in line behind CPN, but you own the first half of CFS that comes out, which which ends up translating to about 330 acre feet at the mine by the time it flows down the river and gets to Chatfield Reservoir, transit losses, between here and there reduce that about 290 acre feet.
But they got a decree for this water. There's a few mines up in that general neighborhood. They did this, in the, in the early 80s. They said, oh, look, when we were doing this mining, you know, we poked a hole through this fault and all of a sudden a bunch of water started coming out. That water never would have been in the stream normally.
So it's not tributary to the stream. So we ought to get a right separate from the priority system for that. Based on our understanding of geology and, hydrology today, you would not be able to get a decree like that. It's decreed as non tributary, but it's more or less it's, it's really renewable water. So that's not a flag we want to wave around a lot, but that's, that's what that water is.
But because it was decreed non tributary it's fully consumable. It's it's reusable. It's pretty valuable water. It also has the advantage of you know it it at least gets us to to Chatfield Reservoir by gravity. You're not having to pump it for 50 or 100 miles to get it close to where you can use it.
Describer:
On screen. Water Rights & Related Assets You
Own (what you can bring to the table)
• Decreed Tributary Rights
-1985 Rights - Wells on East Plum Creek
Single use water
•Owned jointly with CP Metro
Austin:
So as far as your decreed tributary water rights, as I mentioned, you've got when the, district was just getting going, they adjudicated the non tributary groundwater. They also appropriated these water rights, for, for wells on East Plum Creek. They were originally, conceived to be conceived to be a horizontal. Well, it was going to be basically a perforated pipe 6000ft long down the middle of East Plum Creek.
For a while, people were thinking, you know, horizontal wells be a great idea. They turned out they had a lot more maintenance issues than, than were anticipated. And that that idea has sort of faded. And, In connection with some 2004 water rights, we're going to talk about a minute. We change these water rights so that they can be diverted at conventional vertical wells.
But these water rights initially were owned half and half by the district. And, but by CPN and also CP metro. Back and around 2000 or so, The district sold part of, you know, Castle Pines North. Sold part of what, it owned of these 85 rights to the the Jack Vickers entities. So right now you the Castle Pines North only owns one sixth of those rights,
instead of the half that they started with.
Describer:
On screen. Case No. 2004CW308 Exhibit B
A topographical map of the region surrounding CPNMD and CPMD with Chatfield Reservoir, Plum Creek, West Plum Creek, Rueter-Hess reservoir, East Plum Creek and Plum Creek Reservoir. Austin Explains.
Austin:
This is a map that was associated with, with some of the 2004 applications and, And what you've got there, It's kind of hard to see at this scale, but, just basically, across the stream from from PCWRA is, is a spot where.
Where one might build a reservoir. This would be a below grade reservoir, primarily below grade, you know, gravel pit, more or less. The. The depth to bedrock is, is pretty deep there. It's about 110ft, to bedrock. Most of the gravel pits that you see being turned into water storage reservoirs are more in the 30 to 40ft range.
Subsequent studies have shown that would probably be a pretty expensive reservoir to build. But you, in these 2004, water rights again were were done jointly between, Castle Pines North and Castle Pines Metro. So you've got a 50% interest in all of these, but there's a storage, right, for this Plum Creek reservoir. There's, a surface diversion that was decreed.
There's a number of wells both upstream and downstream of that point. The one was down, the thinking was, you know, might be diverting, even relatively speaking, cleaner water upstream from, from this reservoir and from PCWRA, downstream from PCWRA you might be you might want to have wells along the stream there for purposes of recapturing your effluent.
But one thing that wells are good for is that it's you basically use the stream bed as a gigantic sand filter. So you you put it well next to the stream. You pump, you pump water, and you don't have to worry about a lot of, water quality issues that you would have to worry about if you're dealing with surface water.
This was also, one of these cases, was the one in which we obtained a, 1000 acre foot storage, right, for Chatfield Reservoir. And, one of the benefits there is it is fed not just by Plum Creek, but by the South Platte River. So, there's a lot more flow in the South Platte River.
It's a it's a much bigger source of supply. And I'll point out just in passing that, you know, these water rates were applied for in 2004, they were decreed in 2013. The closing on the storage space in Chatfield happened in 2014. This year, for the first time, there was for the first time in a while since since the all the Chatfield reallocation work got done.
People got to store water in Chatfield Reservoir in their in their reallocation space. So you've now filled your field that storage space. We could file an application in water court and say, hey, we we can make this absolute now and we don't have to come back anymore, at least for that, for that storage right part of it. When and whether you want to do that is conversation for another time.
But just wanted to make that in passing. One of the reasons, the Chatfield storage was, was thought to be useful is because that's, that's where you're reusable effluent from PCWRA ends up. So we appropriated, exchanges to move whatever water you've got there, whether it's your effluent, your Hock hocking, the 2004 storage right.
The theory was that you could exchange that water from Chatfield back up to diversion points up next to in the neighborhood of of PCWRA. There was also an augmentation plan for these wells along the stream.
So every once in a while, this thing decides it doesn't want to. Go lower than the bottom of that. that figure and.
And I can't get it to advance to the next slide. Arrow here. Sorry.
Okay, we'll do it that way. Thank you.
Describer:
On screen. Water Rights & Related Assets You
Own (what you can bring to the table)
• Decreed Tributary Rights
- 2004 Rights
• Surface Diversions & Wells - East Plum Creek
• Storage in Plum Creek Res. (& Rueter Hess)
• Storage Right in Chatfield (South Platte &
Plum Creek)
• Exchanges from Chatfield up EPC
• Aug plan for '04 wells
• Owned jointly with CP Metro
• Historical context: Ditch Company Shares
Austin:
Okay, so we just talked through all of those. Well, we have the map up. Just for, historical context, you know, kind of where we've been., but in 2009 and 2010, the district bought shares in four ditch companies down in the Brighton and Platteville neighborhood. Those went through, change proceedings in water court and, resulted in about, 600 acre feet of fully consumable water that was decreed for for those for those water rights.
In like 2016 or 17 there about the board at the time decided that trying to move that water up from, you know, to here, from way down there and well, push back up, there was a, there was a, a study fairly intense, an extensive study that was done to, to figure out, okay, what are all the puzzle pieces we have?
Do we have pieces that don't go with our puzzle? Do we need to get other puzzle pieces that actually do complete our puzzle? And what does it cost to do that? And the price tag that was put on, I mean, the the good news was, yeah, you've got enough puzzle pieces to put together a renewable water supply for the district.
It was going to cost about $110 million. And, the board at that time thought that's that's an awful lot for a district and for a community of this size. And that's not the way that's not the the direction they wanted to go. So the that led to the negotiations with Parker, and in the course of that, the, the, Mutual Ditch Company shares, were sold.
So, you know, backing up and starting down that road again, you know, theoretically that would be possible. I'm not sure that you, have any thought of doing that, but I think even if you wanted to go that direction, I think it would be a lot more difficult to to do that now than it would have been.
You know, starting in 2009 and 2010.
Describer:
On screen. Water Rights & Related Assets You
Own (what you can bring to the table)
• Raw Water Infrastructure
-Chatfield Reallocation Storage
-CWSD Interconnect
-Rueter-Hess storage
Austin:
So raw water infrastructure. We just talked a little bit about the thousand acre feet of storage space that you owned in Chatfield. There is the the interconnect that has been built, to connect your system with Centennial Water Sanitation District. They divert water. They divert your water out of out of Chatfield, run into their system, treat it and deliver it to you.
Unfortunately, it was, Some of what was required to get that deal done, back when it happened was, you know, they get to keep a chunk of your water as well as charging you, money for treating it and delivering it. So it's,
In some ways, a little expensive, but it's but it's an asset you've got, and it gets wet and water into your system. Also in the 2000, 7 or 2008 timeframe, the district bought storage space in, in River Hess Reservoir that has, the, the Plum Creek rights that we were talking about in 2004. Some of that that included the right to take some of the water that you divert from East Plum Creek and pipe it over to router Hess for storage.
So that gives you, you know, that flexibility you have that alternative, getting it over there and getting it back, requires some expensive infrastructure that, that has not yet been pursued.
Describer:
On screen. Water Rights & Related Assets You
Own (what you can bring to the table)
• Wastewater Water Infrastructure
-PCWRA
Austin:
And then, of course, part of your infrastructure, you know, package that you own, is, is wastewater treatment. You own an interest in that piece, right? of Creek Water Reclamation Authority. And so why does that matter? Well, we're talking about reusable water before your, your Denver Basin groundwater that you're pumping, because that's water that historically was never part of the stream.
That's reusable water that you can recapture and reuse. You've got your Hock Hocking water that you can recapture and reuse. Being able to reuse water allows you to cut your overall the amount of water you need overall. I mean, your your your gross water demand is 2400 acre feet a year, but depending, I mean, if your entire supply was reusable water, you might be able to cut that by a half to a third because of that reusable component being able to you don't consume all the water the first time through the water that you use for outdoor uses, particularly lawn irrigation that sort of thing.
That is, you don't get much of that back. But the water that that is used for indoor uses, you can recapture and reuse that that reduces, you know, basically the size of the nut that you have to crack.
It's also relevant from the standpoint that, you know, Parker's on Cherry Creek, the town of Castlerock, even though part of their service area is sort of, you know, across that hydrologic divide and in the the Cherry Creek drainage, most of their infrastructure is in the Plum Creek basin. And from the standpoint of being able to hook your system to their system, to be able to recapture, you know, so for them to be able to recapture your, your reusable effluent and run that their system in the process of serving your water.
There's, there's a number of reasons why, that could make a lot of sense if, if they were somebody that you were trying to work with.
Describer:
On screen. Water Rights & Related Assets You
Own (what you can bring to the table)
• Land - Farms in Weld County
• Well Augmentation Contracts - CCWCD
Austin:
Okay. The last thing I wanted to touch on, you, in connection with some of the ditch company shares that you bought, up in the Platteville area. You bought land along with those shares? Some of that land. The thought was it would be turned into a, a gravel pit reservoir at some point in time.
But it it, the district bought the land and the shares and, and there were irrigation wells on that land, and there are augmentation contracts. We talked about the need to irrigate. I'm sorry, the need to augment irrigation wells to replace Depletions. Well, the Central Colorado Water Conservancy District operates a very large and extensive augmentation plan. And they own water rights to, to replace Depletions for a whole lot of irrigation wells you own for irrigation and contracts for, replacing depletions associated with some of those wells up there.
Those. Well, are those those augmentation contracts are probably worth somewhere in the range of, you know, 1 million to 1.5 million. that might be something that,
You might have other uses for that money. So this is, this is a map of the farms that you own.
District Manager Nathan Travis:
Austin. Have, you don't mind jumping in really quick? We did a question from one of the board members, Leah on zoom. asked the question, who makes the decision to buy and or sell water rights? Like who? Yeah. Who makes the decision to buy and or sell water, rights? So I don't know if she's talking about the owner or is I know Leah if you can hear me, maybe you can add a little, more context and then, I'll pay attention to the screen.
Will let Austin move on and then he can.
Board Member Director Leah Enquist:
No. Sorry. I, I was just thinking about the, the water rights that were sold a while ago. I don't remember when, but the most recent sale. I'm just curious how that works. Like, who makes that decision? is it it's. It's the attorney makes a recommendation on it.
Austin:
The district board decided to do that after, you know, after some study and consideration, they decided that they they wanted to go in a different direction than trying to come up with their own water system. And so the. Yeah, I mean, the, you guys get to make the decisions, we can, people like me can give you, advice and ideas, but, ultimately, it's the board that that makes those kind of, those kind of decisions.
Does that answer your question?
Leah:
Okay. Thank you.
Describer:
On screen. CASE NO. 09CW2.79 Anders Farms Map. Austin describes.
Austin:
So just I think this is the north end of little town of Platteville here. I think County Road 18 or 19.
These these are the parcels of land for which you were, approving leases, earlier this year, back when the district owned both the land and the ditch company shares that had been used on these parcels.
They were they were leased, these two parcels here and this one were leased to Petrocko Farms. They they produce a lot of produce.
This piece of land here was owned by, Randall Anders. And and he has his own own farming operation in that the Platteville share, was associated with those land. So that was the land was leased. Leased to him. So that that sale. but I'm not sure I'm keeping the years. exactly right. But I think, 20, 20, 21, there was a, district went through a request for bid process, more or less an auction.
Aurora put in what was determined to be the high bid, but Brighton had some issues with that. There was a lawsuit that was filed. It took a while to get that sorted out. Eventually, those parties decided to that, private would get some of the water in Aurora would get the rest of it. And the deal closed.
That just fall of last year, I think, was just the fall of last year. The.
Jason:
So I think it was the beginning of this year. Okay.
Austin:
In any event, this was the first year where ownership of land and ownership of water rights was not the same, but all the parties managed to get together and after to do the lease again. My understanding is that the city of Aurora does not plan to lease its shares this year.
I don't think Brighton does. I don't know for sure. and I don't think these are these parcels are big enough to be dry land farmed. Yep. Farming without an irrigation supply. So I think it's unlikely that that in the coming year that those leases are going to happen again. So you might want to talk to, a real estate broker, about land values up in that neighborhood.
The there's a, gravel mining output outfit called by the name of, LG Everest. That is, they own lands and a lot of places they've they have built, some gravel pits over just across the river here. They have expressed interest in acquiring these lands for, for gravel mining. I'm not sure that's that they would be able to pay the highest dollar for that.
But if you go through a request for bid, kind of a process, that would be a good way to to maximize the revenue that you get out of that. But, the, The carrying costs on the land I don't think are, are very high. When, when you've got somebody else leasing the land, and farming it, then, you know, they're sort of looking out for, you know, taking care of the land and, dealing with trespassing issues, all that kind of stuff.
But the, The land itself probably doesn't represent a huge monetary asset. But there's probably not a lot of not a lot of reason to keep that around the, the well augmentation contracts, as I mentioned, they, they are only they can only be used in conjunction with. They're supposed to be a supplemental supply. They're supposed to be supplementing, you know, ditch company shares or some other kind of water.
Right. So, I don't believe it's going to work for people to lease the farms and try and irrigate them just with those wells. The the amount of augmentation is not going to be enough to irrigate all of that land, certainly. But you may want to look at it going through a process to, to sell those augmentation contracts.
They're they're class D augmentation contracts, which means they're for agricultural purposes, not municipal purposes.
So that's. That's what I wanted to cover. I've thrown a lot at you, and you have a lot to digest. So, you may have some questions. We've got some time to do questions now, if you want, you may want to stew on some of this and and come up with more questions. And, we may want to set up a time to talk about that
somewhere down the road. There may be areas that you identify that you think, well, we need, we need to come up with more information on these these issues before we can really get started talking about where we go from here. But one way or another, you know, we probably need to have some further conversations to start mapping out, an approach for how you tackle this subject.
You might want to because it's so easy to push things off, it might be a good idea to put some I mean, if you think this is this is something that that the district needs to, to tackle and resolve. And, and I think it is I think it's an important issue that that, that deserves, serious consideration.
Having some having a timeline put in place for, for some of the steps that need to be taken, you know, might be useful. But with that, you know, what thoughts do you have at this point?
Nathan:
You guys don't have any questions? I'm going to come around with quizzes.
And so, Austin, there's not really any I mean, there's really no value to us holding on. Really. Any of those, like, any of those contracts, the land. I know we've also got some offers for mineral rights, but it's not really anything actionable. I know that we've got some help with, you know, people actually like you mentioned and actually taking care of that property.
But at a certain point, if those leases don't go through, we're almost moving into liability territory.
Austin:
I think you're exactly right. I don't think there's any benefit to holding onto those assets at this point. There is potentially some liability, although, you know, Governmental Amenity Act and I don't claim to be an expert in that. But but on the the well augmentation contracts, the,
The the assessments, there's annual assessments on those. And for. Between 4000 or $5000 a year for the assessments. Not much point in paying assessments if there's nothing you can be doing with those contracts. And if you don't pay the assessments, you lose them. So putting them up for sale and selling them to somebody that can use them, would make a lot of sense.
Nathan:
Okay. And so if we for selling those contracts, and the mineral rights and that is something that we would have your firm spearhead and then like a real estate agent for like the actual property?
Austin:
The, you know, I can, we can't make any decisions, but I can be of assistance, I think on the, on the more the water part of it,
When, when the district decide to sell the ditch company shares. We helped with the. We helped get the, RFP process put in place? yeah. I'm not sure. You know, when it comes to dirt, there's probably people that are qualified to help the city get the, top dollar for the asset there.
In on the the augmentation contracts. I was talking with one of the people from from central earlier this year. There's actually, you know, a, a broker in sort of a land and water broker, that handles them, that kind of stuff for the agricultural community, up, up in that part of the state and, probably makes it and this, this person had done, done an auction of some augmentation contracts in the last year or two.
That's probably the first person you want to check with on getting that done.
Board Member Director Tera Radloff:
Well, thank you for coming this evening because I think we've all been wondering about what our assets are, this is a lot for me personally. This is a lot of information to digest. I did write some things down that I like to follow up on, but I do need, I like your idea of a timeline, and maybe you working with Nate and giving sort of that whole overall picture.
I mean, I feel like there were some recommendations in there about what we have and what the value might be, but kind of seeing that all together would, I know, be helpful for me, certainly as one of, the five members that I think that would that might help drive some further stuff. And I, I know, Jim, over here is a fan of timelines.
So I feel like I might have the support on that.
Austin:
Well, yeah, I did throw a lot at you. and, and a lot of it's all complex. So, you know, sometimes you need to hear some of this stuff more than once before it really sinks into where you can process and figure out what to do with it.
So I'm happy to do whatever would be helpful, in that regard. But a, you know, trying to formulate, who do you want to talk to? How do you want to go about starting that process of talking to people or, I mean, some, some entity or perhaps more than one entity about, possibly know getting service from them or joining forces and, and what you could bring to the table and how that might work.
Tera:
And, and it's a very important topic because, renewable water is certainly something I'm very passionate about finding a solution for, So, appreciate your, you know, input on that.
Austin:
Well, yeah. Thank you. And yeah, I can't stress enough. I mean, it's it's not like we need to panic, but but it's it's an important issue and it needs we need a plan.
Yeah, yeah, yeah.
Jason:
Thank you very much, Austin. It's been very informative, to say the least. And, you have given us a lot to digest, so, thank you. But, yeah, timeline would probably be the most beneficial thing for us at the current time. Okay.
Austin:
Well thank you. Happy to have to come and talk to you. I hope it opens helpful.
And let me know what I can do to help move the process forward.
Nathan:
Sounds good. And feel free to, you know, shoot me any questions you have around it. And that way I can kind of just I'll keep it documented, just compile them. And then maybe in a, you know, 2 or 3 weeks a month or whatever, I'll just send off whatever we've got and we can use that for our next, our next steps.
Cool.
Jason:
All right. Are there anything else we need to discuss tonight, or are you ready to close the study session? I move, we close the study session.