Title
Resolution approving the Amended Agreement between the City of Aurora, the Southeastern Colorado Water Activity Enterprise, the City of Fountain, the City of Colorado Springs, and the Board of Water Works of Pueblo, Colorado
Presenter:
Brett Gracely, Manager, Water Supply Resources
Jerry Forte, P.E., CEO, Colorado Springs Utilities
Body
Summary:
The City of Colorado Springs, on behalf of its enterprise Colorado Springs Utilities, along with the City of Aurora, Colorado, the Southeastern Colorado Water Activity Enterprise, the City of Fountain, Colorado, and the Board of Water Works of Pueblo, Colorado are collectively referred to as the “ROY Participants.” Colorado Springs Utilities requests that the City Council enter a resolution authorizing it to execute an agreement with the other ROY Participants for the continued use of the Holbrook Mutual Irrigating Company facilities.
Previous Council Action:
The Colorado Springs City Council approved the May 27, 2004 Intergovernmental Agreement that provides for the Restoration of Yield program. In February 2005, pursuant to that Intergovernmental Agreement, City Council approved the initial cost share agreement between the parties to the Restoration of Yield program that provided for the sharing of costs for the 2005 - 2009 period. In July of 2010, pursuant to that Intergovernmental Agreement, City Council approved the initial cost share agreement between the parties to the Restoration of Yield program that provided for the sharing of costs for the 2010 - 2015 period.
Background:
The City of Colorado Springs, on behalf of Colorado Springs Utilities, along with the City of Aurora, Colorado, the Southeastern Colorado Water Activity Enterprise, the City of Fountain, Colorado, and the Board of Water Works of Pueblo, Colorado are collectively referred to as the "ROY Participants." On May 27, 2004, the City of Colorado Springs, on behalf of Colorado Springs Utilities, entered into an Intergovernmental Agreement (“IGA”) with the ROY Participants and others. Article II of the IGA provides for the recapture and storage for later use of water owned or controlled by one or more the ROY Participants pursuant to a program called “Restoration of Yield.”
In January 2005, the City of Aurora entered an agreement (“Original Holbrook Agreement”) with the Holbrook Mutual Irrigation Company (“Holbrook”) to use the unused diversion, carriage, and storage capacity that at times is available in Holbrook’s water diversion, conveyance and storage facilities (“Holbrook System”). The Original Holbrook Agreement expressly contemplated Aurora’s assignment of rights and obligations thereunder to the ROY Participants. On March 1, 2005, Aurora and the ROY Participants entered into an agreement between themselves (“Original ROY Participants Agreement”) pursuant to which, inter alia, Aurora assigned a portion of its rights under the Original Holbrook Agreement to the ROY Participants on a pro rata basis. On February 23, 2010, Aurora extended the term of the Original Holbrook Agreement for an additional five years (“Original Holbrook Agreement Extension”). On October 6, 2010, Aurora and the ROY Participants entered into a renewed agreement (“Renewed ROY Participants Agreement”) pursuant to which Aurora’s assignment of a portion of its rights under the Original Holbrook Agreement to the ROY Participants was continued. By resolutions, City Council approved the Original ROY Participants Agreement and the Renewed ROY Participants Agreement.
On March 3, 2015, Aurora and Holbrook amended the Original Holbrook Agreement Extension (the “Amended Holbrook Agreement”) to again extend the term of the Original Holbrook Agreement. As a result of the Amended Holbrook Agreement, the ROY Participants have negotiated an amended agreement (“Amended ROY Participants Agreement”) under which Aurora will assign a portion of its rights under the Original Holbrook Agreement Extension to the ROY Participants on a pro rata basis on the same general terms as the Original ROY Participants Agreement, and the Renewed ROY Participants Agreement. The Amended ROY Participants Agreement is necessary to effectuate that assignment and delineate the respective rights and obligations of all ROY Participants with respect to the use of the Holbrook System and actions contemplated by the Original Holbrook Agreement, the Original Holbrook Agreement Extension, and the Amended Holbrook Agreement. Colorado Springs Utilities’ pro rata portion of Aurora’s rights under the Holbrook Agreements is forty-six percent (46%).
Financial Implications:
Colorado Springs Utilities will be required to pay its forty-six percent (46%) pro rata share of the costs to use the Holbrook System. The average annual cost of Colorado Springs Utilities’ share of Holbrook operations pursuant to the Original ROY Participants Agreement (2005-2009) was approximately $51,400 per year. The average annual cost of Colorado Springs Utilities’ share of Holbrook operations pursuant to the Renewed ROY Participants Agreement (2010-2015) was $33,530 per year. It is estimated that the average annual cost under the Amended ROY Participants Agreement will be approximately $34,000 per year.
Board/Commission Recommendation:
N/A
Stakeholder Process:
N/A
Alternatives:
No near term alternatives are practicable. Colorado Springs Utilities’ staff continues to seek and evaluate opportunities to develop a permanent Restoration of Yield process or facility should Holbrook operations become impracticable in the future.
Recommended Action
Proposed Motion:
Approval of the proposed resolution authorizing execution of the Amended ROY Participants Agreement.
Summary of Ordinance Language
N/A