Colorado Springs Utilities will book significant revenue from their supply deal with the Cherokee Metropolitan District

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From The Colorado Springs Gazette (John Schroyer):

Utilities has been working on a deal with The Cherokee Water District, on the eastern edge of Colorado Springs, under which Utilities will deliver a minimum of 500 acre-feet of water per year. That could net up to $738,000 for the city next year, and as much as $900,000 in 2013. And the deal, as they say, is nearly sealed.

Cherokee relies mainly on groundwater [ed. Upper Black Squirrel designated groundwater basin], but as time goes on that source has been dwindling. In the past, Utilities has provided water to Cherokee on an emergency basis, but last April, the City Council gave Utilities the go-ahead to write up a contract that would grant Cherokee reliable water delivery.

On Wednesday, Utilities Water Services Division General Manager Wayne Vanderschuere presented the contract to the board. Under its terms, Cherokee has to pay Utilities at least $2.4 million next year for a minimum of 500 acre-feet of water service, with a cap of 1,000 acre-feet for $4.4 million. The price, which Vanderschuere said is expensive, is 9.32 cents per cubic foot. That price, however, can be reduced for Cherokee if it finds alternate sources for water, instead of buying directly from Utilities. Cherokee still would have to pay for delivery (i.e. use of Utilities’ piping system), but Utilities could save more water for its residential customers. The city’s share of the $2.4 million minimum is $400,529, and the maximum is $738,833. In 2013, the minimum would drop to $299,186, but the maximum would increase to $907,710.

Board President Scott Hente practically clapped his hands in delight. “It’s a win for all of us,” Hente said happily. “There are all kinds of things we could do with that money. We worked out a great deal.”

More Cherokee Metropolitan District coverage here and here.

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