Looking to capitalize on historic-low bond rates, Aurora Water on Thursday sold $437 million in bonds toward re-funding debt associated with its Prairie Waters Project, making it the largest municipal bond issue in the state this year.
With a net savings of $68.6 million, the issue consolidates two other issues and a state loan, water department officials said in a news release.
The Prairie Waters Project was completed in 2010 at a cost of $637 million. It recaptures water Aurora already owns in the South Platte River, beginning in Weld County, and makes full use of Aurora’s mountain and agricultural water rights, increasing the city’s water supply by up to 12 million gallons per day. The water comes from 23 wells that use a riverbank filtration process, pulling water through hundreds of feet of sand and gravel to remove impurities.
The bonds were offered on July 20 and July 21, with first priority given to Colorado residents and businesses.
Aurora has filed a water court challenge to its 2009 agreement with the Lower Arkansas Valley Water Conservancy District, claiming legislation the city itself backed could hurt its ability to remove water from the Arkansas Valley…
HB1228, the latest version of flex water rights legislation Aurora, Colorado Corn and Ducks Unlimited began promoting in 2013, was signed into law by Gov. John Hickenlooper in May. The current bill is titled “Alternative Transfer Mechanism for Water Rights” rather than flex legislation.
During committee hearings, lawmakers tiptoed around saying the bill set up a flex water right. But some members of Colorado Water Congress jokingly called it “Son of Flex” during the process.
The bill allows water to be transferred from farms to other uses five years out of 10, but only within the basin of origin under a new type of court decree. It also requires the Colorado Water Conservation Board and state engineer to approve and develop rules about how to implement transfers on an annual basis.
Aurora’s lobbyist, Margy Christiansen, registered in support of the bill in March. Also in March, Lower Ark officials testified before the CWCB that Arkansas Valley Super Ditch would have no interest in using the legislation because it was too cumbersome.
Lower Ark proposed a different method that has yet to be introduced as legislation.
In a court filing Friday, Aurora’s attorney John Dingess asked Division 2 Water Court Judge Larry Schwartz to limit Super Ditch’s used of HB1228, claiming it would reduce the amount of water available to Aurora to take out of the Arkansas River basin.
One of the provisions of the 2009 agreement between Aurora and the Lower Ark was that Aurora would first attempt to lease water, if needed, from the Super Ditch.
In his filing, Dingess argues that Super Ditch would not be able to lease water to Aurora because the city is outside the Arkansas River basin. He also argues there would be less water available to Aurora because the new bill would make leases available five years out of 10.
In the Super Ditch pilot program, leases are available only three years in 10 from any farm.
Aurora is constrained by its 2003 agreement with the Southeastern District to take water only three years in 10 until 2028. Aurora could lease water in seven years out of 15 until 2043 under the agreement. Aurora is limited to leasing 10,000 acre-feet of water (3.26 billion gallons) annually and only in drought-recovery years.
Finally, Dingess questions the constitutionality of HB1228 because it promotes speculation.
“The change frees up to half the yield of the water right from the anti-speculation doctrine in that neither the type of use nor place of use need be specified in the change decree,” Dingess wrote. “Suspension of the anti-speculation doctrine presents constitutional questions.”
Aurora Water is looking to implement 3-percent increases in water rates every other year beginning in 2017 and going through 2021.
At a study session June 27, Aurora Water presented its financial plan, including the incremental rate increase proposal, to Aurora City Council members as part of an informational session.
Aurora residents haven’t seen a rate increase since 2010, but Aurora Water says it needs the increase in order to meet its continual goal of being able to supply 50,000 new residents on top of the 350,000 plus that make up Colorado’s third-largest city.
Following the meeting, Aurora Water spokesman Greg Baker said the city is still looking into specifically how the rate increase will be implemented. Baker said the increase is needed due to rising costs in chemicals, electricity and personnel since 2010.
In 2013, the city lowered most water tap fees, reducing the cost to connect new homes to the city’s water system by about $8,000.
City officials at the time asked that the water rates be lowered in part to keep Aurora competitive with other metro-area water providers, which they said were affecting the number of housing construction starts.
Aurora Water operates as an enterprise fund with its infrastructure and services being supported through water rates and connection fees that are set on a “cost of service” basis.
Later in the evening, council members approved Aurora Water refinancing $550 million in debt, the savings to be used to help pay for additions and improvements to Aurora’s large and complex water system…
City officials, already eyeing three future reservoirs to grow Aurora’s water storage system, appear to be close to buying land for the future Wild Horse Reservoir in Park County. Lisa Darling, Aurora Water’s South Platte Basin program manager, said at a meeting in April that reservoir is likely to be designed and completed by 2022.
According to city documents, Wild Horse would provide the city with 32,400 acre-feet of water storage. The city is expected to complete the purchase and sale contract for the sea-horse-shaped reservoir by August of this year. Aurora Water officials say the project will cost the city $92 million to build out.
GLENWOOD SPRINGS — In its effort to secure water rights for three proposed whitewater parks on the Colorado River, the city of Glenwood Springs has reached formal or conceptual agreements with a list of opposing parties in the water court case, including Denver Water, but it’s still facing opposition from Aurora and Colorado Springs.
“We have a number of parties that have already settled,” said Mark Hamilton, an attorney with Holland and Hart representing Glenwood. “And while there are still some significant question marks, we think the process so far has been productive and continues to be productive.”
Since December 2013, the city has been seeking a recreational in-channel diversion (RICD) water right tied to three whitewater parks on the popular Grizzly-to-Two Rivers section of the Colorado River, at No Name, Horseshoe Bend and the upper end of Two Rivers Park.
The two wave-forming structures in each of the three whitewater parks would operate under a common water right that could call for 1,250 cubic feet per second of water from April 1 to Sept. 30, 2,500 cfs of water for up to 41 days between April 30 and July 23, and 4,000 cfs on five consecutive days sometime between June 30 and July 6.
The 1,250 cfs level is the same as the senior water right tied to the Shoshone hydropower plant, which is upstream from the three proposed whitewater parks. Glenwood officials have previously said, however, that 2,500 cfs is a better level for boating and floating than 1,250 cfs, and the city wants the flows of 4,000 cfs for five days around the Fourth of July to hold expert whitewater competitions.
But Aurora and Colorado Springs, both as individual cities, and together as the Homestake Partners, have told the water court that Glenwood is seeking more water than it needs.
“Glenwood has ignored the law limiting a RICD to the minimum flow necessary for a reasonable recreation experience, and instead has reverse-engineered its proposed RICD to tie up half the flow of the mainstem of the Colorado River,” the Front Range cities said in a June 2015 statement filed with the court.
And the cities, which own conditional water rights upstream of Glenwood, said that the city’s proposed water right “would dramatically and adversely affect the future of water use in the Colorado River drainage, if not the entire state.”
Hamilton has met twice this year with representatives of Aurora and Colorado Springs, most recently on April 22 in Denver, to see if a deal can be worked out on how much water is appropriate.
“We’re talking,” said Joe Stibrich, the water resources policy manager at Aurora Water. “But, we’ll see where it goes.”
“There are ongoing negotiations and discussions that seem to be productive at this time,” said Kevin Lusk, principal engineer at Colorado Springs Utilities. “Whether or not we can reach agreement, of course, is really up to how those discussions go.”
A status conference with the water court referee is set for June 23. The referee could then decide to send the application up to James Boyd, the judge who hears Division 5 water court cases in Glenwood Springs, or the parties in the case could ask for more time to keep talking before heading to trial.
“We are actively communicating with Colorado Springs and Aurora concerning the possible development of additional call reduction provisions in order to protect future yield to their systems,” Hamilton said. “And we remain hopeful that a stipulated decree may be able to be entered after completion of these ongoing negotiations.”
Glenwood has recently worked out a “call reduction provision” with Denver Water.
“There has been a lot of progress on our end with the RICD discussions,” said Travis Thompson, a senior media coordinator at Denver Water. “In fact, in the collaborative spirit of the Colorado River Cooperative Agreement (CRCA), Denver Water has agreed to allow Glenwood Springs to exceed 1,250 cfs under certain conditions.”
In the CRCA, signed in 2013, Denver Water agreed not to oppose a future recreational water right application if it did not seek flows greater than 1,250 cfs. But given that Glenwood is also seeking 46 days at 2,500 cfs and five days at 4,000 cfs, above the relatively consistent flow of 1,250 cfs, Denver did file a statement of opposition in this case.
Glenwood and Denver have now agreed that Glenwood would reduce its call for the whitewater parks to 1,250 cfs if continuing to call at a higher rate, such as 2,500 cfs, would limit a potential future water project that is described in the CRCA as providing 20,000 acre-feet to the East Slope.
Staff at Denver Water approved such an agreement with Glenwood on March 9, according to Thompson, and Hamilton said a copy would soon be filed with the court.
Glenwood enjoys the support of three “opposers” in the case: American Whitewater, Western Resource Advocates and Grand County, as the entities have filed statements “of opposition in support,” which is an option in Colorado’s water courts.
And Glenwood has now filed formal agreements in water court that it has reached with five other true opposers with a range of issues: Glenwood Springs Hot Springs & Lodge Pool, Inc., BLM, Grand Valley Water Users Association, Orchard Mesa Irrigation District, and Ute Water Conservancy District.
The Glenwood Hot Springs Lodge & Pool is concerned about the project disrupting the deep Leadville limestone aquifer that provides its hot water.
But they’ve reached an agreement with the city that allows them to review construction plans for the wave structures at the Two Rivers Park location and requires the city to monitor the resulting wave structures for five years to watch for scouring of the riverbed, among other provisions.
And an agreement between Glenwood and the BLM was filed with the court in June 2015. It says that if the city needs to cross BLM property to create a whitewater park in Horseshoe Bend then the city will go through the required federal land use process.
The city has also signed a memorandum of understanding with CDOT that moves issues coming from the use of land at the No Name rest area on I-70 out of water court and into a future potential land-use application.
“One of the conditions is that the city will have to work with CDOT as they move forward with building the whitewater park, as the (No Name) location falls in CDOT right-of-way,” said Tracy Trulove, a communications manager for CDOT. The agreement has yet to be filed with the court.
The city is also close to finalizing agreements with the Colorado River District, the town of Gypsum, and the West Divide Water Conservancy District, according to Hamilton.
Peter Fleming, general counsel for the Colorado River District, which represents 15 West Slope counties, said staff at the district is now comfortable with proposed settlement language in the Glenwood case.
And he said once the district’s initial goals in a RICD case are met, the district often stays in the case on the side of the applicants “in order to support the right of its constituents to use water for recreational purposes that will support and/or enhance the local economy.”
“We anticipate that such participation may be necessary in the Glenwood Springs RICD case,” Fleming said.
At the end of the list of opposers is the Colorado Water Conservation Board, a state agency whose board of directors in June 2015 recommended against the proposed RICD after concluding it would “impair Colorado’s ability to fully develop its compact entitlements” and would not promote “the maximum beneficial use of water” in the state.
“While we stand by our initial decision on this RICD, we’re encouraged that the applicants are actively seeking resolution with stakeholders and hope they will resolve the issues we raised,” James Eklund, director of the Colorado Water Conservation Board, said this week.
Eklund said the CWCB staff will likely reconsider Glenwood’s proposal after it has reached agreements with other opposing parties in the case, and if staff is satisfied, bring the proposed decree back to the board.
“Water for recreation in Glenwood Springs and around Colorado is essential and we want to make sure all RICDs strike the right legal, design, and safety balance,” Eklund said.
Editor’s note: Aspen Journalism and the Aspen Daily News are collaborating on coverage of water and rivers in Colorado. The Daily News published this story on Saturday, April 30, 2016.
City officials, already eyeing three future reservoirs to grow Aurora’s water storage system, appear to be close to buying land for the future Wild Horse Reservoir in Park County.
Aurora’s water system consists of 12 reservoirs that span the Front Range and Continental Divide, providing the city with more than 156,000 acre feet of storage located in three water basins. But even though they can supply the city with years of emergency supply in case of a drought, city officials say demands for water are increasing and that they will need more storage to provide services to potentially 600,000 residents in the coming decade.
Lisa Darling, Aurora Water’s South Platte Basin program manager, said that reservoir is likely to be designed and completed by 2022…
According to city documents, Wild Horse would provide the city with 32,400 acre-feet of water storage. The city is expected to complete the purchase and sale contract for the sea-horse-shaped reservoir by August of this year. Aurora Water officials say the project will cost the city $92 million to build out…
[Greg] Baker said Wild Horse has been easier to negotiate in part because it is being built on private land owned by Hartsel Springs Ranch in Park County. He said the owners see the economic opportunity in the recreational elements the reservoir will provide once completed.
Wild Horse will also be located 10 miles above Aurora’s Spinney Mountain Reservoir, which is also in Park County, meaning the city will not have to acquire additional water rights through court to use it.
The other two reservoirs planned are the East Reservoir and Box Creek.
The East Reservoir, which city officials began researching as a site in 2012, would sit just east of the Aurora Reservoir on the former Lowry Bombing and Gunnery Range. Darling said it could be completed in the next decade. Aurora Water is still in the land acquisition process with the Colorado State Land Board and the Rangeview Metropolitan District.
Darling said the East Reservoir project has been held up in part by federal agencies, who for years have been working to find unexploded ordinances that potentially remain on the site and could be harmful if not detonated properly.
One not-so-bright spot for the city is completing Box Creek, a site north of Twin Lakes in Lake County.
“The (National) Forest Service has been less than helpful to date,” said Aurora Water Resources Management Advisor Joe Stibrich about ongoing negotiations over the Box Creek site…
Aurora’s 12 reservoirs include Aurora, Quincy, Rampart, Strontia, Spinney, Homestake, Jefferson Lake, Twin Lakes, Pueblo, Turquoise, Henry and Meredith.
With assurances Denver would not be coming after San Luis Valley water in the near future, the Rio Grande Roundtable this week approved $10,000 to support a south metro Denver area water project.
The decision was not unanimous, however, with opposing votes coming from Juanita Martinez, who represents Costilla County water groups, Ron Brink, who is an Alamosa County representative on the roundtable, and Gene Farish, attorney for multiple municipalities in the Valley.
Sixteen other members of the roundtable voted to support the WISE (Water, Infrastructure and Supply Efficiency) Project with $10,000 from the funds allocated to the Rio Grande Basin. The other basin roundtable boards throughout the state have financially supported the project, which will recycle water from the Denver and Aurora water systems to south metro water providers and their customers.
The treatment plant for the project will cost about $6.5 million. The south metro water providers have already purchased pipeline to transport water from the Denver and Aurora systems to southern metro areas like Highlands Ranch and Castle Rock.
Eric Hecox, executive director of the South Metro Water Supply Authority, made the initial presentation for the $10,000 request to the roundtable in January and made the formal request to the board this week. He said this project would reduce the draw on nonrenewable groundwater resources that have traditionally supplied the southern metro communities.
He said the project would also reduce the metro areas’ need to look to agricultural transfers or other basins for water supplies.
Hecox stressed that the water providers he represented were not after Valley water, and if they did look to other water sources outside of Denver, it would be the Colorado River system or South Platte, not the Rio Grande system.
It’s been proposed to move San Luis Valley water in the past,” he said. “There’s water projects proposed . We have not had any discussions with them. Our members have not had any discussions with them. The planning work we are doing is looking at basin solutions in the South Platte Basin or other partnerships with has support from throughout the state.
She said even though the basin might only be providing $10,000, “what you are getting is a lot more good will for yourselves “you are getting a good standing.”
She explained to Hecox that irrigating in the area she represents is still accomplished through shovels and opening irrigation ditches, and although she was fascinated by this project , which would use “left over discarded water,” she was skeptical about it.
She said she was opposed to the motion for funding, and everyone she spoke to in her county told her to not even consider it. She pointed to the Arkansas Valley where farmland has been dried up so people in the Denver area can have nice lawns and golf courses.
“It’s almost like a ghost town driving through there. It’s sad and it breaks everybody’s heart,” she said. “It’s even hard to talk about.”
Brink, who also voted against the funding, said the Denver area does not even recognize the Valley “except when they want some money or water.”
He added, “I am totally against this.”
Hecox said the project was not asking much money from the basin roundtables across the state, but one of the reasons for seeking some support from them Denver.”
Martinez said if the metro water group had no interest in the Valley’s water, then it must water “our good name” to show that it was to show cross-basin cooperation. He added that the metro water providers were trying to find solutions that would use renewable supplies, such as those from Denver and Aurora, rather than continuing to deplete nonrenewable supplies. He said the communities served by the south metro providers have also implemented significant amounts of conservation programs.
“That will go on and continue to reduce outside irrigation in south metro,” he said.
He said conservation efforts have reduced per capita water use by 30 percent over the last 10-15 years.
Rio Grande Water Conservation District Manager Steve Vandiver said he had raised concerns about supporting this project when it was initially presented, and the concern about “completing the loop” that would make it easier to export Valley water to the Denver area was still a concern of his.
However, he said after speaking further with Hecox, he believed the metro water authority had the Valley’s best interest in mind.
“They have convinced me that the project as it exists today is going to delay the need for outside supplies outside of the South Platte Basin,” he said.
Roundtable member Dale Pizel said, “There’s obviously some distrust between the San Luis Valley and the Front Range, for good reason, because we have been beaten up pretty good and had to fight off some pretty serious battles, but if we don’t solve Denver’s water problem, it’s going to keep coming back, “They are going to keep coming after our water.”
He said the Valley water leaders needed to put their distrust aside and help Denver and the Front Range solve their water problems so they don’t come after the Valley’s water.
Roundtable member Judy Lopez agreed. She commended the Denver area water providers for working together to address their water needs among themselves .
Vandiver said this project would be built whether or not it receives the Valley’s support. He wanted the minutes to reflect that the Valley supported the project with some reservation and concerns.
“We do this with some trepidation but want to support these efficiencies and conservation efforts on the Front Range to try to keep the monkey off our back as long as we can,” he said.
Some folks were a bit wary of a request this week from a Denver metro group for financial assistance with a water project that local water leaders were concerned might facilitate water exportation from the San Luis Valley to the Front Range.
Eric Hecox, executive director of the South Metro Water Supply Authority, asked members of the Rio Grande Basin Roundtable water group this week for $10,000 from the roundtable’s basinallocated funds for the WISE (Water, Infrastructure and Supply Efficiency) Project.
Hecox made his initial presentation this week and will return next month with the formal funding request. He told local roundtable members he had already visited the other eight basin roundtable groups throughout the state and they had been supportive of putting $10,000 each into this project in an effort to show cross-basin cooperation and support for local projects.
Hecox said the basin support would help leverage money from other sources and serve as a cash match. He said while most of the basin roundtables committed to $10,000 each, the metro basin committed $40,000 and the South Platte roundtable $15,000 towards the WISE project.
Hecox explained that the South Metro Water Supply Authority is made up of 13 independent water providers that serve areas like Highlands Ranch, Parker and Castle Rock.
What brought these groups together, Hecox explained, was their common issue of having non-tributary nonrenewable groundwater as their water supply. The group has been working together towards a better water source solution since the 1960’s and 1970’s , Hecox said, and had participated in the Two Forks Project, a dam project that never materialized . “Two Forks going away didn’t change the need for storage,” he said. To roundtable member Charlie Spielman’s comment that Two Forks was being built one gravel pit at a time, Hecox said rather than one big bucket, there are lots of smaller buckets filling that same need, and there are a lot of gravel pits being used for water storage.
“That’s not a component of our project,” he said. The authority has tried to reduce water use through significant conservation efforts , he added, and the per capita water use in their communities has decreased by 30 percent since the 2000’s .
The latest idea prompting the WISE project is to partner with Denver and Aurora water providers, which do have renewable supplies, to reuse their municipal effluent , Hecox explained. The WISE project will encompass a treatment facility that will treat that water so it can be distributed to participating communities through existing pipelines. The authority purchased the pipeline for $34 million, Hecox said, which is being changed from its original use to be used for this project.
The authority will pay Denver and Aurora $5.50 per thousand gallons to use their water supplies, pipe the water, treat it and distribute it to about two million people in the South Metro Water Supply Authority area.
Groundwater and surface water will be comingled in the pipeline, Hecox explained . He said the funding being requested from roundtables as a local match will help build a treatment plant for the groundwater, which will cost about $6.4 million.
The authority is combining $5.4 million in matching funds and will submit a grant request for $915,000, according to Hecox.
Hecox said the Rio Grande Roundtable should support this project because it addresses the statewide gap between supply and demand and because it would support the new approach of regional partnerships to address water issues throughout the state.
Hecox said that the communities in the South Metro authority have, much like many water users in the Rio Grande Basin (San Luis Valley), relied on groundwater resources, so they are trying to become mores sustainable, and the option of reusing Denver/Aurora effluent is one method of accomplishing that. The WISE project will allow area water resources to be reused multiple times, Hecox explained.
The water that the authority will be buying from Denver and Aurora was previously going down the South Platte, Hecox said.
“This will use water that was going downstream,” he said.
He added that Aurora had a few short-term leases on its water previously, but this would be a permanent one.
The authority is guaranteed supplies from Denver and Aurora until 2030, he said.
Roundtable member Steve Vandiver, general manager of the Rio Grande Water Conservation District, said this seemed to be opening up a new distribution system for the entire metro area that would make it easier to import water from other parts of the state, such as the Valley. He added that there is an export project currently proposed in the northern part of the San Luis Valley, and there have been continuous overtures over time from water speculators wishing to benefit from exporting water out of the Valley. It would seem that the WISE project would fit right into their plans, he said.
Hecox admitted the WISE project would not meet all of the metro water needs in the future, and the authority is looking at other water sources such as a cooperative project with Denver and the West Slope as well as an alternative agriculture transfer program in the South Platte Basin.
He said when the authority began the WISE project it was looking at a need for 60,000 acre feet of reusable supplies. With the WISE project, the authority is now looking in the 15,000-30 ,000-acre-foot range “above and beyond this,” he said.
He said some of Aurora’s water supply is coming from the Arkansas Basin “but none from the San Luis Valley/Rio Grande Basin.”
He said, “To my knowledge Aurora is not looking at any supplies in the Valley or the Rio Grande.”
Vandiver said the likely plumbing for any export from the San Luis Valley would be through the Arkansas Basin.
The plan we have seen would come out of here to the Arkansas,” Vandiver said. “This completes the pipeline from us to south metro ” The concern for us is that’s not necessarily a good thing for the Valley.”
Hecox said when this project began, Denver water leaders were concerned their water would be used for additional growth in Douglas County, and there are areas that are zoned, platted and designated for development, but the houses have not yet been built. He added that developers in Douglas County had not yet approached the metro water authority or its members to use the WISE project water.
He said the purpose of the WISE project would be to reuse existing water supplies for existing communities.
The roundtable took no action on Hecox’s request this week but may do so next month.