15d

• Board Meeting Date: 7/11/2007
• Description: CF Section - New Project Loans - Town of Hillrose - Water Rights Purchase/Well Augmentation
• Board Meetings - Doc Type: Memo

Town of Hillrose
July 11-12, 2007

Agenda Item 15d

Affairs (DOLA), has undertaken a major water supply project to connect to MCQWD for potable
water supply. This will include the purchase of a potable water supply (64 tap equivalents for
the maximum indoor usage), a new potable distribution system, and a centralized above-ground
storage tank, and individual meters. The Town's existing well and distribution system will be
converted to outside irrigation use, and will continue to be covered under the LP & B
augmentation plan. This change is anticipated to be complete in the Fall 2007. The Town
expects to receive approximately 12 AF per year from MCQWD for indoor use.

In a normal year, the Town's total usage is about 40 AF (28 AF outside irrigation), and in the dry
year (restricted watering scenario) is about 26 AF (14 AF outside irrigation). The LP & B
allocates the Town a certain amount of well pumping allocation to shareholders each year
based on the amount of share ownership, and the amount of LP & B bypass flow and
groundwater recharge in the previous year. The Town currently owns 1 '!12 shares of LP&B, but
leases additional water to meet their pumping needs. The proposed purchase of 6 shares of LP
& Bat $8,000 per share will provide the Town 9.675 AF (1.29 AF/share) of pumping allocation in
dry years, and 19.35 AF (2.58 AF/share) of pumping allocation in normal years. (In some years
it may be more than this, as in 2006 the pumping allocation was 3.87 AF per share.) In average
years, the Town will need to continue to lease additional pumping allocation to make up its
deficit, and in dry years the Town will institute water restrictions, as in the past. The proposed
purchase of the 6 LP & B shares is a significant step toward meeting the Town's "dry-year"
outside water need, where they are most vulnerable. In addition to receiving the pumping
allocation, the Town retains the direct flow rights from the 7 '!12 shares, which can be leased for
irrigation or traded for additional pumping allocation.

Also, in July 2004, the Town, through its Water Activity Enterprise Fund, obtained a CWCB loan
for $69,311 to purchase surface water rights to use for well augmentation. The water
purchased was 2 shares of Jackson Reservoir and % share of Riverside Reservoir for use as
well augmentation water. The Town was not been able to incorporate the Jackson and
Riverside shares directly into the LP & B Plan, as originally planned, or pursue a change of use
on its own. The Town has been leasing out these rights, in turn using the revenue to lease
more compatible water for usage in the LP & B plan. These shares continue to be a usable
asset with which the Town can facilitate its current well pumping needs, or use in the future if
the Town were to pursue its own augmentation plan.

Feasibilitv Studies

Brent M. Nation, P.E. of Fort Morgan has completed the feasibility study in accordance with
CWCB guidelines. The study includes an assessment of alternatives on how to generate
augmentation water supply for the Town.

Town of Hillrose

The Town was incorporated in 1919, and is governed by a 5 member Board of Trustees,
including the Mayor. The Town has a water enterprise fund as well as a separate sewer
enterprise fund.

Water RiQhts

The proposed purchase of 6 shares of LP & B will provide the Town with 9.675 AF (1.29
AF/share) of pumping allocation in dry years, and 19.35 AF (2.58 AF/share) of pumping
allocation in normal years, possibly more. The LP & B has decrees on the South Platte River

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