PROJ01951 ‎(3)‎

• Contract/PO #: C150131
• Contractor Name: Paonia, Town of
• Contract Type: Loan
• Water District: 0
• Loan Projects - Doc Type: Approval Letter

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STATE OF COLORADO

Colorado Water Conservation Board

Department of Natural Resources
1313 Sherman Street, Room 721
Denver, Colorado 80203
Phone: [phone]
FAX: [phone]
www.cwcb.state.co.us

MEMORANDUM

Bill Owens
Governor

FROM:

Colorado Water Conservation Board Members

Bruce Johnson, P.E. ~~. .
Mike Serlet, P.E., Chief
Water Supply Planning ~nce Section

Greg E. Walcher
Executive Director

TO:

Rod Kuharich
CWCB Director

DATE:

January 10, 2003

Dan McAuliffe
Deputy Director

SUBJECT: Agenda Item 19f, January Board Meeting
Water Supply Planning and Finance Section - New Loa~ls
Town of Paonia - Purchase of Water RightslWater Taps

Introduction

The Town of Paonia, acting by and through its Water Fund (enterprise fund), is geeking a new loan
for $1,000,000 for the purchase of water rights, in the form of a repurchase and retirement of 317
unused out-of-town water taps associated with several nearby parcels of land (tlile Ark Land
Property.) Acquisition of the taps will implement the first step in a long-term ra~ Water Supply
Master Plan strategy, will relieve the Town of a severe strain on its water suPplYisystem by
realigning water supply capability and projected water demands, and alleviate tHe necessity of
immediate construction ofa major water storage project. The total cost of the p'roject is
$1,900,000, with CWCS loan funds being requested to repurchase the water taRs, and the Town
responsible for securing the additional funding for purchase of the land.

Backaround

CWCS has been working with the Town off and on since 1994 on possible ways to increase water
storage. In 1995, a Construction Fund Loan was authorized for $600,000 for a ~ew reservoir project
(HS 95-1155), but agreement was never reached on construction. In July 1999, GEl Consultants, Inc.
was hired, with the assistance of a $10,000 CWCS grant, to further study ways td improve the Town's
raw water supply system. A draft April 2000 study evaluated a number of stor~ge alternatives and
concluded that a staged expansion of the nearby Lone Cabin Reservoir woul(:l be the most cost
effective storage option. Another key conclusion of the study was that the To~n had a significant
amount of standby water taps (407) that had the potentia/to severely stress the Town's water supply in
dry years if all of the taps were developed.

,
In January 2002, representatives from the Town, CWCS and the current engineering consultants
CN.W. Wheeler & Assoc., Inc., in association with Westwater Engineering) met ahd agreed to finalize
the draft report in a Master Plan format, with the first step being to work toward re:.acquiring 317 of the

Flood Protection. Water Supply Planning and Finance. Stream and Lake Protection
Water Supply Protection. Conservation and Drought Planning