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City of Lamar Agenda Item 23b September 15-17, 2015 Board Meeting(Updated September 18, 2015) Page 2 of 8 Background The City of Lamar (City) is located in Prowers County in southeastern Colorado. It provides water service to a population of approximately 7,800 people in a four-mile service area. The City, through its Water and Wastewater Department, has been providing water and sewer services to its residents for over 135 years. Although the City has undertaken numerous upgrades, rehabilitation, and expansion projects over the years, most of the existing infrastructure was funded and built during New Deal-era programs. The City's Wells 12 and 13 were developed in the 1950s and used for municipal supply until 2012, when Microscopic Particulate Analysis water quality testing was conducted, resulting in a reclassification of both wells as Ground Water Under Direct Influence of Surface Water (GWUDI) by the Colorado Department of Public Health and Environment (CDPHE). The wells were taken out of service at that time. A Feasibility Study conducted in 2014 concluded that it is feasible to redevelop both wells for non-potable municipal irrigation use. Once this Project is completed, the repurposed water can be used for any non-potable municipal application, including irrigation of a City-owned cemetery and a golf course, both of which are currently watered with a combination of potable and non-potable water. Loan Feasibility Study Elise Bergsten of Balanced Management Services Co. prepared the Loan Feasibility Study, titled "Feasibility Study - Repurposing of Lamar Wells #12 and #13" dated August 2015. Technical support was provided by Andrew Sparn, P.E., of JVA, Inc. The study includes an analysis of alternatives and a construction cost estimate. The feasibility study was prepared in accordance with the CWCB guidelines. Borrower - City of Lamar The City was founded in 1886. The City's water service is operated as a Water Activity Enterprise servicing 3,000 residential taps and 500 commercial taps. Enterprise revenues come from water sales, facility investment fees, and water leases to farmers. The Water Conservation Act of 2004 requires an approved Water Conservation Plan, prior to executing a loan with the CWCB, if the City delivers more than 2,000 AF of water annually. In 2013 and 2014, the City's deliveries have averaged at 1740 AF, below the 2,000 AF annual delivery threshold, and thus the status of the City's Water Conservation Plan, approved in 2009, is not a factor to be considered in the City's loan application. Water Rights The City owns a portfolio of groundwater and surface water rights. Groundwater rights in the form of wells are primarily used for potable water supplies, and the surface water rights are used for municipal irrigation and augmentation. Lamar owns 3,200 shares of the Fort Bent Ditch Company, 350 shares of the Lamar Canal Company, and 293 shares of the Lower Arkansas Water Management Association. The City is also able to purchase Fryingpan-Arkansas Project water from the Southeastern Colorado Water Conservancy District. The City has groundwater rights to 43 wells for use in the water supply system. Of these, 26 are active potable water sources. Raw water from the wells is pumped to a chlorination building and stored post- treatment in above grade storage tanks. The remaining 17 wells are scattered throughout the City and used for park irrigation, the City's maintenance shop, and the airport. The source for Wells 12 and 13 is the Clay Creek Alluvium. The alluvium is recharged from Ft. Bent shares as well as Project Water Recharge.