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I I I I I I I I I I I I I I I I I I I DRAFT 8/24/92, Page 14 4. Less Able to Make Water-Related CaDital Investment -- Most of the water supply projects that would be economically viable for agriculture in the South Platte were built by the turn of the century or later developed by the Bureau of Reclamation with major subsidies for agricultural users. Further, as evidenced by the depressed markets for agricultural products and federal programs to remove marginal lands from production, there is little, if any, demand for increases in production. _ 5. Pressure to Sell Water to Municioalities -- Many Front Range cities including Aurora, Colorado Springs, Thornton, Northglenn and others have turned to the purchase of agricultural supplies to meet future needs, and many farmers have been actively marketing their water rights. The explanation for this trend is apparent in the relative value of water used in the agricultural and municipal sectors. The direct marginal value productivity of irrigation water for many crops is in the range of $25 to $75 per acre-foot (Gray 1989), while the value of municipal water, based on current supply costs, is approximately an order of magnitude higher. Irrigated agriculture is generally perceived by cities as a major source of future water supply. Traditionally cities have acquired agricultural water rights through the permanent removal of agricultural lands from irrigation. Some cities have taken alternative approaches toward acquiring agricultural supplies including interruptible supply contracts, exchanges and first use agreements. The best possibilities for transfer of agricultural water into metro Denver involve the northern front range, which includes agricultural lands diverting more than 2 million acr~ feet of water per year. In addition, cities to the north with surplus Windy Gap water are now interested in marketing water to cities in the metro Denver area. At this time the Northern District is attempting to consolidate the water conveyance and delivery requirements of individual cities in the northern tier of metro Denver including Thornton, Westminster, Broomfield, and Arvada. There are good possibilities for transfers of water that could be beneficial to both Metro Denver and Northern District water users. Additional work is needed in this area to define the mechanisms necessary to achieve such transfers and to identify opportunities for coordination of current piecemeal and competing efforts. 1. Conventional Purchase and Dry-up Acquisition and dry-up of irrigated lands and transfer of water rights has been the most common approach to making agricultural water available for use by municipalities. The irrigated lands are removed from production, or converted to dry-land crops, and water rights and points of diversion are changed through water court proceedings. Such transfers are generally limited to the amount of consumptive use associated with the original irrigation of crops. Historically acquisition of agricultural water rights by front range cities has been ongoing since the early 1880's, and nearly all metro area cities currently rely to some degree on previously acquired agricultural water rights. Originally these transfers occurred in a relatively passive and incremental manner as local farms were urbanized by growth of citIes. More recently, cities have acquired larger tracts offarmlands farther from their borders. The City of Aurora has been particularly aggressive in this arena, beginning with acquisitions of many agricultural water rights in South Park and extending most recently to Arkansas River Basin. Since 1983, Aurora has acquired over 20,000 acre-feet of agricultural water rights from the Arkansas, including rights to Rocky Ford Ditch.