BOARD00671

• Board Meeting Date: 3/21/2006
• Description: CF Section - Construction Fund and Severance Tax Trust Fund Perpetual Base Account New Loans - Town of Keenesburg - Raw Water Pipeline and Well Purchase
• Board Meetings - Doc Type: Memo

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Town of Keenesburg
March 21-22,2006

Agenda Item 17c

pursuant to the terms and conditions of two recent court decrees: 1) Case No. 9SCV1727 entered
on May 10, 2004; and 2) Case No. 99CV0097 entered on June 1,2004.

The Town and the seller, PV Water & Sanitation Metropolitan District (PV Water), have executed a
"Letter of Intent" to enter into a contract for purchase of the approximately 139.6 acre feet of water
associated with Well Permit No. 31652 - FP, for a purchase price of $1, 116,SOO. The letter was
executed on February 21, 2005 by Mark Gray, Mayor of the Town of Keenesburg, and Harvey
Deutsch, President, PV Water & Sanitation Metropolitan District. PV Water will retain the right to all
delivered water that is not consumed and is available to be recaptured, and the amount of
recaptured water available after the first use of the usable water shall be 77.7 acre feet annually of
the purchased rights.

cweB staff required that the applicant submit a written appraisal or opinion of value from a
qualified water rights appraiser supporting the purchase price. A valuation of the water rights has
been submitted by Mr. Robert Tafelski, Principal, HRS Water Consultants, Inc. It is their opinion
that the value of the 139.6 acre feet per year of subject water is $7,500 to $S,OOO per acre foot, or a
total value of approximately $1 to 1.1 million. The proposed purchase price of the water is
$1, 116,SOO, or $S,OOO per acre foot.

Project Description

The purpose of this project is to provide improved water quality for the Town of Keenesburg. Four
alternatives were considered for the project including:

1. No-action alternative
2. Purchase of PV Water
3. Purchase of an Un-named Lost Creek Well
4. Development of the Town's Existing Roggen Wells

Alternative 1, No-action alternative - This alternative was not considered as the Town's existing
water quality does meet acceptable fluoride and sodium standards.

Alternative 2, Purchase of PV Water - This alternative includes the purchase of 139.6 AF of well
water rights in the Lost Creek Groundwater Basin, construction of a replacement well, construction
of 5.5 miles of S" transmission pipeline, and completion of the water blending facility at the Town's
existing water tank. The estimated cost of this alternative is $2.3 million.

Alternative 3, Purchase of an Un-named Lost Creek Well- This alternative involves the
purchase of water from an unnamed landowner located in the Lost Creek basin, assumed to be a
farm located in the middie of the watershed. It would require 9.2 miles of S-inch piping to deliver
water to the existing Town water tanks, including two lift stations. Alternative 3 includes a 6.S-mile
wastewater return pipeline and improvements on the farm to store water and pump the water into a
sprinkler system. Costs for the purchase of water are not included because that cost is not
currently known. It is anticipated that the cost would be minimal because the Town would be
returning its wastewater to the landowner for irrigation purposes. The estimated cost of this
alternative is approximately $4.0 million.

Alternative 4, Development of the Town's Existing Roggen Wells - The Town also owns two
Laramie-Fox Hills wells near Roggen, nine miles away, that are not being used because there is no
connecting pipeline from the wells. This alternative would construct approximately 10.2 miles of
new water line to transport the 247 acre feet of water to the proposed Keenesburg water tank site.

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