PROJ00432

• Contract/PO #: C153738
• Contractor Name: Georgetown, Town of
• Contract Type: Loan
• Water District: 6
• County: Clear Creek
• Bill Number: SB 96-153
• Loan Projects - Doc Type: Feasibility Study

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c. Lease water shares from the Vidler Tunnel.

Water rights could be purchased through a perpetual lease that would provide Georgetown
with ample water for their needs.

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The major problem with this alternative is cost. Vidler Tunnel water is leased at annual rates
that are relatively high. Long-term leases have an escalating rate clause that allows the price
per share to be tied to the consumer price index. Hence, long-term costs associated with this
option are likely to be high.

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The present price of senior water from the Vidler Tunnel is approximately $1,600/acre-foot
per year. Assuming an interest rate of 7 percent, today's price would be equivalent to a
present worth of approximately $22,860/acre-foot. Although this compares with the cost of
FHL water, under a long-term lease this price will likely escalate and become very costly to
Georgetown.

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Vidler Tunnel water allows Georgetown the flexibility to alter the method of acquiring water
rights in the future.

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This alternative is feasible but is not preferable for the Town. The cost is relatively high and
likely to escalate significantly in the future.

The Selected Project

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The Town of Georgetown has decided to acquire l'h shares of water rights from the FHL. An
augmentation plan will be prepared and presented to the Water Court for approval.

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Georgetown is proposing to acquire sufficient water rights to account for the maximum potential
depletions that could result from the Town's domestic needs during dry-year conditions. The plan of
augmentation plus an arrangement for storage of excess depletion credits will be necessary to replace
daily deficits and make up of historical winter time return flow obligations of the FHL shares.

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This alternative begins a program of water rights acquisition that will lead to Georgetown eventually
obtaining sufficient water rights to account for all domestic uses, growth, and evaporative losses from
Georgetown Lake.

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The amount of water associated with one share of FHL varies depending on the hydrologic conditions
of a given year. During a very dry year a share provides consumptive use of about 7 acre-feet; 11h
shares yields about 10.5 acre-feet.

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By acquiring FHL water rights, Georgetown would pay for depletion credits associated with the l'h
shares. Combined with a properly designed plan of augmentation, these water rights would be used
to augment out-of-priority diversions by Georgetown's 1/10/1866 water right. The plan of
augmentation will include an arrangement to store excess FHL credits, which could be used to replace
depletion debits when they occur. This stored water will also be used to make up the historical
winter return flows of the FHL shares purchased.

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Feasibility Study: Town of Georgetown
Water Rights Acquisition Project
January 1996

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