The Woodmoor Water and Sanitation District October 17 board meeting — lots of questions about the JV Ranch purchase

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Here’s the link to the Q&A session at the meeting. Here’s an excerpt:

Why did the Board decide on revenue bonds instead of voter-approved general obligation bonds?

Through several meetings with the JV Ranch sellers, the District and the Sellers negotiated the terms and conditions of the contract. Throughout that process the District determined that the Sellers would not enter into a contract with Woodmoor if the sale was contingent on a general obligation bond vote. Ultimately, the Board has the authority to issue revenue bonds and set rates to repay those bonds. The Board, when presented the merits and value of the JV Ranch, decided to proceed with revenue bonds in order to finalize the purchase of this unique asset for the District.

What is the timeline and current cost estimates for delivery of the JV Ranch water?

Phase I of Woodmoor’s Renewable Water Plan is to acquire the renewable water asset. Until the District is ready to embark upon construction of the delivery infrastructure, the JV Ranch will continue to operate as a cattle ranch. It is critical for Woodmoor to own and control its renewable water rights, and acquiring senior renewable water rights has always been the Board and staff’s first priority.
After the District closes on the JV Ranch water rights and completes the necessary water court processes, the water rights will be available for the District to use. The District will continue to refine all available options for the infrastructure portion of its Renewable Water Plan. These options include pump stations, pipeline and water-treatment facilities. This infrastructure can be viewed as Phase II of our plan.

The District staff anticipates updates to the Long Range Planning documents in 2012 that will continue to explore and evaluate all options and alternatives available for delivering the JV Ranch water to our customers. Some of the alternatives to be evaluated will include continued discussions with neighboring water districts and entities including Colorado Springs Utilities (CSU) to share in the cost of water delivery, storage, and treatment facilities or the potential to utilize CSU infrastructure for water delivery instead of Woodmoor constructing the necessary infrastructure on its own.

Cost estimates for water delivery have ranged from $30 million to over $100 million. At this point, it would be premature to assign any further cost estimates to Phase II. Every option that is evaluated during current and future planning processes will have specific costs, benefits, and drawbacks. The Woodmoor staff will perform the same level of diligence for this planning as it did on the JV Ranch water rights to ensure that District customers are provided with the most cost effective and reliable option for its renewable water infrastructure. Current estimates for when Phase II would be needed indicate sometime between the years 2020 and 2030.

What happens if the water court does not approve the transfer of water from agricultural use to municipal use?

Changes of water rights have been denied by the water courts only if the applicant does not have actual end users for the water or if the water rights proposed to be changed have not been historically used for their decreed purposes. The District has end users for the water – its customers – and the District’s due diligence has confirmed that the JV Ranch water rights have historically been used for their decreed agricultural purposes. In addition, the historical use of the majority of the JV Ranch water rights has already been quantified in previous water court proceedings. Under these circumstances, it is not likely that the water court would completely disapprove the transfer of the water rights from agricultural use to municipal use. However, if that were to occur, the District would take the steps needed to remedy any deficiencies noted by the water court and then file another application to change the water rights.

What is the reliability and quality of the water from JV Ranch?

The JV Ranch water is diverted from Fountain Creek, south of Colorado Springs. The District and its water quality consultants have reviewed the water quality along Fountain Creek and have determined that treatment technology is available to treat this water to meet all State and Federal drinking water regulations.

More Denver Basin aquifer system coverage here and here.

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