MEMORANDUM

To:

Mayor and City Council

From:

Phil Overeynder, Utility Engineer, Special Projects

Through:

David Hornbacher, Utilities and Environmental Initiatives Director

Date of Memo:

November 30, 2012

Date of Meeting:

December 3, 2012

Re:

Responses to Questions Regarding Ruedi Water Acquisition

_____________________________________________________________________________________
The following are responses to questions raised by Council members during the November 26 City
Council Meeting. It is intended to supplement the information presented in the November 14, 2012
Council memo. Also included is an update regarding the contractual arrangements necessary if council
elects to move forward with the purchase.
Section 1. Answers to questions raised by City Council
1. Question. What are the possibilities for selling Ruedi water if, as a result of further study, the City
determines that none of the longer term water development projects will be necessary in response to
future changes in climate and the occurrence of earlier runoff? In other words, if it turns out that a water
supply hedge against future changes in climate is unnecessary, is it possible to resell any interest obtained
through the proposed agreement?
Answer. The Colorado River Water Conservation District (River District) is working with the USBR to
develop a brokerage arrangement to address these types of situations which may occur in the future. The
USBR would permit the assignment of the rights to the River District. The River District would then act
as a broker to locate and arrange for a transfer of either a part or the entire amount of water purchased by
the City to another buyer. A caveat is that it may be necessary to prepare an additional Environmental
Assessment if the type of use and timing of the water releases differ from the uses anticipated and studied
with the initial purchase. (document anticipated to be prepared by USBR. ) Federal law does not allow
any seller to profit from the sale, but it would allow for recovery of the funds invested in the Ruedi
project. There are no guarantees that there will be willing buyers in the future. However, since this is the
last large quantity of unobligated water to be marketed from a west slope reservoir, it is anticipated that
future demand for water will continue at or above present levels. As noted under the discussion of
alternatives, alternative purchases come with a higher price tag when considering long term costs of the
proposed water purchase.

2. Question. When not required for the purposes described in the staff report, is it possible to utilize the
water for other purposes such as in stream flow enhancement?

 Answer. Generally it is possible to do so through an agreement with the Colorado Water Conservation
Board (CWCB). However, if the City intends to do so, it would be wise to signal this to the USBR prior
to preparation of the Environmental Assessment, in order for this type of use to be considered in the
assessment. This would be the basis upon which USBR could find that the proposed uses are consistent
with the environmental documents and it could therefore allow the release from Ruedi for this purpose.
Potentially these releases could be timed to also benefit energy production from the Ruedi hydroelectric
plant and the City could recover a small portion of its investment in this water supply through increased
energy production. Alternatively, if the City does not request releases for the purpose of “augmenting”
new uses or for enhancement of fisheries, water could be left in Ruedi Reservoir to improve water
recreation values.
3. Question. Is water conservation an alternative to purchasing additional Ruedi water?
Answer. The primary goal of the Ruedi water purchase is augmentation. Augmentation allows a water
user to divert and use water under a junior water right even if a downstream senior right has placed a call.
The augmentation water is used to offset the water lost to the stream from the junior right, so the
downstream senior right gets its full entitlement. The big irrigation and power rights near Grand
Junction (the “Cameo” rights) are very senior, and place calls that require curtailment of upstream junior
water rights, even on the Roaring Fork, Castle, Hunter and Maroon Creeks. However, a junior water
right could continue to take water if an offsetting amount is released from Ruedi, because the Cameo
rights will get their full entitlement.
To the extent water conservation results in less water being diverted from the stream in the first place,
more water is available to other water rights. Those water rights may or may not need more water,
depending on the stream flows. If the other water rights are fulfilled, water not diverted as a result of
conservation measures remains in the stream.
The City has an aggressive water conservation program and has achieved significant results. This
includes a reduction in water consumption (on the basis of the number of gallons used per fixtures
connected) by over two thirds over the last 19 years. Nineteen years ago, potable water usage was at a
maximum. However, in calculating the “water savings” that result from reducing water usage, the
Colorado Division of Water Resources looks only at “consumptive use.” “Consumptive use” is the
amount of water that is “used up” after it is diverted from a stream, and does not return to the stream
system.
A relatively small amount of water delivered for indoor uses is consumed (10-15%); most of it returns to
the stream system from the wastewater treatment plant. Efficiencies in delivery and use of treated water such as repair of leaky pipelines, and installation of water-conserving household fixtures, can reduce the
amount of water that is taken from the streams somewhat. Aspen has significantly increased its
efficiencies in these areas. The result is that it has reduced its diversions from Maroon and Castle Creek
for treated water uses. Most of the water that is diverted returns to the Roaring Fork River at the
wastewater plant.
More water is consumed by irrigation uses, as most irrigation water is taken up by the crops, parks or
other lands that are irrigated. Therefore, most of the water diverted from the streams for irrigation does
not return to the stream system. Colorado water law allows water that is consumed by crops or

 landscaping (“consumptive use water”) to be used for other purposes if irrigation is stopped. For
example, if irrigation ceases on an agricultural parcel of land, the water that was historically used by the
crops could be used for other purposes, including municipal uses or instream flow enhancement by the
Colorado Water Conservation Board. In order to receive consumptive use credits and use them for other
purposes, including augmentation or instream flow protection, it is usually necessary to “dry up” land and
to go through a legal process that recognizes that land is no longer irrigated, and determines how much
“consumptive use” water is available. While Aspen has improved water use efficiency (for instance
through improved irrigation practices on the golf course and elimination of leaky pipes) it has expanded
the area that is irrigated through its parks and open space program and through projects such as the
“parkway” along Highway 82. Aspen therefore has no significant “consumptive use credits” that could
be used for augmentation as a result of its current conservation programs and is unlikely to develop a
significant balance through future water conservation efforts. Therefore, water conservation is not an
alternative means of augmenting water supply in this circumstance.
4. Question. What are the priorities for the City’s use of water and how does this relate to the proposed
Ruedi water acquisition?
Answer. Although the City must provide a legal, reliable treated water supply to its customers, all
alternatives for use of the City’s water rights first consider maintenance of in-stream flow requirements
for protection of aquatic habitat. For example, if the instream flow is not met on Maroon Creek, Aspen
diverts water for its treated water supply from Castle Creek. Only in emergency conditions, such as an
extreme drought which brings water shortages to all of Aspen’s water supply sources, does the City
consider provision of potable water supply as a priority over instream flow maintenance. After
maintenance of in-stream flows, the priority of water uses in order are: 1) potable supplies 2) raw water
uses for irrigation, wetlands, aesthetic purposes (on golf course and open space lands) and snowmaking.
(“Raw water” includes the Thomas Raw Water system and the system of ditches located throughout the
City); 3) reclaimed water; and last, 4) hydroelectric power generation. Note that snowmaking on Aspen
Mountain is from the potable supply while snowmaking on Highlands is from raw water.
An emerging water use is the need to provide for the augmentation requirements for stormwater treatment
ponds. To protect water quality in Aspen’s streams, the City captures stormwater in treatment ponds,
which detain the stormwater to allow sediment to settle out before the water is released to the stream.
Water evaporates from these ponds. At times, augmentation supplies must be provided to offset
evaporative losses of water that would otherwise have returned directly to the streams, to be diverted by
senior water rights. Existing policy advice from Council currently doesn’t cover stormwater treatment
uses since stormwater treatment was only recently recognized as a byproduct of the need to treat high
concentrations of sediment laden water before discharge to the streams to improve aquatic habitat and
aesthetic values.

5. Question. Can staff provide a more thorough basis of estimated needs for Ruedi water? Can this
estimate include water potentially needed for short term needs as well as for long term water development
needs? Council understands that the longer term projects may only become necessary in the event of the
climate change scenario described during the City Council meeting.

 Answer. There are two parts (short and long term water needs) to this question, which taken together,
support the recommended action of acquiring 400 acre feet of water from Ruedi.
a) Short Term augmentation needs. Immediate short term water needs from Ruedi are estimated at
40 acre feet. A 2012 memo from Grand River Consulting indicates that during the short term (the
period covered by the Asset Management Plan), municipal water use could increase by 20%. The
memo from Grand River Consulting estimates the following potential augmentation needs based
on this increased usage: ponds and recreational facilities are estimated to need 0- 25 acre feet; the
reclaimed water system is estimated at 30 acre feet for minimal irrigation and up to 200 acre feet
for maximum irrigation. Because the maximum irrigation scenario would be primarily associated
with long term water needs, staff assigned the low end of the estimate to short term projects. Thus
the estimated short term needs range from 30-55 acre feet annually. Staff’s recommendation is to
use a value near the midpoint of that range, or 40 acre feet annually. Note that the estimated
evaporation from ponds includes the following: Aspen golf course ponds, Marolt wetlands,
Maroon Creek wetlands, Jenny Adair ponds (stormwater treatment), Rio Grande ponds (also
stormwater treatment), Glory Hole Pond, Snyder ponds, and Burlingame ponds.
b) Long term needs. The 2012 memo from Grand River Consulting estimates longer term needs for
the following: groundwater wells at 50 acre feet per year; and reclaimed water system (long term
component) 0-170 acre feet per year. Although not estimated in Grand River Consulting’s 2012
memo, staff estimated a Salvation Ditch pumpback alternative would require augmentation of
approximately 180 acre feet annually. This was based on a 90 day period of use at an average 4
cfs diversion rate (the potable supply component for this alternative) and a consumptive use
factor of 25% (i.e. while 4 cfs is diverted, 3 cfs of this diversion finds its way back to the stream
system through wastewater discharge or groundwater flow). The total expected needs for water
supply augmentation for long term projects therefore range from 230-400 acre feet annually. Staff
utilized a value of 360 acre feet per year, near the upper end of this range. Staff believes that the
Salvation Ditch alternative is the most probable means to improve water supply in the event that
climate change shifts peak runoff to occur earlier in the year, but other alternatives cannot be
ruled out until detailed feasibility studies are completed and required agreements are executed.
Staff chose the higher end of the range because of the uncertainty that the City may need to utilize
another option that could require a higher level of water augmentation.
6. Question. Can City practices regarding use of ponds and resulting evaporation be modified to
reduce the amount of water needed?
Answer. Note the listing of ponds and water features in 5a) above. All the above were constructed as
“flow through ponds” which means that water flows into the ponds and back out again on its way to
the river. The ponds were constructed in this manner to optimize aesthetic values. If these and future
ponds were modified to allow water to be stored in those ponds only when the rights are in priority,
that part of the estimated water need from Ruedi could be reduced accordingly because water would
simply not flow through the ponds when the water rights were out of priority. There would be no out
of priority evaporation to be augmented. Rather, the level of water in the ponds would drop at times
when the storage rights were out of priority, because no new water would flow into the ponds. This
would reduce short term water needs by up to 25 acre feet annually, but would not affect the longer

 term water needs addressed in answer 5b) above. Reconstructing the ponds to allow the “flow
through” to be stopped (rather than augmenting the evaporation) when the storage rights are out of
priority would result in aesthetic changes that may not be acceptable to golf and park users since it’s
possible that the ponds would sit nearly empty for a significant portion of the summer use season.
(The water “calls” that would prevent storage in the ponds typically occur in dry years during July
and August). Also note that for effective treatment of stormwater, the ponds at Jenny Adair and Rio
Grande parks need to be maintained at a normal operating level. Reducing the water level in those
ponds compromises treatment efficiency and may be inconsistent with the City’s adopted policy on
stormwater treatment outlined on page 49 of the Aspen Area Community Plan (AACP).
7. Question. What alternatives to purchasing water from Ruedi are available?
Answer. Both the River District and the Basalt Water Conservancy District have similar sources of
water for augmentation purposes. Both programs are offered on a lease basis, which requires a
perpetual payment. For example the River District’s program requires an annual lease payment of
$159/acre foot with an annual COLA adjustment. If one of the alternative lease options were chosen,
the City’s payment would continue beyond the date when the USBR would have fully amortized the
capital investment. The USBR purchase is a significantly lower cost over the long term, equivalent to
7-8 years of lease payments under the alternative programs.
8. Question. How would the fund balance for the Water Utility be affected by the proposed water
purchase?
Answer. Refer to Attachment 1, which shows a graph of the fund balance for three alternatives long
range plan scenarios: 1) status quo (no water purchase); 2) up-front payment of full capital cost; 3)
eight year amortization of capital costs at approximately 3% interest. For reference we have shown
the fund reserve requirement. All alternatives are expected to maintain the required reserve balance
without affecting adopted water rates.
Part 2. Update to Contractual Approvals Needed to Implement Water Purchase
The November 14, 2012 Council memo anticipated a two part process for approval of a water
purchase: 1) a resolution indicating the City’s intent to purchase; and 2) approval of the financial
agreement. If Council wishes to approve a purchase of 400 acre feet of Ruedi water from USBR, the
attached financial agreement would need to be approved through adoption of the amended resolution
(also attached) by the end of the year. In 2012, a payment of $30,748 would be due. This includes a
cost share for preparation of the environmental documents.
Attachments:
Exhibit A: Graph of Expected Fund Balance for 3 Alternatives
Exhibit B: Financial Agreement
Exhibit C: West Slope Cost Share Agreement
Exhibit D: Resolution xx, Series of 2012