ASPEN CITY COUNCIL WORK SESSION MEMORANDUM TO: Mayor and City Council FROM: Margaret Medellin, Utilities Portfolio Manager THRU: Jim True, City Attorney; Scott Miller, Director of Public Works; Dave Hornbacher, Director, Utilities and Environmental Initiatives; DATE OF MEMO: May 24, 2018 MEETING DATE: May 29, 2018 RE: Resolution #83, Series of 2018, Approval of Stipulations in Maroon and Castle Creek Conditional Water Storage Rights Diligence Cases (16CW3128 and 16CW3129) SUMMARY: On October 10, 2016, Council passed Resolution #141, Series of 2016 directing staff to implement certain water management measures to improve resiliency against future climate change impacts and other system changes while continuing efforts to maintain diligence for two conditional water storage rights on Castle and Maroon Creeks. Resolution #83, Series of 2018 is presented to Council today for adoption of Stipulations with five of the opposers in these two water rights cases, and direction to move forward in accordance with the stipulations (see Attachment K). BACKGROUND: The City Utilities is responsible for assuring Aspen has a safe, legal and reliable water supply, now and into the future. To this end, the City has developed an integrated water supply system. As a part of this integrated water supply system, since 1965 the City of Aspen has held and maintained conditional water rights for reservoirs on Maroon and Castle Creeks. The Aspen community will face significant challenges maintaining its water supply as we experience changing precipitation and runoff patterns, and possible increased fire, drought, change in runoff timing and lower snowpack levels due to climate change. Storage reservoirs, that can retain water from season to season and year to year, can provide water supplies even during times of shortage. Without water storage, the City will have no meaningful back up if surface supplies are greatly reduced. To mitigate this risk, the City has included future reservoir storage in its long-range plans. As directed, staff filed due diligence applications in the water court for these water rights. Subsequently, ten parties filed statements of opposition to the two water court cases. PREVIOUS COUNCIL ACTION: Since Council adopted Resolution #141, Series of 2016, directing staff to file diligence applications on the Maroon Creek and Castle Creek conditional storage rights, Council has continued to provide direction to staff on negotiations with the opposers to both water rights cases. DISCUSSION: As a result of negotiations, staff and some opposers have reached agreement on these water rights cases. Each of attached Stipulations (See Attachments A - I) has been approved by the signing opposing party. The stipulations set forth the agreements between the City and the stipulating opposers. Please note that these stipulations require that all opposers in each case must reach stipulations with the City or none of the stipulations will be valid in that case. The stipulations include the signing opposer’s agreement to entry of a diligence decree in the pending case, and the City’s agreement to file a change application in the water court to relocate Castle Creek Reservoir and the Maroon Creek Reservoir water rights to one or more specified new locations. Moreover, Aspen agrees that it will forego the right to store water pursuant to these water rights at the original decreed locations. The total amount of water that may be stored pursuant to the Maroon Creek storage right will be 4,567 acre-feet, and the amount of water that may be stored annually pursuant to Castle Creek storage right will be reduced to 8,500 acre-feet. The total amount that can be stored in any year under both rights combined will not exceed 8,500 acre-feet. Staff continues to negotiate with the remaining opposers and hopes to reach stipulations with these parties as well. COUNCIL DIRECTION REQUESTED: Staff requests that Council consider the adoption of Resolution #83, Series of 2018. This Resolution will authorize the City’s attorneys to execute the attached stipulations on behalf of the City and proceed in accordance with the provisions of the stipulations. ENVIRONMENTAL IMPACTS: The City is committed to reducing its footprint (carbon and water) and fighting climate change, but even with this effort and action, the City recognizes that it is best practice to plan for a future that looks very different than today. The City’s efforts to develop water storage is necessary to ensure the City’s resiliency. BUDGET IMPACT: Funds to support the work associated with Aspen’s Water Future was included in the 2018 budget. CITY MANAGER COMMENTS: ATTACHMENTS: Attachment A – Stipulation with Wilderness Workshop (Castle Creek case) Attachment B – Stipulation with Wilderness Workshop (Maroon Creek case) Attachment C – Stipulation with Western Resource Advocates (Castle Creek case) Attachment D – Stipulation with Western Resource Advocates (Maroon Creek case) Attachment E – Stipulation with Asp Properties LLC (Castle Creek case) Attachment F – Stipulation with Double R Creek Ltd. (Castle Creek case) Attachment G – Attachments to Maroon Creek Stipulations Attachment H – Attachments to Castle Creek Stipulations Attachment I – Stipulation with Pitkin County (Castle Creek case) Attachment J – Stipulation with Pitkin County (Maroon Creek case) Attachment K – Resolution #83, Series of 2018