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ORDINANCE: O-2004-18
SUBJECT: Trade of Ward Lake Storage Right and Merritt Ditch Company Water Rights shares for Agricultural Ditch and Reservoir Company Water Rights
RECOMMENDATION: Approval
FUNDING SOURCE: Not Applicable
SUMMARY AND BACKGROUND OF SUBJECT MATTER: City Council received a memo (attached) concerning sale of a water storage right in Ward Reservoir No. 1 that can no longer be used by the City. The water right was originally used to irrigate Lakewood Estates Park, but that park was converted to a Denver Water tap several years ago. Due to restrictions associated with this storage right, the right cannot be moved from Ward Reservoir No. 1 and thus, it cannot be used by the city.
The City advertised sale of this water storage right to the property owners around Ward Reservoir No. 1 who can legally use the water storage right. One bid was received which consisted of an offer to trade water rights. The City's water attorney and water engineer as well as Public Works have reviewed the bid and find that it is equitable to the City.
The trade is as follows:
The City provides 5 shares of Merritt Ditch shares and the City's 3.6 percent interest in the Ward Lake Association.
The bidder provides 2 inches (two fortieths of one share) of the Agricultural Ditch and Reservoir Company.
This trade is desirable for the City since both the Merritt Ditch shares and the Ward Lake Association interest cannot be used by the City due to restrictions on place of use. Conversely, the Agricultural Ditch inches can be used by the City at several locations along the Agricultural Ditch.
DATE OF FIRST READING: June 28, 2004
DATE OF SECOND READING: July 12, 2004
ORIGINATED BY: Public Works
STAFF PERSON RESPONSIBLE: Dick Plastino, Director of Public Works, 303-987-7901
DOCUMENTS ATTACHED: Ordinance O-2004-18
February 27, 2004 Memorandum
SUBMITTED BY: Dick Plastino, Director of Public Works
REVIEWED BY:
Joni Inman, Director Mayor and City Manager's Office
Michael J. Rock, City Manager
Public Works Department
City of Lakewood
MEMORANDUM
TO: Mayor and City Council
FROM: Richard J. Plastino, Director
DATE: February 27, 2004
SUBJECT: Sale of Ward Lake Storage Right that is no Longer Needed
I am recommending the disposal of a very small asset currently owned by the City of Lakewood.
In the early 1980's, the developer of Lakewood Estates, near Jewell and Sheridan, gave the City a water storage right of about 1.8 acre-feet in Ward Reservoir No. 1 which is located at the southeast corner of Green Gables Country Club.
By way of comparison, 1.8 acre-feet is about the amount of water used by three single-family houses in a year.
Ward Reservoir is a private lake used by residents of several nearby homes. It is owned and managed by the Ward Lake Association and is used for boating, fishing and irrigation of properties around the lake.
For several years, the city irrigated Lakewood Estates Park with water from the lake. In 1998, the irrigation water source was converted to a Denver Water tap (donated by a subsequent land developer) due to high maintenance costs and the difficultly of accessing the underwater pump in Ward Reservoir. The pump served only Lakewood and has since been removed.
The City is required to pay an annual assessment on this water storage right of about $500. After analyzing this water storage right with the Ward Lake Association manager and the city's water attorney and water engineer, it has been determined that it cannot be moved from Ward Reservoir and thus cannot physically be used by the City. It should, however, have some value to other members of the Ward Lake Association composed of residents who live around the lake and Green Gables Country Club.
I recommend the following steps be taken in conformance with the City Charter and Municipal Code:
· Advertise in the Lakewood Sentinel and take sealed bids on the sale of the storage space. The minimum bid price will be set at $4000 per acre-foot or $7200 for the 1.8 acre-feet. This is a reasonable current market value for a small amount of storage with restrictions on location of use. The members of the Ward Lake Association would also be sent a notice of sale.
· If an adequate bid is received, this sale will need to be processed as an ordinance due to language in the City Charter stating that the sale of any water rights used by the City must be by ordinance.
It seems financially prudent to sell this water right since the City can't use it. This will allow the City to gain some income from an unusable asset while at the same time eliminating an annual assessment.
Prior to proceeding ahead with the above steps to sell this storage right, I would like to respond to any requests for additional information, concerns and/or questions to ensure Council is agreeable with this plan. If you can contact me by Monday, March 22, that will help in knowing if Council is okay with Public Works moving ahead with advertising this water right.
c: City Manager
John Mitchell III, Manager, Ward Lake Association
Roger Noonan
Ray Petros
Greg Roush
Ward Lake Association 286 WA
bcc: Ross Williams
Vince Casteel
Barb Ruley
Kathy Hodgson
154 file
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