[bouldercouncilhotline] Hotline: August 18, 2015, Item 3C Questions

[cmosupport at bouldercolorado.gov]

Sender: Leatherwood, Heidi

-----Original Message-----
From: Taddeucci, Joe 
Sent: Tuesday, August 18, 2015 11:50 AM
To: Leatherwood, Heidi
Cc: Grossman, Nick
Subject: RE: [bouldercouncilhotline] Hotline: August 18, 2015, Item 3C Questions

Dear Mary,

Regarding the first question, the lease pricing is more comparable to a plant investment fee (PIF) than a utility rate.  The real commitment the city is making to CU is designating the 0.6 acre feet of storage space in Silver Lake Reservoir, which can reasonably be valued at $1,000 per acre foot (the asset value).  In establishing the pricing, staff also considered neighboring municipalities' rates for similar augmentation leases, which generally range up to $400 to $500 per acre foot.  Given the asset-based pricing structure, with inflation and rate comparisons with other municipalities, staff believes that the city will receive adequate compensation from CU for the duration of the 20-year lease in a way that is fair to other utility customers.  

For the second question, $600 per year is the correct figure based on 0.6 acre feet of storage space at a value of $1,000 per acre foot.  The memo attachment inadvertently contained a prior version of the lease document.  Other than punctuation, the lease rate was the only difference from the correct lease document, which is attached. If City Council chooses to authorize the lease, the correct lease document will be used for signing. 

Thank you for the questions, and please let me know if there is any additional information I can provide.

Sincerely,

Joe Taddeucci
Water Resources Manager

-----Original Message-----
From: cmosupport at bouldercolorado.gov [mailto:cmosupport at bouldercolorado.gov] 
Sent: Monday, August 17, 2015 3:12 PM
To: bouldercouncilhotline at list.ci.boulder.co.us
Subject: [bouldercouncilhotline] Hotline: August 18, 2015, Item 3C Questions

Sender: Young, Mary


1. The memo states that the lease amount of $600/year be adjusted for inflation on an annual basis for the 20 year duration. Was an adjustment considered for increases in water  rates?

2. The body of the memo quotes a $600/year lease rate, the lease quotes $1,000/year. Which is correct?

Thank you!

Mary Dolores Young
Boulder City Council Member
303-501-2439

"All ethics . . . rest upon a single premise: that the individual is a member of a community of interdependent parts . . ." - Aldo Leopold
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