Water Resources Review Committee (10/05/2005)

Final
STAFF SUMMARY OF MEETING

WATER RESOURCES REVIEW COMMITTEE

Date:	10/05/2005	ATTENDANCE

Time:	09:36 AM to 04:35 PM	Butcher	E
		Entz	X
Place:	SCR 356	Fitz-Gerald	E
		Grossman	E
This Meeting was called to order by		Hodge	X
	Senator Isgar	Hoppe	X
		Taylor	X
This Report was prepared by		White	X
	David Beaujon	Curry	X
		Isgar	X
		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
Fifth Meeting		-

09:36 AM - Call to Order

The meeting was called to order by the Chairman, Senator Jim Isgar.

09:37 AM State Financing for Water Projects

Rod Kuharich, Director of the Colorado Water Conservation Board (CWCB), identified the membership of the CWCB and the programs administered by it including water supply and flood protection, water supply planning and finance, stream and lake protection (in-stream flows), and water conservation and drought planning (Attachment A). He explained that the CWCB issues loans for water projects including reservoirs, dam rehabilitation, water supply systems, and water rights acquisition. The CWCB has issued $140 million for water project loans throughout the state. Mr. Kuharich explained that the CWCB issues loans for up to 30-year to help pay for as much as 90 percent of a project's cost. Interest rates range from 2.5 percent for agricultural borrowers and 5.25 percent for commercial borrowers. In response to a questions from the Committee, Mr. Kuharich described grants available for feasibility studies and he expressed concern about the CWCB's loan program if the Colorado voters reject Referendum C in the 2005 election. He also identified the amount of revenue that may be available for new CWCB loans in FY 2006-07.

10:10 AM

Dan Law, Executive Director of the Colorado Water Resources and Power Development Authority (CWRPDA), described the history of the authority, its charge, and the membership requirement of the authority's board (Attachment B). He also described the Water Pollution Control Revolving Fund that issues loans to governmental entities for water quality control programs including water treatment plants, pipelines, and water meters. To date, the CWRPDA has issued over $619 million for such loans. Mr. Law described the Drinking Water Revolving Fund that issues loans to governments for water treatment facilities, pipelines, and other drinking water projects. To date, over $200 million has been loaned for such projects. Mr. Law described the Small Water Resources Projects loan program that issue loans to governments for raw water projects and identified other financing mechanisms for water projects including general obligation bonds, CWCB loans, and federal appropriations.

10:35 AM

Mr. Law described the history of the Animas - La Plata Project near the City of Durango in southwest Colorado and provided an update on its construction. He explained that the CWRPDA established a $15 million escrow fund to assist with water resource development in the La Plata River basin for irrigation and to satisfy water delivery obligations under the La Plata River Compact. Committee discussion followed about water supply challenges in the La Plata Basin and potential water supply projects in the basin to address these needs. Mr. Law also commented on the draft bill to require that one member of the Board of CWRPDA include a person with expertise in public health issues related to drinking water or water quality matters (Attachment C).

10:53 AM Water Quality Issues

Doug Benevento, Executive Director of the Colorado Department of Public Health and Environment, described progress on addressing a backlog in the review of water quality permit applications and described efforts to address the U. S. Environmental Protection Agency's objections to certain state water quality standards adopted by the Water Quality Control Commission. He explained that the department is complying with a consent decree concerning total maximum daily load (TMDL) requirements related to a lawsuit with environmental organizations. The department is currently developing storm water regulation for oil and gas facilities that may be similar to the Colorado Oil and Gas Commission's regulations for facilities that cover up to five acres. Mr. Benevento described programs to assist disadvantaged communities comply with water quality requirements, such as low interest loan program for water treatment facilities. He described budget challenges facing the department including reduced general fund support and increased oversight responsibilities for drinking water programs. Legislation may be introduced in 2006 to provide additional revenue for the department.

11:16 AM -- Water Supply Alternatives

Elise Jones, Colorado Environmental Coalition, explained that Colorado's demand for municipal water is projected to grow significantly in the next 25 years due population growth. Similarly, the demand for water for environmental and recreational needs is also expected to increase. She explained that Colorado Trout Unlimited and Western Resource Advocates completed a study called "Facing Our Future" that identifies balanced water supply solutions to address projected growth, while protecting Colorado's environment. The report emphasizes conservation and efficiency to reduce the need for new dams, transbasin diversions, and large scale water transfers. It also identifies water supply solutions that work for both eastern and western communities.

11:22 AM

Melinda Kassen, Colorado Trout Unlimited, identified water supply programs to meet growing urban water demand, while protecting rivers and other water users (Attachment D). Such alternative include increased urban efficiency and greater cooperation between water suppliers. She responded to questions from the committee regarding potential economic incentives to increase agricultural conservation and to encourage farmers to lease their water to municipalities under a land fallowing program. Ms. Kassen explained that the report used water demand estimates from the Statewide Water Supply Investigation. Ms. Jones explained that the report was prepared with assistance from local water users, environmental organization, and water providers. Ms. Kassen also responded to questions about the effect of instream flow rights and recreational in-channel diversions (RICDs) on flexible use of water. She identified potential opportunities for expansions of existing reservoirs and responded to questions about water storage options in western Colorado.

12:02 PM

The meeting recessed.

01:40 PM -- Update on the Southern Delivery System

Gary Bostrom, Colorado Springs Utilities, identified the sources of Colorado Springs' water supply and described efforts to address the city's growing demand for water. As a result of the city's water efficiency policies, he explained that the city reduced its per capita water use below most major cities. However, due to its projected population in 2012, the city will need additional water. To satisfy this demand, the city proposes a pipeline to divert water from the Pueblo Reservoir, called the Southern Delivery System . Phase I of the project includes construction of 43 mile pipeline and a water treatment facility that is estimated to cost $500 million. The city is currently conducting an environmental impact statement (EIS) as required by federal law. The city is also exploring other methods for meeting its growing water demand including leasing water from water rights owners in the lower Arkansas River valley. It is also working with the Colorado River Water Conservation District to address the district's concerns about the impact of Southern Delivery System on west slope water resources. Mr. Bostrom also described efforts to address local concerns about water quality impacts to Fountain Creek related to the city's storm water run-off.

02:02 PM

Andy Colosimo, Colorado Springs Utilities, described assistance provided by Colorado's congressional delegation to obtain the necessary federal approval for its Southern Delivery System. Mr. Bostrom responded to questions regarding the City of Colorado Springs' waste water collection system and water quality issues in Fountain Creek.

02:12 PM South Metro Water Supply Issues

Wayne Williams, El Paso County Commissioner and member of the El Paso County Water Authority (EPCWA), explained that the authority was created by the El Paso County Commission to address the water supply challenges affecting water districts in unincorporated El Paso County. Districts in this area are dependent upon ground water resources, including non-renewable ground water in the Denver Basin Aquifer. Approximately 150,000 people live in the area covered by the authority.

02:16 PM

Gary Barber, consultant for EPCWA, identified ground water resources in the El Paso County including the Denver Basin Aquifer and the Black Squirrel Ground Water Management District. He explained that the authority is working with the U. S. Geological Survey to study these ground water resources.

02:19 PM

Betty Konarski, Vice-President of EPCWA, identified studies of water use in El Paso County and efforts to identify water supply alternatives. She water legislation related to El Paso County reflect regional needs. In response to a question from the committee, Commissioner Williams explained that the EPCWA does not have the authority to levy taxes. For revenue, it depends on contributions from El Paso County and dues paid by its members. He urged that the basin round table process established in HB 05-1177 be completed before legislation is introduced that addresses water supply issues in El Paso County. HB 05-1177 created a process to negotiate interbasin compacts regarding the use of Colorado's water resources.

02:27 PM

Larry Bishop, President of EPCWA, described water resources in El Paso County and the Denver Basin Aquifer and described the contents of the El Paso County Water Report. Completed in 2002, this report projects water demand in El Paso County in 2020 and identifies water supply alternatives to address the new demand (for a copy of this report contact the El Paso County Water Authority). In response to a question from the Committee, Mr. Bishop explained that EPCWA decided not to participate in the proposed Southern Delivery System to pursue other water supply option including reuse of return flows from pumping of non-renewable ground water. Commissioner Williams described El Paso County's preparation for the proposed expansion of Fort Carson and other military facilities in the county.

02:43 PM

Steve Boand, Douglas County Commissioner, described efforts to identify cooperative water supply alternative for communities that use the Denver Basin Aquifer. He responded to questions from the committee about projected growth in Douglas County and efforts by the county to manage it. He also identified water supply alternatives that may be used to address the growing demand for water in the county.

03:01 PM -- Update on Proposed South Metro Water Conservation District

John Hendrick, South Metro Water Authority, explained that HB 05-1298, concerning the South Metro Water Conservation District, was postponed indefinitely in the 2005 legislative. Two other bills were also postponed indefinitely in 2005 that would have established a water conservation district to address water supply challenges in the south metro area. He explained that water providers are exploring other financing mechanisms to fund broader water supply solutions for the south metro area. Mr. Hendrick did not anticipate the need for legislation in 2006 to authorize a water district in the south metro area.

03:13 PM -- Discussion on Proposed Draft Legislation

Tom Morris, Office of Legislative Legal Service, described the provisions of a draft bill concerning the Water Resources and Power Development Authority's membership requirements (Attachment C). He also responded to questions about the draft bill's title.

03:17 PM

Representative Curry described the provisions of the October 5 Draft Bill concerning recreational in-channel diversions (RICD) (Attachment D). She explained that the draft bill amends the requirement concerning the review of RICD application by the Colorado Water Conservation Board (CWCB) and it role in water court adjudication. It also includes requirements on RICD control structures. Mr. Morris responded to questions from the committee regarding the role of the CWCB in the RICD review process and other issues. Committee discussion followed about the proposed role of the CWCB and the design requirements for RICD control structures.

03:39 PM

Representative Curry described provision of the bill that define a "reasonable recreational experience" and limits the administration of RICDs during a water shortage. Committee discussion followed about limiting calls for RICDs during certain times of the day and year and when stream flows fall below 90 of an RICD's decreed flow. Senator Isgar also commented on allowing de minimis impacts to an RICD.

04:07 PM

Representative Curry described the provision of the bill concerning water court adjudication of RICDs. Committee discussion followed about the requirement that an RICD not impair the ability of Colorado to fully develop its compact entitlement. Senator Isgar explained that the draft bill may be amended prior to its final consideration.

04:24 PM

Representative Hoppe announced upcoming Colorado Water Congress seminars on water law and policy issues. Senator Fitz-Gerald described beetle infestations in Colorado's major watersheds, including the area surrounding Lake Granby in Grand County. She explained that trees killed by beetles increase the risk of wildfires and subsequent soil erosion impacts. Areas threatened by the beetle outbreak include water projects relied on by major front range cities.

04:34 PM

The meeting adjourned.