Windsor Town Board members unanimously approved a $4.5 million loan from the Colorado Water Conservation Board toward the purchase of the Kyger Gravel Pit at a meeting Dec. 9, allowing the town to move forward in its process to buy the property for use as a 1,100-acre-foot water storage area.
The town was midway through the process of a state-mandated leak test to make sure water couldn’t seep into or out of the reservoir when September’s flooding filled it with an estimated 1,000-acre-feet of water.
Town Manager Kelly Arnold said the state recently restarted the clock on the leak test, which is expected to take 45 days.
Kevin Rein, deputy state engineer with the Colorado Division of Water Resources, said Dec. 11 that the new test focuses on a section of the pit damaged when flood water spilled into it in September.
“That (45-day test) started in the last week or two,” Rein said. “Should that test OK, then the pit will be OK going forward to store water as a lined pit.”
The town previously entered into and agreement to purchase the property from its owner, River Bluffs Ventures. Arnold said the town will now need to negotiate another contract amendment with the owner and have the amendment approved by the town board.
“We’ve closed this one, so now we can deliberate and negotiate another contract amendment, and we’ll bring that back to the board, probably in January, with a new closing date and whatever else needs to be negotiated,” he said.
He added that further negotiations could include the capacity of the reservoir.
“There’s a possibility that the capacity has been reduced because of the dirt that has gone into it,” Arnold said.
The term of the $4,545,000 loan is 20 years, at an interest rate of 2.75 percent. The town anticipates making annual payments of $295,000, which will be financed with revenues from the town’s Water Enterprise Utility fund, according to town finance director Dean Moyer. Revenues in the water fund include water fees and tap fees.
Beyond the loan, the town plans to finance the remainder of the estimated $6.3 million project cost from a few different sources.
Moyer said the town has budgeted an additional $750,000 from the water fund, which came from money the Greenspire Subdivision paid the town for half of the cost of the lake pump house, which allowed the subdivision to buy irrigation water from the town.
Instead of buying $200,000 worth of water to store in Windsor Lake, Moyer said the town instead plans to put the money toward the cost of the project.
The town also budgeted $625,000 toward the project from both the Park Improvement Fund and the Capital Improvement Fund.
Moyer said the town has set aside additional money than is needed to cover the cost to allow for price fluctuations. He said in the event costs come back lower than expected, the town would likely reduce the amount taken from the loan.
Moyer said the town originally planned to spend some of the project money in 2013 before being delayed by complications caused by the flooding, and that the payments have been pushed back into 2014.
“It’s a reservoir to hold untreated water, but really it’s a big deal,” Moyer said. “Water is really precious here in Colorado … It really is an important project for us and will help us manage our water for years to come.”