The primary guidelines used by the staff in determining future water supply needs are the City's approved land use plan and the 1 in 50 year drought criteria adopted in the Water Supply and Demand Management Policy. Using this information, the staff is able to develop water use projections based on both historical information and expected future trends in water use.

The City's updated Water Supply and Demand Management Policy, Resolution 2003-104, adopted by City Council (7-0 vote) on September 16, 2003, outlines the need for an additional 12,500 to 14,000 acre-feet of water storage. The policy goes on to mention the storage options of gravel pit storage and the expansion of Halligan Reservoir. It is anticipated that about 12,000 acre-feet of storage will be needed in Halligan Reservoir.

On November 4, 2003, the Council adopted, by a 7-0 vote, Resolution 2003-121 which authorized the City Manager to proceed with various activities associated with pursuing the expansion of Halligan Reservoir. A number of these activities involve developing cooperative agreements with other water supply agencies for the purpose of promoting regional cooperation and the benefits associated with such.

Back in the 1960s, various water and sanitation districts were formed adjacent to the City as a result of the City deciding not to extend utility service outside its boundaries. This decision would later come back to haunt the City when, during the 1970s, the City experienced a considerable amount of growth which resulted in a clash between the city limits and the districts' service boundaries. This resulted in conflict and legal action between the City and districts. Eventually, in the early 1980s, the conflict was resolved when the City and the districts developed cooperative service agreements designed to provide reliable and efficient water service to all city residents. During the past 20 years, staff members from the City and districts have developed a close working relationship in an effort to provide city residents with the best possible service. A considerable amount of effort has been expended in avoiding the expensive duplication of facilities by working together on common projects. During the past five years, cooperation between the City and districts has saved city residents in excess of $7.5 million. Regional cooperation is included as a major policy element in the Water Supply and Demand Management Policy.

Viable and meaningful relationships (partnerships) are based on mutual trust and respect, and fairness and equity. Without these attributes, partnerships are difficult, if not impossible to maintain.

As mentioned above, regional cooperation is a very important aspect of developing and providing effective and efficient water utility service to all city residents. It is important to note that the districts' service territory includes over 50% of the city's present Growth Management Area (GMA). As such, it is in the City's best interest to continue to cooperate with the districts to ensure all city residents receive reliable and efficient water service.

The Halligan project is no different than previously completed cooperative projects. In the case of Halligan, both the City and the districts need additional water storage to meet the future needs of city residents. Obviously, the districts also serve customers outside the GMA. However, the development outside the GMA is mostly low density and therefore not the major driving factor for additional water storage. It is generally the high density development within the GMA that has the most significant impact on the need for additional water supply and storage.

As with previous cooperative projects, there is also considerable cost savings associated with having partners in the Halligan project. With partners (constructing a 40,000 acre-foot reservoir), the City's estimated cost for 12,000 acre-feet of additional storage is about $14 million. Without partners, (constructing a 18,400 acre-foot reservoir) the City's estimated cost for 12,000 acre-feet of additional storage is about $25 million. Having partners could reduce the City's cost by more than $11 million.

To enlarge the reservoir we need to acquire a permit from the U.S. Corps of Engineers and comply with and complete a rigorous permitting process required by the National Environmental Policy Act (NEPA). NEPA procedures insure that environmental information is available to the public and federal officials before decisions to permit the project are made. The information must be of high quality. Accurate scientific analysis, expert agency comments, and public scrutiny are essential. The following is an outline of that process. The majority of the work is performed by an independent consultant selected by the Corps of Engineers.

• Letter of Intent
  The federal agencies are officially notified that we are proposing the construction of the Halligan-Seaman Water Management Project to meet a purpose and need. The project proponents and participants are identified. We meet with the lead federal agency, the Corps of Engineers (USCOE), to formulate a request for proposals for an independent third party consultant to prepare an Environmental Impact Statement (EIS). The USCOE and participants review the proposals. The participants interview firms and short list the top three or so firms. The USCOE selects a firm, formalizes the scope of work and publishes news of the scoping activities.
• Scoping
  The USCOE works with the participants to develop a final Purpose and Need Statement and conducts public scoping meetings to identify issues. Cooperating agencies are invited to participate in the NEPA process. These will likely include the U.S. Fish and Wildlife Service, U.S. Forest Service, EPA, State of Colorado, and Larimer and Weld Counties. A final scope of work and contract cost are prepared for the EIS.
• Alternative Development and Screening
  A comprehensive list of alternatives to meet the project purpose and need, including a no action alternative, are prepared. This large list of alternatives are rigorously evaluated and screened through scientific environmental, engineering and economic studies. These studies are used to evaluate the effected environment, environmental consequences, and mitigation measures associated with the alternatives. Reasons for eliminating alternatives are discussed. A preferred alternative or alternatives, including proposed mitigations measures, are described.
• Draft EIS
  A draft EIS is prepared including mitigation and monitoring plan and a biological assessment. Public notice is made and the draft EIS is distributed to any person, organization, or agency upon request. Public hearings are held to describe the preferred alternative and EIS. Comments are received and the USCOE responds to the comments.
• Final EIS
  A Biological Opinion is prepared and the final EIS defining Least Environmentally Damaging Practicable Alternative (LEDPA) is distributed to any person, organization, or agency upon request. Comments are received and the USCOE responds to the comments.
• Record of Decision
  The USCOE issues a Record of Decision which clearly identifies their decision. A discussion of all factors used in reaching the decision including any considerations of national policy used in making the decision.

The process of working through the NEPA process to obtain a permit is expected to take 2-3 years and cost about $3.9 million. While we do not know what the outcome of the process will be, we expect that the Corps will issue a permit to enlarge the reservoir to a specific size consistent with the LEDPA.

City Council has provided the staff with fairly strong and specific policy direction regarding the need for additional water storage and to pursue the enlargement of Halligan reservoir as a regional project with partners. Unless the Council changes this direction in the near future, staff will continue to pursue the enlargement of Halligan Reservoir in accordance with existing policy direction.

Enlarging Halligan Reservoir is a costly and complicated process. As such, it is extremely important to have consistent policy direction throughout the project. It is critical to note that changing policy direction in the future could have significant impact on the cost and timing of the project.