Aspen eyes ways to finance Woody Creek land purchase | AspenTimes.com

Aspen eyes ways to finance Woody Creek land purchase

Staff report

Aspen City Council will mull at a work session tonight the possibility of asking voters to approve a $3 million bond question to fund the acquisition of land in Woody Creek that would be used for water storage.

Other financing options will be considered, as well, including the route of paying cash, which the city finance director recommends. However, that would put the city in noncompliance of its financial policies that relate to target reserves, according to Don Taylor, the city's finance director, in a memo to City Council in advance of today's meeting, which starts at 4 p.m. and will be held in the Council Chambers of City Hall.

The city has a pending, $2.65 million deal to buy 63 acres on Raceway Drive. The city announced in July its intention to buy the land as part of its efforts to transfer its two conditional water rights in upper Castle and Maroon creeks. Those rights account for 13,629 acre-feet of water.

At the time of the announcement, Aspen Journalism reported that the city also wants to transfer the rights to Woody Creek gravel pit operated by Elam Construction Inc., the city's golf course, portions of the Maroon Creek Club golf course owned by the city, and Cozy Point Ranch.

City Manager Steve Barwick said at the time that the city would continue to hold onto its rights tied to building potential dams and reservoirs on Castle and Maroon creeks, while seeking to transfer them with the water court's approval.

"We're going to attempt to transfer the water rights down to these sites," Barwick said at the time. "There would not be an abandoning of water rights. It would be moving the water rights from one site to another."

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When the City Council adopted its 2017 budget last year, however, the Woody Creek land purchase was not under consideration.

"The land acquisition was not contemplated in the adopted budget and so no financing plan had been developed," Taylor's memo says. "Staff has been talking about financing alternatives for some other projects that were to be a part of a future budget proposal. These projects include waterline portion of the mall renovation project and a major water-line project."

Taylor's memo notes that a "major water rate increase" of 15 to 20 percent will be proposed in 2018 to help finance the land acquisition and other projects.

Additionally, the city will entertain the following options:

• Ask voters to approve a $3 million bond question to pay for the Woody Creek land purchase. Or, the city could ask voters to approve an $8 million bond that would also pay for the mall renovation project's waterline and another major water line project.

• Issue certificates of participation, or COPs.

• Pay cash for the property.