Agenda Memo

City of Boulder City Council Agenda Item Meeting Date: April 16, 2026 Agenda Title Consideration of a motion to authorize the city manager to execute a 20-year amendment to a water storage agreement with the Town of Nederland

Staff Contact  

Kim Hutton, Water Resources Senior Manager, Utilities Department Joe Taddeucci, Director of Utilities

Draft Motion Language Staff requests council consideration of this matter and action in the form of the following motion: Motion to authorize the city manager to execute a 20-year amendment to a water storage agreement with the Town of Nederland.

Executive Summary The purpose of this item is to authorize the city manager to amend a 2008 water storage agreement with the Town of Nederland (Nederland) to renew the agreement for a new 20-year term. The amendment reflects a longstanding water storage relationship that began in 1980 under the previous owners of Barker Reservoir (Public Service Company of Colorado) and continued with Boulder’s acquisition of Barker Reservoir in 2001. The current water storage agreement between Boulder and Nederland expired April 1, 2026. Under the amended agreement, Nederland would continue to have the right to store up to 39.6 acre-feet of water in Barker Reservoir for the purpose of supporting its municipal water supply operations. The volume of water associated with the lease is relatively small and does not pose any risk to the reliability or availability of

the City of Boulder’s water supply. The term of the amended agreement would expire April 1, 2046. Nederland’s Board of Trustees has approved the amended storage agreement.

Council Action Options Option

Outcome

Approve motion language as drafted

If the motion is approved, Boulder will renew its water storage agreement with Nederland for another 20-year period effective April 1, 2026.

Define and adopt a modified motion

Council would need to specify any modifications or amendments to the draft motion language. If council requests substantive amendments to the motion, staff may need to negotiate new terms with Nederland and bring back an amended version to council.

Deny the motion or take no action

If this motion is denied or no action is taken, Nederland would lack assurance that it can store water in Barker Reservoir, a condition necessary for operating its municipal water supply system in compliance with Colorado water law.

Refer back to staff

If council refers this item back to staff for modifications of agreement terms, staff may need to negotiate new terms with Nederland and bring back an amended version to council.

Alignment with City Plans and City Council History Sustainability, Equity and Resilience (SER) Framework and Citywide Strategic Plan Alignment SER Framework Goal Area Safe, Responsibly Governed Citywide Strategic Plan Strategy 2: Advance efforts to enhance regional disaster prevention, preparedness and response that leverage existing partnerships and prioritize city investments. Strategy 12: Implement organizational and financial best practices to continuously improve asset management, customer experience, and project and program performance.

Staff Notes Safe: Providing a 20-year water storage agreement to Nederland leverages Boulder’s historical water supply investments to enhance regional drought and emergency preparedness. Responsibly Governed: Extending the water storage agreement supports strong intergovernmental relationships that improve long-term program performance.

Alignment with Additional City Plans The proposed water storage agreement is consistent with Boulder Valley Comprehensive Plan Policy 3.27, which states water resource planning efforts will be regional in nature.

City Council History The item is not related to a council priority. This item is being brought forward at this time because the previous water storage agreement between Boulder and Nederland expired on April 1, 2026.

Analysis The Town of Nederland is located on the western edge of Barker Reservoir. Nederland provides treated water to approximately 1,500 residents. Its water supply system includes wells that require augmentation to operate in compliance with Colorado water law. Augmentation is an operation supported by Colorado water law where water is diverted at one location and water lost to the stream from that diversion is replaced at another location. Nederland’s augmentation plan, approved by Water Court in 1980, relies on the storage in and release of water from Barker Reservoir. The storage arrangement was originally approved by then-owner of Barker Reservoir, Public Service Company of Colorado. When the City of Boulder acquired Barker Reservoir in 2001, it assumed certain existing obligations, including Nederland’s storage arrangement. Boulder and Nederland subsequently entered into a new water storage agreement in 2008, which expired on April 1, 2026. Nederland is now seeking to amend the 2008 water storage agreement to renew the term for an additional 20 years. Under the proposed terms of the amended agreement, Nederland could store up to 39.6 acre feet of water in Barker Reservoir, which is less than 1% of the reservoir’s total storage capacity. The proposed terms would not compromise Boulder’s ability operate its water rights to meet the needs of its customers.

Equity Analysis An equity analysis was not conducted for this project.

Fiscal Note Estimated Fiscal Impact Narrative There will be no fiscal impact as a result of this agreement. Nederland’s storage and release operations can be incorporated into Boulder’s existing system operations without an impact on staffing resources. Boulder will not charge Nederland for the rights and operations described in the agreement. Current Year Estimated Fiscal Impact Fund(s): Water Enterprise Fund (6100) Department(s): Utilities Program(s): Water Resources

FY 2026 Budget

FY 2026 Estimated Impact

FY 2026 Net Change

Beginning Fund Balance

$38,575,117

$0

$38,575,117

Total Forecasted Revenue

$50,817,316

$0

$50,817,316

Total Estimated Expenses

$55,942,411

$0

$55,942,411

Ending Fund Balance(s) After Reserves

$16,811,036

$0

$16,811,036

FTE

N/A

N/A

$0

Item

Three-Year Estimated Fiscal Impact

Item

FY 2026

FY 2027

FY 2028

Total Forecasted Revenue

$0

$0

$0

Total Estimated Expenses

$0

$0

$0

Net Estimated Impact

$0

$0

$0

Climate, Resilience, and Sustainability Considerations Boulder conducts long-range water supply planning that incorporates hydrologic variability and climate change projections. Based on past water supply development and forward-looking water supply modeling, Boulder has sufficient flexibility to enter into this 20-year water storage agreement while maintaining its resilience to drought and climate change. From a regional perspective, providing water storage to Nederland enhances regional drought and emergency preparedness.

Community Engagement No community engagement was conducted.

Workplan Considerations Implementation of the water storage agreement will be incorporated into Boulder’s existing system operations in alignment with operations work that is on the Utilities Department 2026 workplan.

Next Steps for City Council If the motion is approved, the water storage agreement will go into effect April 1, 2026.

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Attachments Attachment A – 2008 water storage agreement with Town of Nederland Attachment B – Amended water storage agreement