SUBJECT:
Title
Water Allocation Policy and Implementation Items
1) An Ordinance of the Town Council of the Town of Erie Amending Chapter 1 of Title 8 of the Erie Municipal Code to Amend the Water Dedication and Fee in Lieu of Water Dedication Requirements;
2) A Resolution of the Town Council of the Town of Erie Approving and Adopting the Town of Erie Water Allocation Policy;
3) A Resolution of the of the Town Council of Erie Adopting the Town's Fee Schedule; and
4) An Ordinance of the Town Council of the Town of Erie Amending Section 9-1-2 of Chapter 1 of Title 9 of the Erie Municipal Code to Revise the Local Amendments Related to Permitting in the International Residential Code
Department
DEPARTMENT: Planning & Development
Utilities
Economic Development
Finance
Communications & Community Engagement
Public Works
Parks & Recreation
Presenter
PRESENTER(S): Sarah Nurmela, AICP, Planning & Development Director
Todd Fessenden, Utilities Director
end
Time
TIME ESTIMATE: 75 minutes
end
For time estimate: please put 0 for Consent items.
Fiscal
FISCAL SUMMARY:
The fiscal impact is described in the attached documents.
Policy
POLICY ISSUES:
The purpose of this policy is to ensure that community goals and needs are matched with the Town’s water resources available for allocation. Outcomes are aligned to:
• Allocate the Town’s remaining water rights for purposes aligned with the Town’s strategic priorities and Comprehensive Plan vision; and
• Establish a clear framework for staff to implement and periodically update this policy.
Recommendation
STAFF RECOMMENDATION:
1) Adopt An Ordinance of the Town Council of the Town of Erie Amending Chapter 1 of Title 8 of the Erie Municipal Code Regarding Water Dedication and Fee in lieu of Dedication;
2) Approve a Resolution of the Town Council of the Town of Erie Approving the Town of Erie Water Allocation Policy;
3) Approve A Resolution of Town Council Adopting the Town's Fee Schedule; and
4) Adopt An Ordinance of Town Council of the Town of Erie Amending Section 9-1-2 of Chapter 1 of Title 9 of the Erie Municipal Code to Revise the Local Amendments Relating to Permitting in the International Residential Code
Body
SUMMARY/KEY POINTS
• The Town is limiting its water allocations to a fixed amount for the next six years to accommodate delays in several water projects.
• Water allocation amounts by land use are planned to prioritize public benefit and economic opportunity in the Town and will include limited allocations for residential development.
• Staff proposes multiple code updates in Titles 8 and 9 of the Municipal Code to implement the policy.
• The Water Dedication Fee is being updated to reflect the current cost the Town is spending on new water resources.
BACKGROUND OF SUBJECT MATTER:
In response to unexpected delays in the Town’s water acquisition strategy, the Town is modifying its approach to water allocation for new development. The delays in delivery of water resources from Chimney Hollow (Windy Gap Firming Project) and the Northern Integrated Supply Project (NISP) will result in a constrained water supply over the next six years. Given planned public facilities, parks, as well as entitled and planned residential and commercial development, staff anticipate requests for existing Town water dedication will exceed available supply. The Water Allocation Policy (Attachment 1) outlines the Town’s approach to the allocation of the remaining Town water supply to ensure continued growth and economic development. Implementation of the policy is accompanied by updates to Titles 8 and 9 in the Municipal Code and an update to the Town’s Water Dedication Fee. This policy will be reevaluated once the Town begins receiving anticipated water from Chimney Hollow which is currently anticipated to be in 2031.
Water Supply & Development Activity
Erie’s water supply is used by Town facilities, parks, and services as well as residences, schools, construction activity, and businesses. Current supply serves approximately 14,100 housing units and 1.7M square feet of non-residential development, not including public facilities. Attachment 2 provides an overview of the Town’s water supply and sources. As of April 2026, approximately 749 acre-feet (AF) of water are not allocated and are available to new capital projects and development over the next six years. During this period, the Town anticipates multiple public projects that will require Town water supply. New development is also underway, with multiple neighborhood-scale residential developments and commercial projects in various stages of planning and entitlement.
Projects are allocated water when a building permit is issued and fees are paid. A project must be fully entitled (zoned and platted) to be eligible to apply for a building permit. Attachment 3 provides an overview of current development activity, including projects in all stages of planning and entitlement.
Water Allocation Policy
The Water Allocation Policy outlines an annual process for the strategic allotment of the remaining Town water resources. The policy is structured to maximize the public benefit of the Town’s remaining water supply with public serving uses, commercial, and residential development. Additionally, developers are encouraged to bring external water resources to serve new projects.
Each year, the Town will allocate a specific amount of acre feet of water for allocation. The available supply will be confirmed by Council at the beginning of each year and will be adjusted based on new water acquisitions, infrastructure capacity, development pipeline, and market demand. Unassigned allocations will be carried forward to subsequent years. Projects that provide their own water resources will not count against the Town’s annual allocation.
The annual bank of allocations will be distributed into five categories. The total allocation, categories, and proposed allocations for the remainder of 2026 are described below. These percentages will likely change each year, in relation to the needs of the capital improvement plan and development pipeline.
• Total Allocation Remaining for 2026: 125 AF
• Contingency Use: 10%
• Public Projects: 10%
• Economic Development: 15%
• Residential: 65%
• Affordable Housing: 0%
The water allocation in each category will be available on a first come, first serve basis, and assigned at payment of water dedication fee in lieu. This payment can be made at application of building permit or issuance of building permit. Residential allocations may be further limited each month to ensure building activity is supported throughout the course of the year. Building permit applications can only be made once projects are entitled and platted, and initial infrastructure is approved by Public Works.
Developments that do not receive a Town allocation may proceed by bringing their own water resources to the Town to serve their project, subject to Town approval as specified in the existing Town code. Finally, issued allocations that expire due to inactivity either at application or after issuance of a building permit will be returned to the Town’s allocation bank for the year.
Code Updates to Support the Water Allocation Policy
Updates to Titles 8 and 9 provide clarification of language and timelines associated with water allocation in the Town.
• The change to Title 8, Chapter 1 removes the preference for fee-in-lieu payments to the Town for water dedication and allows developers to bring water, subject to the Town’s review and acceptance.
• Changes to Title 9, International Residential Code in Chapter 1 ensure that building permit applications and issuances are not pursued speculatively while allocations are limited. The length of active application and permits is reduced from 180 days to 90 days.
• Additionally, the definition of actively pursuing construction is expanded to ensure vertical development is underway. Extensions of both application and permit will still be possible.
Fee Update for Water Dedication
The Town continues to purchase water, most recently acquiring 123 shares of Colorado-Big Thompson (CBT) water this past year. The cost of water acquisition continues to rise. The Town will increase the Water Dedication Fee to ensure the Town collects a fee in lieu that is commensurate with current water costs.
• Current Water Dedication Fee is $31,400 per Single Family Equivalent (SFE) ($69,800 per AF).
• New Water Dedication Fee is proposed to be $52,200 per SFE ($116,000 per AF)
The updated fee for Erie is compared to other surrounding municipalities and water providers in Attachment 11.
Next Steps
The emergency ordinance enacting the code updates will immediately implement the Water Allocation Policy upon adoption. The intent of distribution of the Town’s remaining water allocations is to ensure economic activity and complementary residential development continues to occur, maximizing fiscal health and opportunity. The immediate enaction of the updates will ensure the limited supply of the Town’s water allocations are utilized for new construction and not held for extended periods of time by inactive projects. Additionally, the updates will further support developers’ ability to bring their own water for projects.
If the Water Allocation Policy and associated updates are approved, Town staff will provide information and FAQs on the Town website. Staff will also hold one or more informational meetings with developers to address any questions on the updates or process for allocations.
priorities
.
attachments
ATTACHMENT(S):
1. Water Allocation Policy
2. Water Resources Overview
3. Development Overview
4. Presentation
5. Resolution Adopting Water Allocation Policy
6. Ordinance updating Title 8
7. Ordinance updating Title 9
8. Published Notice
9. Resolution Updating Fee Schedule
10. 2026 Fee Schedule Revised
11. 2026 Fee Schedule Redlined
12. Water Dedication Fee Comparison