To: Honorable Mayor and Members of Town Council
Through: David L. Corliss, Town Manager
From: Mark Marlowe, P.E., Director of Castle Rock Water
Nichol Bussey, Business Solutions Manager
Paul Rementer, Enterprise Fund Analyst
Title
Ordinance Amending Chapters 3.16, 4.04, 13.12, 13.15, and 13.30 of the Castle Rock Municipal Code By Changing Stormwater Development Impact Fees, Renewable Water Resource Fees, Water and Wastewater System development Fees, and Water, Water Resources, and Stormwater Rates and Surcharges (Second Reading - Approved on First Reading on October 17, 2023, by a vote 7-0)
Body
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Executive Summary
Castle Rock Water (CRW) seeks Town Council approval of an Ordinance (Attachment A) approving the 2024 Rates and Fees.
A primary goal of the annual rates and fees study is to evaluate the long-term financial plan for Castle Rock Water (CRW) to ensure that future rates and fees will cover future costs of service. Below is snapshot of the recommendations for 2024. Please see the attached Staff Report for the full details.
Water Fund:
• Added $4.8 million for Tank 6B reconstruction
• Added $4.0 million for Hill Side Pump Station
• Added $3.8 million for Plum Creek Water Treatment Plant to Tank 12 Transmission
• Added $2.0 million for Young American Rehab
Water Resources Fund:
• Added $14.9 million for Chatfield West Alternative Project
• Added $7.5 million for Cherry Creek Basin Infrastructure
• Added $5.5 million for Advanced Oxidation Facility
• Added $1.3 million for Alluvial Well Redrill
Stormwater Fund:
• Added $1.5 million for Storm Sewer Rehab
• Added $0.7 million for Sellers Gulch Stream Stabilization
• Added $0.2 million for Watershed Master Plan
Wastewater Fund:
• Added $4.8 million for Young American Rehab
• Added $0.7 million for Wastewater Facility VFD Replacement
The primary factors affecting revenue and expenditure forecasts in the rate models are as follows:
1) Included in the staffing plan for 2024 are two new full-time equivalents (FTEs) which include a Landscape Designer and a SCADA Superintendent. There are five total FTEs added through 2028. Additional anticipated grade changes for six positions are also a part of the staffing plan through 2028.
2) Changed timing of many capital projects consistent with water supply and demand model as well as availability of capital reserves.
3) Updated capital plan costs consistent with current capital project cost estimates and changes to the Engineering News Record Construction Cost Index.
4) Added new long term capital projects to meet needs of growth, provide for improvements to the system where necessary to meet upcoming regulatory changes, and make sure rehabilitation and replacement of existing infrastructure was covered.
5) Incorporated debt issuances of up to $40 million to cover shortages of capital reserves into the models for the Water Resources Fund in 2026.
6) Budgeted approximately $28 million in interfund loans from Wastewater to Water from 2024 to 2028 to support capital projects in Water.
7) Reduced the Catastrophic Failure Reserve for Water and Stormwater from 2% of total assets to 1% of total assets for the next five-year period.
Staff Recommendation
Staff recommends Town Council approval of the Ordinance approving 2024 Rates and Fees.
Proposed Motion
“I move to approve the Ordinance as introduced by title.”
Alternative Motions
“I move to approve the resolution as introduced by title, with the following conditions: (list conditions).
“I move to continue this item to the Town Council meeting on _____ date to allow additional time to (list information needed).”
Attachments
Attachment A: Resolution or Ordinance
Attachment B: 2023 Rate Study - Volume 1
Appendix C of Attachment B: Customer Characteristics Analysis
Appendix D of Attachment B: Stantec Consulting Services Study Review Letter
Attachment C: 2023 Rate Study - Volume 2
Appendix C of Attachment C: Stantec Consulting Services Study Review Letter