To: Honorable Mayor and Members of Town Council
Through: David L. Corliss, Town Manager
From: Mark Marlowe, P.E., Director of Castle Rock Water
Matt Benak, P.E., Water Resources Manager
Angie Brown, Water Resources Program Analyst
Title
Resolution Approving the Grant of a Pipeline Right-of-Way by the Town of Castle Rock to Cureton Midstream, LLC [Box Elder Property in Weld County]
Body
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Executive Summary
Staff recommends approval of the attached Pipeline Right-of-Way Grant (Attachment A), granting an easement to construct a gas pipeline on Town-owned property in Weld County known as the Box Elder Property. The location of the proposed easement is shown on the attached map (Attachment B).
Castle Rock Water has requested Cureton Midstream, LLC (Cureton) provide payment to the Town for their easement in the amount of $21,675.30. This payment equates to $15.00 per linear foot of pipeline, a rate which was previously offered by Cureton in 2017 for their first gas pipeline easement. In 2017, a cost estimate for a pipeline easement in Douglas County was prepared by an outside consultant for Castle Rock Water to aide in determining whether the compensation offered by Cureton would be fair and equitable to the Town. It was determined that a similar easement in Douglas County would be valued at $0.035 per square foot for the temporary construction easement and $0.175 per square foot of the permanent easement, which returned a value of $5,422.24, meaning the Cureton offer was a good value to the Town. Using these same cost parameters and adjusting for time using the Consumer Cost Index, an easement similar to that currently requested by Cureton could be valued at $4,689.83 in Douglas County. Therefore, the 2021 compensation of $21,675.30 was determined by staff to still be a good value for Castle Rock.
History of Past Town Council, Boards & Commissions, or Other Discussions
On August 23, 2017, the Castle Rock Water Commission unanimously recommended support of the right-of-way grant with Cureton Midstream, LLC.
On September 5, 2017, Town Council voted 6 to 0 to approve the right-of-way grant with Cureton Midstream, LLC.
On March 24, 2021, Castle Rock Water Commission, by a vote of 6 to 0, voted to approve the right-of-way grant with Cureton Midstream, LLC.
Discussion
Cureton Midstream, LLC (“Cureton”) has requested a second easement to construct a 1,400-foot natural gas pipeline in Weld County on property owned by the Town of Castle Rock. To date, the Town has granted one prior easement to Cureton for one pipeline, and one easement to Discovery DJ Services, LLC (“Discovery”) for two pipelines. The easement currently being requested by Cureton would be the third easement for the fourth pipeline on this property; all easements are located in the same section of the property as shown in Attachment B. The property is planned to be utilized in the future as a part of the transition to renewable water.
The key terms of the Pipeline Right-of-Way Grant are as follows:
• 10 foot wide permanent easement and a 40 foot wide temporary construction easement.
• 400 square foot area for above ground valve.
• 3,118 square foot area for additional workspace outside the southeast corner of the temporary construction easement
• Location clearly marked with carsonite marker posts.
• Disturbed area returned to original condition as soon as possible by Cureton.
• Minimum depth of 48-inches so as to not interfere with farming activities.
• Relocated by Cureton at their expense if necessitated by development of Town facilities.
• 48-hour notice to Town required by Cureton prior to accessing the property.
• Cureton to remediate any hazardous material or other environmental contaminants introduced as a result of operation of the pipeline at no cost to Town.
• Cureton to pay all damages to property and crops to Town or tenant as applicable.
• Pipeline and easement to be properly abandoned by Cureton if inactive for over 1 year.
• Pipeline to be maintained by Cureton.
• Town indemnified from all liabilities and obligations.
• Commercial general liability insurance not less than $1,000,000 per occurrence required to be maintained by Cureton.
The pipeline will be designed and constructed to 49 CFR 192 “Transportation of Natural and Other Gas by Pipeline: Minimum Federal Safety Standards” and ASME B31.8 “Gas Transmission and Distribution Piping Systems”. The pipeline will be operated in conformance with industry standards. Language reflecting these two requirements has been included in the proposed agreement. Cureton has also indicated that the pipeline will have the following safety features:
• 24/7 Pipeline Control Monitoring
• Supervisory Control and Data Acquisition (SCADA)
• Leak Detection - Computational Pipeline Monitoring (CPM)
• Pipeline Patrol
• One Call
• Public Education
• Emergency Response Plan
Budget Impact
The compensation offered for this easement is $21,675.30, which will be deposited into account 211-4300-395.60-00 (Misc. Revenue).
Staff Recommendation
Staff recommends approval of the Pipeline Right-of-Way Grant.
Proposed Motion
“I move to approve the Resolution as introduced by title.”
Attachments
Attachment A: Resolution
Exhibit 1: Pipeline Right-of-Way
Attachment B: Location Map