To: Honorable Mayor and Members of Town Council
Through: David L. Corliss, Town Manager
From: Mark Marlowe, Director of Castle Rock Water
Mark Henderson, Assistant Director of Castle Rock water
Title
Resolution Approving Intergovernmental Agreements by and Between the Town of Castle Rock, Acting by and Through the Castle Rock Water Enterprise, and Denver Southeast Suburban Water & Sanitation District d/b/a Pinery Water & Sanitation District, for the Purchase and Sale of Rights in the WISE Project and WISE Infrastructure Capacity and for the Delivery of Water [WISE water to be used throughout Castle Rock Water’s service area]
Body
________________________________________________________________________________
Executive Summary
Castle Rock Water (CRW) staff recommends Town Council approval of a Resolution approving a Purchase and Sale Agreement with Denver Southeast Suburban Water & Sanitation District d/b/a Pinery Water & Sanitation District for WISE Capacity (see Attachment A). The Purchase and Sale Agreement is for 250 acre-feet (AF) of Water Infrastructure Supply Efficiency (WISE) capacity including the water subscription and all associated infrastructure shares (Western Pipeline, Binney Connection and Pump Station, DIA Connection, Ridgegate Pipeline, and all other associated infrastructure including future commitments to fund salinity management infrastructure). The purchase price is $2,138,388.05 as shown in the agreement (see Exhibit 1 of Attachment A).
CRW has evaluated the price, and the price includes what Pinery has paid for the actual shares and infrastructure. The price also does include a recovery of operational costs for the Pinery. CRW believes that the price including this operational component still provides excellent value given the cost of other renewable water resource supplies and the fact that the infrastructure for WISE is already in place.
CRW has invested $63.8M in WISE project shares since 2013. CRW currently owns 2,000 AF of WISE shares including associated shares in all of the infrastructure. Attachment B provides a map of all of the WISE infrastructure. The only remaining piece of infrastructure to be constructed in accordance with the WISE Water Delivery Agreement is a salinity management facility. Currently, this facility needs to be completed by 2030. CRW has reserved $57M in our five-year capital plan to fund CRW’s portion of this facility. This $57M also includes the amounts needed to fund the portion of the facility that would be funded by the Pinery if CRW proceeds with the purchase of Pinery’s shares.
The WISE project is one of two long-term, imported renewable water projects that CRW has been implementing since 2013 as part of our Water Resources Strategic Master Plan. The goal of the Plan is to achieve 75% renewable water supplies by 2050 and 100% renewable water supplies in a typical hydrologic year by 2065. Water deliveries from WISE started in 2018. To date, the largest amount of WISE water CRW has received in any given year is 1,242 AF of WISE water. WISE water is fully reusable to extinction. To date this year, CRW has provided 33% renewable water supplies. Starting in June of this year will be the first WISE year (June to May) where CRW anticipates receiving our full subscription of 2,000 AF.
Budget Impact
This item was not included in the 2025 budget. There is adequate excess WISE funding in the 2025 budget, however, with the purchase of these WISE shares, the salinity management capital costs will not accrue to the 2025 budget as they have already been reserved with capital funding along with CRW’s portion. The total purchase price for the Pinery WISE capacity and infrastructure is $2,138,388.05. This will be funded through the WISE Infrastructure account 211-4375-443.77-72, which has a balance of $5,031,354.
Staff Recommendation
Staff recommends Council approve the Resolution as presented and CRW proceed with the purchase of the 250 AF of Pinery WISE water shares including the corresponding infrastructure capacity.
Proposed Motion
“I move to approve the Resolution 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
Staff Report
Attachment A: Resolution
Exhibit 1: Purchase and Sale Agreement
Exhibit 2: IGA - Water Delivery Agreement
Attachment B: Map of WISE Infrastructure