To: Honorable Mayor and Members of Town Council
From: Mark Marlowe, P.E., Utilities Director
Title
Ordinance: Authorizing the Exercise of the Town’s Powers of Eminent Domain to Acquire Certain Property Interests Necessary for the WISE Infrastructure Transmission Line Project (Second Reading)
Body
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Approved on first reading with a vote of 5 to 1 with no changes.
Executive Summary
The purpose of this memorandum is to request Town Council approval for the adoption of an Ordinance (Attachment A) authorizing the exercise of the Town’s power of eminent domain for WISE local infrastructure, if necessary. The Water Infrastructure and Supply Efficiency (WISE) Project secures 1,000 acre-feet (AF) of renewable water, on average, from Denver and Aurora and builds infrastructure necessary to move water from the Peter Binney Water Purification Facility located at Aurora Reservoir to the Town of Castle Rock. It includes purchase and modifications to existing infrastructure as well as several miles of new pipelines, pump stations, and operating facilities.
The WISE Local Infrastructure Transmission Pipeline project is a subproject to the overall WISE project and consists of over five miles of pipeline for conveying the Town’s WISE potable water from an interconnect with the Parker Water and Sanitation District (PWSD) to the Ray Waterman Regional Water Treatment Plant. Most of the pipeline will be co-located within an approximately 200-foot wide Public Service Company of Colorado (Xcel Energy) utility easement. The preliminary alignment work has identified ten permanent easements and ten temporary construction easements required for the construction of this project. The Town has retained Western States Land Services to assist the Town in good-faith negotiations with the property owners to acquire the necessary easements. To meet the overall project schedule, the pipeline will be bid in the spring of 2016 and constructed to be in service by June 2017. In 2017, the Town is subject to a “take or pay” agreement for WISE supplies in which the Town is obligated to pay for participation whether or not we actually take any of our share of WISE supplies. Based on the current schedule for the project and past experience on other projects, approval for the use of eminent domain is recommended upfront in property negotiations to facilitate easement acquisition before final design and construction begins to avoid unnecessary delays.
Given the project schedule and experience on other projects, Staff respectfully requests adoption of this ordinance on first reading (see Attachment A) to allow property negotiations to commence immediately upon adoption. Legal descriptions for all affected properties have been prepared and the Town’s consultant is ready to begin the negotiation process. Attachment B shows the location of the proposed pipeline.
History
Utilities staff presented an update of this project as part of the overall Alternate Source of Supply Project Update to the Utilities Commission on July 22, 2015 and to Town Council on August 4, 2015. Presentations to the groups highlighted the recent progress for the hybrid solution. These types of renewable water projects support the Town’s long-term water goal of providing a 75% renewable water supply for the community at build-out.
Discussion
Background
A need for a sustainable long-term water supply was identified in the Town’s Water Resources Strategic Master Plan (WRSMP). One of the major goals of that plan is to establish renewable, sustainable water supplies that account for 75% of the annual demand for water in Castle Rock. Renewable water sources may include Plum Creek alluvial wells and surface water using existing Town water rights and imported surface water. Utilities has long planned to store renewable water in the Rueter-Hess Reservoir and has been a founding member and active participant of the WISE group. The WISE Local Infrastructure pipeline is needed to transport the Town’s renewable water supplies that originate outside the Town’s boundaries.
The transmission main will originate at a planned connection to PWSD’s water system at Outter Marker Road in Douglas County and will mostly traverse within an existing Xcel Energy easement (Attachment B) over privately owned parcels and parcels owned by Xcel Energy. The Town will need to secure its own easements with the private property owners and also secure a license agreement with Xcel Energy. The total length of pipeline is approximately 28,000 lineal feet (≈ 5.3 miles). The WISE water supplies to be conveyed to the Town beginning in 2017 could total up to 7 million gallons per day (MGD), with 4 million gallons per day (MGD) being Dominion’s share of supply. The Town anticipates northern water supplies to increase up to 16 MGD by 2025.
The transmission pipeline has been tentatively sized at 30 to 36 inches in diameter to convey from 15 to 22 MGD of renewable water supplies. Legal descriptions were prepared based on the alignment in the Xcel Energy corridor and were provided to the Legal Department for use during easement acquisition. It is critical to the project schedule that there not be lengthy property negotiations that could potentially delay construction.
Parcel Identification
With the horizontal alignment of the pipeline identified and easements widths determined, surveyors prepared the required permanent and temporary construction easements needed to construct the pipeline. Portions of the pipeline in Town or county-owned right-of-way are not included in this attachment because no easement is necessary. In general, we are seeking 40 feet of permanent easement and 30 feet of temporary construction easement from the property owners. Legal descriptions and exhibits were prepared for each parcel. These legal descriptions and exhibits were forwarded to Western States Land Services for use in property valuations and negotiations. Western States provided the Town with an estimate of easement values based on recent projects in that section of Town. Any easement that is estimated at a value of greater than five thousand dollars ($5,000) has been forwarded to a title company in order to obtain title commitments for each of the parcels. Once the title commitments are complete, appraisals will be obtained so that a value of the parcel can be determined. Any easement that is estimated at a value of less than $5,000 will have its value determined by a value finding conducted by Western States. Once the easement values are determined, the Town will make an initial offer based on these values.
Negotiation Process
As with any land acquisition, the property owner often has questions or concerns regarding impacts to the property and any existing improvements. The Town, through an acquisition agent, Western States, responds to these questions and concerns in an effort to negotiate an equitable solution and acquire the needed easement.
The negotiation process can be concluded relatively quickly for some parcels, but in other cases the process can be drawn out, and in rare situations a compromise cannot be reached at all and property must be acquired through condemnation. If we are unable to negotiate a fair and equitable solution regarding the easements, the project schedule could be impacted. Therefore, an ordinance authorizing condemnation is recommended.
Project Schedule
The WISE Local Infrastructure Pipeline Project is scheduled to be completed and conveying renewable water by the summer of 2017. The 5.3 miles of potable water transmission pipeline is one piece of the large, overall project. Preliminary design of the transmission pipeline began in August 2015 and will be completed in early 2016. The project will be bid for construction in March/April of 2016 and construction is anticipated to begin no later than June 2016 and be completed by May 2017. Due to the compressed schedule for the project, Staff recommends adoption of an ordinance to exercise eminent domain, if necessary, to avoid delaying this project due to property acquisition.
Budget Impact
Utilities budgeted $2,300,000 (Water Resources Capital Projects account 211-4375-443-77-72 WISE Infrastructure) in 2015 for the WISE project which includes $945,520 for infrastructure design projects associated with developing and conveying WISE water to the Town. Over $5.79 million is budgeted for construction of WISE system components, to include this local infrastructure pipeline from Outter Marker Road. Funds for this project will be derived from the Capital Improvement Project (CIP) Reserves, System Development Fees, and Renewable Water Rates. The funds required for the easement acquisition have been included in the project budget.
Staff Recommendation
Staff recommends that Town Council adopt an ordinance on second reading authorizing the use of eminent domain to acquire the required easements, if necessary.
Recommended Motion
I move to approve the Ordinance Authorizing the Exercise of the Town’s Power of Eminent Domain for the WISE Local Infrastructure Pipeline Project on second reading.
Attachments
Attachment A: Ordinance
Exhibits 1-28: Legal descriptions
Attachment B: Location Map