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
Title
Resolution Approving the Purchase and Sale Agreement for the Castle Rock Reservoir Property and the Extra-Territorial Water and Wastewater Service Agreement Between the Town of Castle Rock and the Plum Creek Trust [Douglas County near Sedalia, Colorado]
Body
________________________________________________________________________________
Executive Summary
The purpose of this memorandum is to seek Town Council approval of a resolution (Attachments A):
1) A Purchase and Sale Agreement with Plum Creek Trust for a 145 acre parcel near Sedalia, Colorado, upon which current and future Castle Rock Water infrastructure resides and is being constructed; and
2) A Water Service Agreement with the PCT which describes how Castle Rock will service a potential future development on lands adjacent to the 145 acre parcel (see Attachment B).
Key terms of each agreement are as follows:
1) Purchase and Sale Agreement
a. Castle Rock will pay $2,269,794 for the 145 acre parcel.
b. All non-renewable groundwater underneath the parcel will be transferred to Castle Rock as part of the purchase.
c. All mineral rights under the property will be transferred to Castle Rock as part of the purchase.
d. Both parties agree to work with each other for easements that may be needed going forward at no cost to the other party.
e. The purchase is contingent on a Water Service Agreement to serve surrounding property owned by the Seller.
f. Closing this purchase agreement will essentially eliminate a 100 acre foot per year water service commitment to United Water and Sanitation District (United) associated with the property from our 2017 purchase of the United assets including the original 118 acre water infrastructure easement.
2) Water Service Agreement
a. Castle Rock Water agrees to be the retail water and sewer provider for the PCT development which could have up to a maximum of 500 housing units.
b. All non-renewable groundwater under the 145 acre parcel and the developable acres will be dedicated to the Town and be credited towards meeting the Town’s water dedication code requirements. This consists of approximately 397 acre-feet (AF) of non-renewable groundwater.
c. Castle Rock Water will agree to let PCT purchase “cash in lieu” groundwater credits for any additional credits needed for the development.
d. Castle Rock agrees to share the savings from the 100 acre foot water commitment to United that goes away and use some additional savings to reimburse for additional valuable property around the 118 acre water infrastructure easement, taking the total property interests to 145 acres. In total a 90 AF credit towards renewable water dedication requirements will be provided.
e. Castle Rock Water will allow PCT to sign an option agreement to purchase credits for any additional renewable water required for the property through expansion of one of Castle Rock’s existing renewable water projects.
f. Castle Rock Water will charge a 10% extraterritorial surcharge on all rates and fees associated with providing service to the property.
g. PCT will be responsible for all costs associated with extending services to the property to be served as well as all infrastructure within the property consistent with Castle Rock’s approach to any development.
h. Castle Rock Water will provide a “Will Serve Letter” consistent with the requirements of Douglas County for PCT to use in getting entitlements and zoning from Douglas County.
Budget Impact
The cost for the purchase of the 145 acre PCT property will be paid for out of the Water Resources Fund/Capital Projects/Reservoir Upgrades <Account Number 211-4375-443.79-15> which has a 2024 budget balance of $0. Thus, a budget amendment will be necessary to cover the $2,269,794 purchase price.
Recommendations
Staff discussed this item with Castle Rock Water Commission on February 28, 2024, and the Commission recommended Council approval of the Operations Agreement. Staff also recommends that Town Council approve the Purchase and Sale Agreement and the Water Service Agreement with PCT.
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: Contract to Buy and Sell Real Estate (Land)
Exhibit 2: Extra-Territorial Water and Wastewater Service Agreement
Attachment B: Map of Property and Infrastructure
Attachment C: Property Appraisal