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
WISE Project Update
Body
________________________________________________________________________________
Executive Summary
The intent of this memorandum is to 1) update Town Council on the Water Infrastructure Supply Efficiency (WISE) project, 2) provide context for other upcoming projects, commitments, and budgetary impacts anticipated in 2021, and 3) obtain approval for a Resolution for 2021 costs for the Binney Connection for an amount not to exceed $476,100, and a Resolution authorizing the Town Manager to approve 2021 monthly WISE delivery costs which are anticipated to exceed $250,000 during the summer months . In 2021, Staff anticipates spending the full budgeted amount of $2,804,125 on 1,000 AF of WISE water deliveries, and $2,000,000 on Capital Improvement Projects (CIP) including the Binney Connection, Parker Water & Sanitation (PWSD) Mid-Section Pipeline Project, and more. Further detail regarding water deliveries and CIP will be discussed below and can be found in summarized tables in Attachment A and Attachment B.
The WISE project is a key piece of Castle Rock Water’s long term renewable water plan. The goal of that plan is to achieve 75% or more of Castle Rock’s supply as renewable water in an average year by 2050. WISE water will ultimately make up approximately 12% or more of the Town’s supply depending on the Town’s long term population.
History of Past Town Council, Boards & Commissions, or Other Discussions
On March 3, 2020, Town Council unanimously approved Resolution 2020-032 Authorizing Payment of Castle Rock Water's Portion of the 2020 Binney Connection Fee and the Meridian Title Clean-Up Fee for the Water Infrastructure Supply Efficiency (WISE) Project. Staff also presented Town Council with an overview and update of all components of the WISE Project.
On August 26, 2020, Castle Rock Water Commission voted unanimously to recommend Town Council approval of the exchange of Cherokee ground water rights for a portion of Dominion Water and Water Sanitation District’s excess WISE infrastructure capacity.
On September 1, 2020, Town Council approved by a vote of 6 to 0 the First Reading of Ordinance 2020-018 approving the Fourth Amendment to the Intergovernmental Agreement for the Option to Purchase and Right of First Refusal Regarding Ground Water Rights, Easements, and Related Improvements, which conveyed Cherokee Ranch ground water rights to Dominion Water and Sanitation District in exchange for conveyance of additional capacity in WISE infrastructure components to the Town.
On September 15, 2020, Town Council unanimously approved the Second Reading of Ordinance 2020-018 approving the Fourth Amendment to the Intergovernmental Agreement for the Option to Purchase and Right of First Refusal Regarding Ground Water Rights, Easements, and Related Improvements, which conveyed Cherokee Ranch ground water rights to Dominion Water and Sanitation District in exchange for conveyance of additional capacity in WISE infrastructure components to the Town.
On February 24, 2021, Castle Rock Water Commission voted unanimously to recommend Town Council approval of the intergovernmental agreement with Parker Water and Sanitation District for the design, construction, and project management of the Parker Mid-Section Pipeline and Canyons Pump Station expansion.
On March 16, staff presented Town Council with their recommendation to approve Resolution 2021-033, approving the intergovernmental agreement (IGA) with Parker Water and Sanitation District (PWSD) for the design, construction, and project management of a 2-mile long, 42-inch pipeline and to expand the Canyons Pump Station for the conveyance of the Town's WISE water through PWSD. Town Council unanimously voted to approve the resolution as presented.
April 20, 2021 Town Council voted to approve the First Reading of Ordinance 2021-010 approving the Fifth Amendment to the Intergovernmental Agreement for the Option to Purchase and Right of First Refusal Regarding Ground Water Rights, Easements, and Related Improvements, which conveyed Cherokee Ranch ground water rights to Dominion Water and Sanitation District in exchange for conveyance of additional capacity in WISE infrastructure components to the Town.
On May 4, 2021 Town Council voted to approve the Second Reading of Ordinance 2021-010 approving the Fifth Amendment to the Intergovernmental Agreement for the Option to Purchase and Right of First Refusal Regarding Ground Water Rights, Easements, and Related Improvements, which conveyed Cherokee Ranch ground water rights to Dominion Water and Sanitation District in exchange for conveyance of additional capacity in WISE infrastructure components to the Town.
Additional history prior to March of 2020 is provided in Attachment C.
Discussion
Project Description & Intergovernmental Agreements (IGAs)
The Water Infrastructure & Supply Efficiency (WISE) Project is a first of its kind partnership between Denver Water, Aurora Water, and 10 water providers in the south metro Denver area that efficiently utilizes shared infrastructure and renewable and reusable water supplies on the South Platte River.
In 2002, the Front Range of Colorado experienced a historic drought that catalyzed Aurora Water’s efforts to develop a project that would return their renewable and reusable water supplies on the South Platte. The resulting project, known as the Prairie Waters Project (PWP), captured these supplies near Brighton, CO and conveyed them back to Aurora’s service area through a series of pipelines and pump stations. The project cost Aurora Water $600 million and, while it provided a much needed drought supply, left Aurora with excess water supplies in hydrologically wet and normal years and the financial burden of an expensive project.
Around the same time, Denver Water was investigating ways they could also convey their renewable and reusable supplies back to their service area, and began initial discussions with Aurora on how they could partner on a project that would provide both entities with a drought-resilient water supply.
Meanwhile, water providers in the south metro Denver area were in search of renewable and reusable surface water supplies to reduce their reliance on non-renewable groundwater, and partnered together to form the South Metro Water Supply Authority (SMWSA), and later joined conversations with Denver and Aurora to investigate a joint project. Ultimately this conversation conceptualized the WISE Project which would provide interested SMWSA members with Denver and Aurora’s renewable and reusable supplies in hydrologically normal and wet years, Denver with an emergency drought supply, and Aurora Water with funding through the sale of WISE water to SMWSA to help offset PWP costs.
In order to later formalize a partnership with Denver Water and Aurora Water, ten of SMWSA’s fourteen members created the South Metro WISE Authority, through the signing of the South Metro WISE Authority Formation and Organizational Intergovernmental Agreement (Formation IGA) in 2013.
Several months after the Formation IGA was fully executed, Denver Water, Aurora Water, and the South Metro WISE Authority (SMWA) formally entered into the WISE Partnership through the full execution of the WISE Partnership Water Delivery Agreement (WDA) between Denver Water, the City of Aurora, acting by and through its Utility Enterprise, and the South Metro WISE Authority in 2013.
The WISE Partnership originally envisioned that 100,000 acre-feet (AF) of WISE water would be conveyed to SMWA members over a 10-year period. However, SMWA members could only commit to 72,250 AF at the time. Not wanting Douglas County water providers to miss out on a renewable water supply, Douglas County stepped in and agreed to hold 2,775 AF in reserve for any interested user within their jurisdiction. This reserved water is what we now refer to as Douglas County Option water.
The WDA outlined several key terms for the WISE Partnership:
• Aurora Water would offer 72,250 AF of WISE water to SMWA over a 10-year period. This volume has since been updated to 100,000 AF over 10 years after SMWA chose to increase their subscription through the Douglas County Option.
• Aurora has maximum and minimum volumes of water they can offer seasonally and over time periods spanning up to five years.
• SMWA is obligated to accept a minimum volume of water in any given WISE year based on Aurora Water’s offer known as Take-or-Pay (TOP) water, meaning SMWA will pay for TOP water regardless of whether the membership accepts the full minimum amount.
• Denver Water has the right to use WISE water in 15 out of every 100 years, most likely meaning SMWA members will not receive any WISE water in that year or be able to utilize certain WISE infrastructure.
• A WISE Year is defined as June 1 through May 31 of the following year and defines the period of time in which Aurora can offer and SMWA can accept WISE water.
• Aurora Water would gradually increase annual offers of water to SMWA beginning in June 1, 2017 and continuing through May 31, 2021, so that WISE members have ample time to adjust their systems and operations to receive WISE water. This timeline has since been extended to May 21, 2025 with the increased subscription through the Douglas County Option.
WISE Year & Take-or-Pay Obligation
Included in the Formation IGA were the average annual shares of WISE water each SMWA member committed to receive annually, commonly referred to as pro-rata WISE water subscriptions. In 2013, the Town of Castle Rock committed to 1,000 AF out of the total SMWA subscription of 7,225 AF annually, meaning on average the Town would pay for 1,000 AF of WISE water whether or not the Town accepted the full offer from Aurora. This also meant that the Town generally owned a 14% subscription in SMWA owned infrastructure. However, this percent subscription and infrastructure ownership has since changed due to the purchase of additional capacity and Douglas County Option water which will be discussed later in this memo.
When Aurora began offering WISE water to SMWA on June 1, 2017, the infrastructure necessary to convey water to participants in the Ridgegate Pipeline (discussed below) was not yet completed, thus Castle Rock was not able to accept any WISE deliveries until April 2018 when Castle Rock received its first WISE water. Because less than a month remained until WISE Year 2 began, and because the majority of SMWA members had not yet been able to receive their WISE water, Aurora Water offered a one- time compromise in which SMWA members were able to pay for their WISE Year 1 TOP prior to May 31, 2018, while receiving their actual deliveries during WISE Year 2. The Town received all WISE Year 1 water that was paid for in advance during summer 2018.
Key Infrastructure & Ownership Capacities
As discussed above, the WISE Project efficiently utilizes water resources by capturing renewable and reusable Denver Water and Aurora Water supplies on the South Platte, and conveying that water through infrastructure shared (to varying degrees) by the WISE Partners (Aurora Water, Denver Water, and SMWA) and East Cherry Creek Valley Water (ECCV). Key Infrastructure is described in Attachment D and shown visually in Attachment E.
WISE water is provided to members of SMWA through the use of Aurora Water’s Prairie Waters Project (PWP) which captures renewable and reusable water supplies on the South Platte. The water captured and conveyed by PWP consists of supplies owned by both Aurora Water and Denver Water to varying degrees depending on hydrologic conditions. This partnership provides water to SMWA members in hydrologically wet and normal years, and provides Denver Water with an emergency drought supply in 15 out of every 100 years.
From the PWP Pipeline, WISE water is treated at Aurora Water’s Binney Water Purification Facility and is then conveyed to SMWA members primarily through the Western Pipeline. However, several members receive water by conveying their water through a single connection on the Western Pipeline known as the Ridgegate Connection, and then through infrastructure owned by Parker Water and Sanitation District where they receive their water at their local connection. SMWA Members receiving their water through the Ridgegate Connection (Ridgegate Participants) include:
• Parker Water and Sanitation District (PWSD)
• Pinery Water and Wastewater District (Pinery)
• Castle Rock Water (CRW)
• Dominion Water and Sanitation District (Dominion)
Discussion & Updates
Water Deliveries
|
Deliveries to Date by WISE Year |
|
|
WISE Year |
Start |
End |
SMWA Obligation (AF) |
CRW Obligation (AF) |
CRW Received (AF) |
Cost of Deliveries + O&M |
Cost of Deliveries (PWSD) |
Total Cost |
|
Ramp-Up Period |
1 |
Jun-17 |
May-18 |
1,500 |
208 |
280 |
$ 530,900 |
$ 13,700 |
$ 544,600 |
|
|
2 |
Jun-18 |
May-19 |
2,500 |
346 |
981 |
$ 1,899,200 |
$ 183,900 |
$ 2,083,100 |
|
|
3 |
Jun-19 |
May-20 |
3,500 |
484 |
1,012 |
$ 2,141,000 |
$ 194,000 |
$ 2,335,000 |
|
|
*4 |
Jun-20 |
May-21 |
5,000 |
692 |
950 |
$ 1,840,750 |
$ 220,000 |
$ 2,060,750 |
|
DC Option Ramp-Up |
*5 |
Jun-21 |
May-22 |
5,000 |
692 |
1,000 |
$ 1,864,800 |
$ 161,100 |
$ 2,025,900 |
|
|
*6 |
Jun-22 |
May-23 |
7,919 |
1,250 |
1,250 |
$ 2,331,000 |
$ 201,400 |
$ 2,532,400 |
|
|
*7 |
Jun-23 |
May-24 |
8,613 |
1,500 |
1,500 |
$ 2,913,800 |
$ 251,800 |
$ 3,165,600 |
|
|
*8 |
Jun-24 |
May-25 |
9,307 |
1,750 |
1,750 |
$ 3,642,300 |
$ 314,800 |
$ 3,957,100 |
|
Full Deliveries |
*9 |
Jun-25 |
May-26 |
10,000 |
2,000 |
2,000 |
$ 4,550,000 |
$ 550,000 |
$ 5,100,000 |
|
*Estimated costs and volumes |
WISE Year 4 began on June 1, 2020 and will be completed on May 31, 2021. Castle Rock Water (CRW) is invoiced monthly for WISE water deliveries from Aurora Water and PWSD for conveyance through their system. In 2020, the WISE water rate from Aurora was $5.99 per one-thousand gallons (kgal), and the conveyance fee from PWSD was $0.57 per kgal. Starting on January 1, 2021, Aurora Water decreased their WISE water rate to $5.98 per kgal which will remain the rate through December 31, 2021 (Attachment F). PWSD’s conveyance fee will remain at $0.57 per kgal through the end of WISE Year 4 (5/31/21) and it is anticipated they will increase their fee for WISE Year 5 after re- evaluation. CRW anticipates completing WISE Year 4 TOP and making significant progress in WISE Year 5 TOP within the 2021 budget.
In WISE Year 4, CRW’s TOP obligation is 692 AF. As of the March 2021 invoice issued by SMWA, CRW has received credit for 647 AF of WISE water, leaving 45 AF remaining to complete CRW’s WISE Year 4 TOP obligation. Although CRW has only received credit for 647 AF of WISE water since June 1, 2020, through trades with other SMWA members, CRW has received 803 AF of WISE water for a total cost of $1.84 million including O&M and PWSD conveyance fees.
Due to trades negotiated with other SMWA members, it is anticipated CRW will reduce WISE costs in early 2021 and receive a total of 163 AF of WISE water from January 1, 2021 through May 31, 2021 for approximately $363,000 including O&M and PWSD conveyance fees. With a budget of $2.6 million in 2021 for WISE water, this will leave us approximately $2.2 million for the remainder of 2021, primarily to help meet summer demands. Originally, Staff anticipated Full Deliveries of WISE water would begin on June 1, 2021, meaning CRW would begin receiving 2,000 AF annually and budgeted to accommodate this increase in deliveries. However, SMWA members who increased their subscription through the Douglas County Option chose to exercise a clause that allows SMWA to increase WISE deliveries by 25% annually beginning on June 1, 2022 and continuing through May 31, 2025. Because the 2021 budget anticipated 2,000 AF of deliveries instead of the now anticipated 1,000 AF, the potential exists to facilitate trades for additional WISE water during the drought that is expected to worsen this summer.
At this time, staff anticipates WISE water deliveries in 2021 will be offered by Aurora at a lower rate than offered in the summers of 2019 and 2020 when CRW received approximately 700 AF of WISE water for a cost of $1.6 million. In the summer of 2021, staff anticipates receiving 630 AF for a total cost of approximately $1.3 million dollars. Aurora Water will likely stop deliveries in November and December to conduct maintenance, and deliveries will commence in January 2022 at which time CRW will reduce flows to our pro-rata share. This should allow us to come in near budget, and will result in a total WISE water delivery of roughly 880 AF in 2021, and total TOP credit of nearly 315 AF from June 2021 through December 2021 which will leave roughly 380 AF remaining to take down in early 2022. With 380 AF remaining to take down in early 2022, CRW will plan to adequately budget for this remaining TOP volume as well as for demand season of 2022, which is when CRW’s TOP obligation will increase from 692 AF to 1,250 AF.
CRW Staff expects WISE costs in 2021 to be $2 million, well under the budgeted amount of $2,804,125 for WISE water deliveries which includes the cost of WISE water, O&M charges from SMWA, conveyance fees through PWSD, and potential deliveries of Rueter-Hess Reservoir supplies. With the budget available, Staff will look for opportunities to conduct additional trades with other SMWA members and to convey additional stored supplies in Rueter-Hess Reservoir in order to help meet summer demands for renewable and reusable water during the projected drought. Therefore, Staff is anticipating to utilize all funds budgeted for WISE deliveries in 2021. Funds will be paid from the Other Professional Services Account <211-4340-443.30-70>. Additional detail including Project Codes and a breakout of anticipated spending in comparison to the 2021 Budget, can be found Attachment G.
Invoicing for Water Deliveries
Since CRW began receiving WISE deliveries in April 2018, the average monthly cost of WISE water has been roughly $192,000, with a high monthly cost of $560,000 in July of 2019. Since April 2018, CRW has sent check requests directly to Finance who then forwarded the request for approval by the Town Manager. Approval from Town Council was not sought out because it was the understanding of Staff that since Town Council had already approved the Formation IGA and annual budget, by extension Town Council had already approved monthly invoices.
However, after reconsidering this process in late 2019, CRW and Finance determined it would be in the best interest of the Town to develop an alternate Best Practice which is outlined below.
Beginning in 2020, CRW has provided Town Council with annual WISE Project updates which include expected costs of WISE water deliveries for the calendar year and also delineates between WISE water years so that Town Council and the Town Manager are aware of expected costs for WISE year minimum water delivery obligations. It is the intention of CRW that the update will thereby function as Town Council approval for monthly invoices in excess Town Manager approval, barring any alternate direction by Town Council after being presented with the annual update. Then, when monthly WISE water delivery invoices are received for amounts above the CRW Director’s signing authority (including conveyance fee invoices from PWSD for WISE or Rueter-Hess deliveries), CRW Staff will send a check request to the Town Manager with the attached Annual WISE Update Summary Memo (Attachment H) which will include references to approved resolutions including approval of the Formation IGA Second Amendment to the Formation IGA, Douglas County Option purchase, and the 2021 budget.
Operations with Dominion Water & Sanitation District
In 2014, CRW and Dominion Water and Sanitation District (Dominion) entered into the 2014 Water Service Intergovernmental Agreement (2014 Dominion Wheeling IGA). Among the terms of the IGA is the Town’s commitment to provide Dominion with the ability to move up to 4.0 million gallons per day (MGD) of their water through the Town's system and other facilities shared by the Town and Dominion, with CRW receiving reimbursement for losses through the system as well as a conveyance charge.
In 2016 the Town entered into the Firming Service Commitment agreement with Dominion. At a basic level, the agreement provides the Town with additional supplies which, in turn, the Town agreed to deliver to Dominion in years when Dominion’s demand exceeds their WISE supplies.
The 2014 Dominion Wheeling IGA and the 2016 FSC IGA have multiple advantages for the Town:
• Recovering costs of extra capacity within the Town’s existing infrastructure that is not currently utilized. The agreement could result in annual revenues of approximately $600,000 based on the current calculated rate, and more if treatment of the water is required.
• Continues our regional water partnership with Dominion.
• Provides emergency redundancy to our system.
• $180,000 one-time connection fee charge.
• Five percent of the water provided by Dominion will be given to Castle Rock to cover losses through our system.
• Capacity reservation fee of $150,000 in 2019 and any year thereafter (with amounts over $50,000 applied to a one-time connection fee) are assessed to reserve future capacity in the pipeline until water is moved through the system.
In 2019, CRW staff began monthly discussions with Dominion to develop operating standards in a memorandum of understanding (MOU) that would accomplish the following based on the language of the 2014 and 2016 IGAs:
• Document the agreed upon intent of the IGAs.
• Outline daily, monthly, annual and emergency Standard Operating Procedures.
• Best practices for flow change coordination including annual and monthly or quarterly coordination meetings.
• Develop water accounting to track water delivered to CRW and received by Dominion.
• Develop monthly accounting protocol.
In 2020, CRW and Dominion collaborated to complete the majority of the above mentioned items. However, CRW and Dominion determined that it would be mutually beneficial to explore options to simplify the terms of the agreements in order to ensure consistent and ongoing administration of the agreements through changes in staffing through time. In order to facilitate these discussions, CRW and Dominion are in the process of completing an MOU for interim WISE operations through May 31, 2025 which will essentially function as a wheeling agreement for lower than anticipated Dominion WISE deliveries. At this time, Dominion plans on receiving their first deliveries of WISE water through CRW’s system in 2022. Staff plans on completing the Dominion MOU in 2021.
Douglas County Option
As discussed in the Background, Douglas County held 2,775 AF of annual WISE water in reserve for interested Douglas County parties. With approval from Castle Rock Water Commission and Town Council, in 2018 CRW began the process to secure an additional 1,137.5 AF of WISE water annually (half of the Douglas County Option water), which would have increased CRW’s annual subscription to 2,137.5 AF. However, once CRW and PWSD began pursuing the Douglas County Option water, additional SMWA members expressed interest in purchasing some of the reserved water. In order to continue to promote regional partnerships and in accordance with the process Douglas County and SWMA used to divide the option water, CRW relinquished 137.5 AF of the Option water for other WISE members to purchase for their annual subscription. The final division of the WISE option water is as follows:
|
WISE Member |
Douglas County Option |
|
Town of Castle Rock |
1,000 AF |
|
Meridian Metropolitan District |
475 AF |
|
Parker Water & Sanitation District |
800 AF |
|
TOTAL |
2,275 AF |
This brings the Town’s purchase of Option water to 1,000 AF and increases the Town’s total subscription of WISE water from the original subscription of 1,000 AF annually to 2,000 AF.
To date, CRW has paid a total of $1,455,420.00 from the WISE Infrastructure account <211-4375- 443.77- 72> for two invoices received in 2019 and 2020 which comprises the full amount due from the Town to complete the purchase of the Douglas County Option. Additionally, in 2020 the Town received a re-imbursement of $568,330.81 for a true-up of Douglas County Option costs and Operational Reserve Fees paid by SMWA members.
Capacity Needs
When the WISE Authority formed in 2013, CRW originally subscribed to 1,000 AF of annual WISE flows and subsequently purchased capacity in WISE infrastructure proportionate to CRW’s pro-rata water subscription. CRW’s original capacity subscription was sufficient, or nearly sufficient to meet even maximum WISE flows.
However, since 2013, CRW has secured additional water rights northeast of the Denver Metro area which Staff anticipates bringing to the Town through the WISE infrastructure at a rate of 3 million gallons per day (MGD) as a base flow beginning in the late 2020’s. Furthermore, CRW purchased Douglas County Option water which will increase our pro-rata share of WISE offers from 14% to 20% beginning June 1, 2025. Including the original WISE subscription, the Douglas County Option, and future northern supplies (from our Box Elder project), the average daily flow can now be anticipated at a rate of approximately 5 MGD while maximum flows can be expected at 9 MGD. Once CRW began pursuing Douglas County Option water in 2018, Staff assessed the need to secure additional infrastructure capacity and Town Council has since approved the purchase of additional capacity in the Binney Connection, the Western Pipeline, and the Ridgegate Pipeline from Pinery and Dominion. The tables below reflect these updated capacities and outline expected flow rates from our northern supplies and the average and maximum anticipated WISE flows in light of current capacity ownership:
|
Flows Influencing Capacity Needs |
|
Planned Box Elder Flows (MGD) |
3.00 |
|
Average TCR WISE Flows (MGD) |
1.78 |
|
Maximum TCR WISE Flows (MGD) |
6.00 |
|
Average WISE + Box Elder Flows (MGD) |
4.78 |
|
Maximum WISE + Box Elder Flows (MGD) |
9.00 |
|
Town of Castle Rock WISE System Capacity Needs |
|
|
Current System Capacity (MGD) |
CRW Current Owned Capacity (MGD) |
Additional Capacity needed for Maximum WISE & Box Elder Flows (MGD) |
|
Binney Connection |
30.0 |
5.29 |
0.71 |
|
Western Pipeline |
38.0 |
7.78 |
1.22 |
|
Ridgegate Pipeline |
15.0 |
4.00 |
5.00 |
|
*PWSD Mid-Section |
10.2 |
1.00 |
8.80 |
|
**PWSD Western Loop |
0 |
0 |
12.20 |
|
Canyons Pipeline |
18.3 |
8.80 |
- |
|
**Outter Marker Road Pipeline |
14.0 |
9.80 |
11.20 |
|
*CRW, PWSD, and Dominion have received bids for design of this infrastructure and are in process of identifying a contractor. |
|
**This infrastructure is anticipated to be completed in 2030 and will be used to convey Rueter-Hess supplies, projected to be a maximum of 12 MGD, in addition to WISE and Box Elder supplies. |
As demonstrated in the table above, the biggest need to increase capacity is through PWSD’s system. In 2020, Staff determined the most cost-effective and timely solution would be to pursue construction of infrastructure to increase capacity on the east side of Rueter-Hess Reservoir, known as the PWSD Mid-Section. This will be discussed in the section below.
If CRW is offered the maximum 6 MGD from Aurora, CRW will be limited by capacity in nearly every section of WISE infrastructure, meaning that in order to take full advantage of offers of WISE water, CRW will need to purchase additional capacity in existing infrastructure or will need to work with other entities to develop projects that will increase infrastructure capacity, or lease capacity from other members if available.
In 2020 and 2021, Staff was able to increase CRW’s capacity in the Binney Connection, Western Pipeline, and WISE Core infrastructure by exchanging Cherokee groundwater rights for Dominion’s excess WISE capacity, thereby reducing future costs of increasing capacity in the WISE system.
At this time, CRW is focusing on increasing capacity through PWSD’s system where the greatest need for capacity exists.
Parker Water & Sanitation District (PWSD) Mid-Section
In order for CRW to receive WISE water deliveries at Ray Waterman Water Treatment Plant, or directly into distribution, water must be conveyed through PWSD’s distribution system. In 2018, the Town of Castle Rock entered into a Wheeling Agreement with PWSD (PWSD Wheeling IGA). The PWSD Wheeling IGA provides CRW with a temporary license of 1 MGD capacity through PWSD’s eastern Rueter-Hess Reservoir (RHR) pipeline through 2024, and acknowledges that PWSD’s existing infrastructure capacity to convey WISE water from the Ridgegate Pipeline to Castle Rock’s Outter Marker Pipeline is not sufficient to meet full WISE deliveries. Therefore, the PWSD Wheeling IGA contemplates a replacement pipeline to the east of RHR, paralleling the current pipeline that would be constructed by PWSD, Dominion, and CRW.
A 2015 joint study between CRW and PWSD envisioned a second larger pipeline on the western side of RHR that would provide enough capacity for CRW to convey a total of 21 MGD of supplies between the eastern and western RHR pipelines to meet long-term demands, plus additional capacity for PWSD and Dominion.
In 2019, PWSD modeled their system demands as part of their Master Plan update. The model showed that the larger pipeline on the western side of RHR was needed more immediately than the eastern RHR replacement pipeline. In late 2019 CRW Staff met with PWSD, Dominion, and Shea Homes to discuss conveyance needs including volume and timing. It was determined that further study would be needed and, in February 2020, the group contracted with Jacobs Engineering to:
• Identify design flows for each party (PWSD, Dominion, CRW)
• Refine the western RHR facilities configuration (pipeline and pump stations)
• Estimate and allocate costs
Results of the study showed that in order to construct the infrastructure on the west-side of RHR, known as the Western Loop, Castle Rock would need to bear a disproportionately high cost to construct the needed infrastructure. Instead, CRW was able to negotiate completing construction on the east-side of RHR, known as the PWSD Mid-Section, which is anticipated to be completed by December 31, 2023. The Town will still need to construct the Western Loop prior to 2030 in order to convey the Box Elder and water stored in RHR in addition to full WISE deliveries.
Binney Connection
WISE Authority members have been receiving water from Aurora since 2017 through a temporary connection from Aurora’s system to the Western Pipeline, known as the Temporary Aurora Connection. This connection only has capacity to convey 15 million gallons per day (MGD), which is 15 MGD less than the maximum volume SMWA members have the potential to receive from Aurora (30 MGD), and it has been long understood that additional infrastructure would need to be built to continue deliveries from Aurora in perpetuity.
As part of the WDA signed by SMWA in 2013, the WISE Authority agreed to construct infrastructure connecting the WISE Pipeline to Aurora’s system. SMWA agreed to complete this connection, referred to in the WDA as the Binney Connection, by May 31, 2021.
Once members began receiving WISE deliveries in the summer of 2017, SMWA began efforts needed to construct the Binney Connection. Proposals were received from consultants to determine the location and alignment of the infrastructure needed to connect from Aurora’s Binney Water Purification Facility north of Aurora Reservoir, to SMWA’s Western Pipeline, running along E-470.
In 2018, SMWA selected a location for both the pipeline alignment to connect to the Western Pipeline and the connections pump stations. Shortly afterwards Jacobs began designing Binney Connection infrastructure and the initial design was completed in 2019. In December 2019, SMWA sent the design out to solicit proposals for construction.
Construction began in 2020 and, because of schedule delays due to the coronavirus pandemic, the connection is anticipated to be completed in late 2021 instead of June 2021.
In 2020, the Town paid $5.6 million for Binney Connection construction costs including a 5% contingency of $281,741.20. The 2021 SMWA budget (Attachment I) estimated CRW’s share of Binney costs to be $459,339, which includes an additional 5% contingency, operational costs, and costs to connect Rangeview Metropolitan District to the Binney Connection, a cost shared by all SMWA members.
However, on May 4, 2021, Town Council approved Ordinance 2021-010 which approved the exchange of Cherokee groundwater rights for a portion of Dominion’s excess WISE infrastructure capacity, which included capacity in the Binney Connection. With CRW’s increased ownership in the Binney Connection, Staff projects that the 5% contingency will increase to approximately $315,000, and further anticipates that the total 2021 Binney Connection costs, including the 5% contingency, will increase to approximately $476,100. Therefore, Staff is requesting approval of Resolution 2021-xxx which authorizes payment for 2021 Binney Connection costs for an amount not to exceed $476,100.
It is anticipated that CRW will be invoiced for these costs in the second half of 2021 for the Town’s portion of Binney Connection construction costs and Rangeview connection. This cost has been budgeted for and will be invoiced out of the WISE Infrastructure account <211-4375-443.77- 72>, Project Code WR_WBC.
The Binney Connection has been designed to flow 30 MGD, of which the Town currently owns 5.29 MGD. In order to accommodate the Town’s portion of maximum flows (6 MGD of 30 MGD offered), the Town will need to purchase at least 0.71 MGD of additional capacity. Further detail is provided above in the “Capacity Needs” section.
DIA Connection
Part of the supply that Denver Water contributes to the WISE Project is located near Denver International Airport (DIA). In order to convey this water to SMWA members, and ultimately to Denver Water’s service area in emergency drought conditions, it is necessary to build a connection from DIA to the WISE system, referred to in the WDA as the DIA Connection.
Two options exist to connect Denver’s DIA supply to the WISE system. The first option for a connection would be to Aurora’s PWP Pipeline where the supply would be conveyed to the WISE system through the Binney WPF with the rest of the WISE water supply. The second option would be for Denver to connect to ECCV’s Northern Pipeline and to connect into the Western Pipeline through future infrastructure including a pump station and a station for chloramine conversion. Since CRW plans to convey our northern supplies through ECCV’s Northern Pipeline, the second option could be beneficial in that the infrastructure needed to join the Northern and Western Pipelines would then be a WISE Partnership project rather than solely a CRW project.
There has been delay in determining which option will be pursued as Denver Water has been awaiting determination from the Environmental Protection Agency (U.S. EPA) on whether or not they would need to add orthophosphates to their supply for corrosion control. In January 2020, Denver Water received a three-year variance from the U.S. EPA which allowed them to forgo adding orthophosphates to their system which allows the WISE Partnership to begin discussion on which option to pursue, though the final determination will be made once it is understood what the U.S. EPA’s long-term requirements for Denver Water regarding orthophosphates will be.
As a participant in the WISE Project through SMWA, the Town has agreed to participate financially in certain infrastructure projects as outlined in the WDA including the DIA Connection. The WDA outlines a payment schedule for SMWA to pay Denver Water for the construction of the DIA connection. Because the WDA requires Denver Water to construct the DIA Connection prior to 2021, the WDA will need to be amended (discussed below in “Intergovernmental Agreements”).
SMWA began collecting DIA Connection fees from members in 2014 to fulfill terms of the WDA. Castle Rock Water has paid these fees annually since that time and, per the WDA, it was anticipated that the 2020 payment was the final fee collected for the DIA connection. However, in 2020 SMWA learned that additional funds needed to be collected in order to fully construct the DIA connection. It is anticipated that these funds will be collected in 2022 and that CRW’s share of costs will be $458,800. At that time, payment will be made from the 2022 CIP/ WISE Infrastructure account <211- 4375- 443.77-72>, Project Code WRWPSF.
Intergovernmental Agreements (IGA’s)
Currently the WDA requires Denver Water to construct the DIA Connection by 2021 and the Binney Connection to be constructed by June 1, 2021. Due to delays related to the pandemic as well as delays directly related to the EPA’s recent orthophosphates requirements, timely completion of these projects as outlined in the WDA was not feasible.
Furthermore, both the WDA and the Formation IGA specify that SMWA will receive on average 7,225 AF annually, and the Formation IGA further delineates each SMWA member’s pro-rata WISE water subscription prior to the Douglas County Option water purchase. The delay in the DIA and Binney connections, and the purchase of Douglas County Option necessitate amendments to both the WDA and the Formation IGA.
SMWA began work amending the Formation IGA in 2019 with updated pro-rata shares of WISE water after the purchase of Douglas County Option water. On January 7, 2020, CRW staff presented the amended IGA to Town Council which was unanimously approved.
Also in 2019, SMWA staff met with Denver Water and Aurora Water to begin discussions on amending the WDA with updated values directly affected by the purchase of Douglas County Option water and to amend the timing of certain WISE infrastructure elements including the DIA and Binney connections. The negotiations group has been meeting regularly to discuss specific topics of the WDA and an amendment to the WDA is anticipated in the 3rd Quarter of 2021.
Total Dissolved Solids (TDS) Management
Total Dissolved Solids (TDS) refer to any minerals, salts, metals, cations, or anions dissolved in water and are comprised of inorganic salts and some small amounts of organic matter that are dissolved in water. Primary drinking water standards have not been established for TDS, though the current secondary standard is 500 milligrams per liter (mg/L), which was also the standard at the time the WDA was fully executed.
Through May 31, 2030, Denver Water and Aurora Water are required, per the WDA, to deliver water with a TDS concentration at or below 500 mg/L. Salinity in water diverted near Brighton (where Aurora Water captures return flows that are in part utilized as WISE water deliveries to SMWA) can vary from below 500 mg/L of TDS during the spring to above 700 mg/L of TDS during low flow periods such as the winter. Currently, Denver Water and Aurora Water meet this water quality goal by blending some of their low TDS mountain water supplies with the water captured on the South Platte. After May 31, 2030, the WDA allows Denver Water and Aurora Water to deliver unblended WISE water to SMWA.
To mitigate the TDS concentrations of WISE water after 2030, SMWA will need to develop a project to decrease TDS concentrations. SMWA contracted with Jacobs engineering to evaluate mitigation options for SMWA and the feasibility of those options. The final draft of Jacob’s study was released in 2020. Among options presented by Jacobs are options to blend water with SMWA members’ current supplies, or to construct a desalination plant.
Since the release of Jacob’s study, the SMWA Board has had several discussions on these options and has asked that Jacobs further investigate options that are most feasible for the group. CRW staff will continue to provide updates to Town Council as more information becomes available.
Well PA-3
Well PA-3 is located adjacent to the University Tank on the west end of the Far Western Pipeline Segment where Denver Water will eventually have the ability to receive water through WISE infrastructure. To avoid stagnant water in the Far Western Pipeline Segment, this well has historically been operated at a fairly continuous rate of approximately 300 gallons per minute (gpm). However, water from this well is suspected to have elevated levels of iron and manganese and previous water quality mitigation strategies will no longer be feasible after the addition of SMWA’s Quebec Street Filter Plant. In late 2019, construction began on Well PA-3 to update water quality mitigation and construction was completed in 2020. SMWA members paid for one-third of the construction costs and utilized CIP funds previously contributed by SMWA members for WISE operations and maintenance.
Budget Impact
As described in the above sections, cost for the WISE project will be allocated from two accounts. The Other Professional Services account <211-4340-443.30-70> will be used to pay for charges associated with WISE water deliveries, and the CIP/ WISE Infrastructure account <211-4375- 443.77- 72> will be used to pay for costs associated with WISE Infrastructure. The funds carried forward from 2020 were utilized to pay quarterly fees to PWSD for costs associated with conveyance of CRW’s WISE water through their system.
Below is a summary of anticipated spending from each account with regard to the budget. Attachment G breaks out specific costs expected in 2021 and details applicable Project Codes.
|
|
(77-72_CIP) |
(77-30_Oth. Prof. Serv.) |
|
2020 Carryforward |
$ 64,991 |
$ - |
|
2021 Budget |
$ 3,913,942 |
$ 2,804,125 |
|
2021 Anticipated Spending |
$ 2,000,000 |
$ 2,804,125 |
|
Difference |
$ 1,978,933 |
$ - |
Attachments
Attachment A: CRW WISE Water Deliveries to Date
Attachment B: WISE Project CIP Table
Attachment C: History of WISE Prior to March 2020
Attachment D: Key Infrastructure Description
Attachment E: SMWA WISE Project Map
Attachment F: Aurora Water WISE Water Rate Change Letter
Attachment G: 2021 CRW WISE Budget Impact
Attachment H: 2021 WISE Project Update Summary Memo to Town Manager
Attachment I: SMWA 2021 Payment Summary