To: Honorable Mayor and Members of Town Council
Through: David L. Corliss, Town Manager
From: Mark Marlowe, P.E., Director of Castle Rock Water
Mark Henderson. P.E., Assistant Director of Castle Rock Water
Lauen Moore, Water Resources Manager
Title
Resolution Approving the Amended and Restated Intergovernmental Agreement for Water Service Between Dominion Water and Sanitation District, Acting in its Capacity as a Water Activity Enterprise and the Town of Castle Rock Acting Through the Town of Castle Rock Water Enterprise [Castle Rock Water’s distribution and transmission system inside the Town of Castle Rock to connection on the Northwest side of Town at the edge of unincorporated Douglas County, Colorado]
Body
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Executive Summary
Castle Rock Water (CRW) is seeking Town Council approval of a Resolution (Attachment A) amending and restating the 2016 Firming Service Water Service Intergovernmental Agreement (IGA) (see Exhibit 1) between Castle Rock and Dominion Water and Sanitation District (Dominion). The purpose for amending and restating this agreement is to clarify the mechanics and accounting and billing aspects of the agreement, improve the understanding of the implementation of the agreement between the parties, clarify how the 2014 IGA and this amended and restated Firming Service IGA work together, update the agreement to reflect the final resources that are the subject of the agreement, and revise and simplify the approach for Dominion to replace their non-renewable water supply over time.
The key purpose of this Firming Service IGA is to provide Dominion with a water supply to firm the first 700-acre feet (AF) of their WISE subscription (WISE 700). In exchange for this service, Dominion has provided a non-renewable water resource, paid and continues to pay system development fees to CRW, contributed funding to capital assets for CRW, and committed to replacing the non-renewable water resource over time with a renewable resource through funding to CRW.
Key aspects of the amended and restated IGA include:
• Creating consistency and clarity between the 2014 IGA and the Firming Service IGA in water accounting in accordance with an accounting spreadsheet that is an exhibit to the Firming Service IGA;
• Clarifying that billing and accounting will occur monthly and will be based on the WISE water year, with an annual reconciliation in July of each year.
• Formalizing the capacity limitations in the Firming Service IGA (0.685 million gallons per day capacity cap and 700 AF per year maximum firming).
• Restating the remaining system development fees to be paid by Dominion which account to $753,500 and the timeframe for payment (5 years)’
• Clarifying the rates associated with each type of water supply in the 2014 and Firming Service IGAs; and
• Creating a revised and simplified approach to replacement of the non-renewable water supply Dominion dedicated to CRW and attaching that replacement to the percent usage annually of the total allowed withdrawal (also known as the total legal supply available) from the non-renewable wells Dominion originally provided. The replacement calculation is based on CRW’s most current renewable Water Resources System Development Fee and includes a 25% surcharge.
The rate that Castle Rock will charge Dominion for Firming Service is $6.17 per 1,000 gallons under the current year’s rate. The calculation of the rate will continue to be updated on an annual basis. Dominion began taking deliveries under the 2014 IGA in May 2025 and utilized the Firming Service IGA in November 2025, when WISE was offline for annual maintenance activities.
Budget Impact
The Firming Service Agreement has positive impacts on the Water Resources budget by providing several revenue streams as noted in the Discussion section.
Staff Recommendation
Staff recommends Town Council approve the amended and restated Firming Service IGA.
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
Attachment A: Resolution
Exhibit 1: Amended and Restated IGA
Attachment B: Map of Dominion Connections