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, Assistant Director
Title
Resolution of Town of Castle Rock Authorizing the Plum Creek Water Reclamation Authority (PCWRA) to Enter into a Loan Agreement, Construction Contract, and Construction Management Services Contract for the PCWRA Reuse Reservoir and Pump Station [4255 N US Highway 85, Castle Rock CO]
Body
________________________________________________________________________________
Executive Summary
Castle Rock Water (CRW) is seeking Town Council approval of a resolution (Attachment A) approving Plum Creek Water Reclamation Authority (PCWRA) to proceed with a loan agreement with the Colorado Water Resources and Power Development Authority (CWRPDA) to fund a portion of the improvements to the PCWRA Reuse Reservoir and Pump Station; a construction contract with GSE Construction Company Inc.; and a construction management services agreement with GEI Consultants to complete the construction of the project. Town Council approved a resolution on September 2nd for the Intergovernmental Agreement (IGA) with PCWRA, Castle Pines Metropolitan District and Castle Pines North Metropolitan District including the financing for the project through a CWRPDA loan and sharing of the costs for the project. This resolution is to allow PCWRA to move forward to secure the loan and begin construction of the project. PCWRA will enter into a $3.5 million loan agreement with a term of 30 years at a 3.5% interest rate. The Town of Castle Rock, Castle Pines Metropolitan District, and Castle Pines North Metropolitan District (collectively, the “Members”) voted unanimously to approve the loan, enter into a construction contract for $7,634,700 with GSE Construction Company Inc., and approve a construction management services agreement with GEI Consultants for $600,680. Also, the members voted unanimously to self-fund the remaining portion of the project according to their proportional share of the project while continuing to pursue additional funding opportunities through CWRPDA and other sources if available.
Budget Impact
The cost share outlined in the IGA for the Town is 25% with a maximum principal loan amount of $8.5M which would commit the Town to up to $2.1M in loan principal. However, as a result of the approval of the GSE bid of $7,634,700 and the GEI construction management services contract of $600,680, the Town’s proportional share would be $2,058,845. CRW modeled multiple scenarios to fund the Town’s proportional share and determined the best approach would be to participate in the $3.5M CWRPDA loan and self-fund the remaining portion of the full project. This allows the Town to take advantage of the favorable interest rate through CWRPDA, while minimizing overall interest costs due to taking a larger loan. The Town’s total cost over 30-years for the CWRPDA loan will be $1.41 M, and the remaining portion to be self-funded will be $1.18M. There is adequate budget to cover the self-funded portion as CRW has included $2M in the 2026 Wastewater CIP budget to be able to cash fund the Town’s share of the project. Ultimately, CRW will add a capital recovery fee to the water service charges assessed to Red Hawk Ridge Golf course to recover the costs of the capital investment in PCWRA’s reuse system improvements.
Staff Recommendation
Staff recommends Town Council approval of the Resolution Approving PCWRA to enter into a loan agreement with the Colorado Water Resources and Power Development Authority, a construction contract with GSE Construction Company Inc., and construction management services contract with GEI Consultants for the PCWRA Reuse Reservoir.
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