To: Members of the Castle Rock Water Commission
From: Mark Marlowe, P.E., Director of Castle Rock Water
Greg Kropkowski, Business Solutions Manager
Title
2022 Rates & Fees Study Deliverables
Town Council Agenda Date: NA
Body
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Executive Summary
As part of the annual rates and fees study, Castle Rock Water staff gathers several pieces of information to input into the four enterprise models for calculating rates, system development fees and cost of service. Throughout the study, staff will bring to Commission some of those inputs and deliverables used for this process.
2023 Business Cases Summary (Attachment A)
Every year, Castle Rock’s supervisors and managers review the staffing and equipment needs for their various divisions to determine if business cases should be prepared for additional personnel and/or equipment. If needs are identified, business cases are prepared to evaluate the financial, strategic, safety, level of service and other aspects of the need. The business cases are then submitted to the leadership team for review in light of the various priorities and budget constraints for the organization. As part of this review, leadership team reviews the long term staffing plan for possible changes. The long term staffing plan provides an estimate of staff needs out to the year 2065.
For 2023, a total of $313,679 in additional staff resources are being requested as well as equipment in an amount of $84,800. The staff resources will create an annual cost that will increase by approximately 5 percent going forward. The requested equipment costs will be single year expenditures with ongoing maintenance and future replacement costs. For the staff resources, three new full time equivalents (FTEs) are being requested for the 2023 budget. The three new FTEs include a Stormwater Inspector, a Water Efficiency Technician and a SCADA Instrumentation Technician.
A new Stormwater Inspector is needed as the division is responsible for implementing the TESC Permit program as part of the Phase II MS4 Permit governed by the State Water Quality Control Division (WQCD). The purpose of the TESC program is to minimize and/or eliminate the release of sediment from construction sites.
In 2016, the Town was issued a new MS4 Permit from the state which introduced new inspection requirements under the TESC program. This required significant changes in the structure of our program to maintain compliance including the new Vertical TESC Permit for residential construction.
This major change has increased overall site compliance, decreased resource use and time spent driving and established full compliance with State inspection frequencies. Even with these changes, there has been a 63% increase in the total acreage of active construction sites, a 27% increase in residential building permits and a 30% increase in the total number of active TESC permits from 2019 to 2021. Given this rise in workload, it has become increasingly more difficult to maintain service levels on active construction sites with current staffing.
A business case has also been submitted for a one-time cost of Stormwater Inspector vehicle in the amount of $48,800 for 2023 to allow the inspector to carry out duties as described above.
A new Water Efficiency Technician is needed to support of the landscaping and irrigation inspection program which includes pre-construction meetings with installation contractors, soil inspections, and landscaping/irrigation inspections. This work has mostly been completed by seasonal staff, with backup provided by existing full time staff as needed. Historically, recruiting and retaining qualified individuals to fill this seasonal position has been challenging.
As Castle Rock Water’s service area continues to rapidly grow, additional water conservation staff are needed to keep up with increased demands to support the various conservation initiatives and continue our level of service. This position will help Castle Rock Water achieve its goal of 100 gallons per capita per day usage by 2050.
The addition of this position will allow water conservation staff the ability to maintain and expand the level of service. This position will help to assist our largest water users achieve conservation goals, identify irrigation deficiencies, and recommend improvements. Furthermore, this position will provide the ability to follow through with customers when data indicates the presence of excess water consumption. Annual expenditures for a seasonal Landscape and Irrigation Inspector will be reduced by approximately $26,000. Also, permit fees for residential and non-residential inspections (and re-inspections) have been $15,950; $64,176; and $135,346 in 2019, 2020 and 2021, respectively.
A SCADA Instrumentation Technician is needed to assist with the development and implementation of the SCADA Master plan, in order to prevent physical and cyber threats to the SCADA System. This FTE will also assist with maintaining current service levels for forecasted growth and additional SCADA needs at new Castle Rock Water Facilities. The FTE is requested with the understanding that increased operation and maintenance requirements would fall to the SCADA Division and that cybersecurity demands for the operational technology (OT) would increase for CR Water in order to remain secure and free from worldwide threats. The additional FTE is consistent with the implementation of the 2020 SCADA Master Plan. Staffing in the SCADA division needs to be enhanced to properly operate and maintain the upgraded system ($12M in expanded equipment, OT, and instrumentation). This addition would provide the group with consistent, safety oriented, trained and reliable support; negating the need to request staff assistance from other teams or departments. Further, the additional FTE will allow the team to assume the increasing maintenance responsibilities for the Town’s SCADA system and give the team the ability to perform the necessary preventive maintenance on instruments and equipment, reducing the need for reactive maintenance and emergency repairs.
A business case has also been submitted for a one-time cost of SCADA technician vehicle in the amount of $42,000 for 2023 to allow the technician to carry out duties as described above.
Capital Implementation Plan (CIP) by Enterprise Fund (Attachment B)
A large piece of the annual rates and fees study is updating capital project costs and timing to ensure the most current and up-to-date information gets input into the models. The capital plan forecasts costs through 2065 taking into consideration the timing of projects as well as inflation factors. Each capital project then receives a priority rating as follows:
Priority 1: Capital projects urgent in nature, timing is critical or dependent on another project.
Priority 2: Capital projects not as urgent in nature, timing of construction is more flexible.
Priority 3: Capital projects eliminated with little or no consequences to the future of Castle Rock Water.
Attachment B shows the individual capital projects requested as part of the 2022 Rates and Fees Study as compared to those requested in the 2021 Rates and Fees Study for the current five year planning periods.
For the Water Fund, the highest priority capital projects for 2023 include:
• Investments in Bell Mountain Ranch water system including re-drilling of a well, upgrades to the treatment plant, a raw water pipeline to better use existing wells CRW owns in the area.
• Investments in new deep groundwater wells and rehab of existing wells
• Targeted rehabilitation and replacement of aging water mains with Preswick Way being the focus.
• Construction of a new drainage path for the maintenance of Tanks 17
• Demolition of our existing Tank 6B
• Continued implementation of the Supervisory Control and Data Acquisition (SCADA) system master plan with specific projects to ensure all systems are up to date and able to continue to manage our increased infrastructure and needs
For the Water Resources Fund, the highest priority capital projects for 2023 include:
• Investments in additional storage including finalization of design and commencement of construction for Castle Rock Reservoir Number 2 project and additional Chatfield Reservoir storage purchases
• Commencement of construction of the Plum Creek to Rueter Hess Reservoir pipeline which will allow reusable water to be moved from the Plum Creek basin into Rueter Hess Reservoir
• Continued implementation of the WISE project with commencement of construction of the Parker Mid-Section Pipeline
• Purchase of additional key water rights in the Plum Creek Basin, Cherry Creek Basin and for the Box Elder project
For the Stormwater Fund, the focus for capital investment in 2023 will be:
• Construction of McMurdo Gulch Priority 3 Improvements
• Construction of Gambel Ridge Tributary Improvements in conjunction with the Crystal Valley Interchange Project
• Rehabilitation of Storm Sewer in advance of street rehabilitation efforts
• Updating Drainageway Master Plans
For the Wastewater fund, the focus will continue to be rehabilitation and replacement of wastewater collection infrastructure and existing assets operated by Plum Creek Water Reclamation Authority.
Staff will use these CIP projections along with their priority ratings defined above to develop proposed changes to the 2022 Rates and Fees Study. Every few years we increase the planning period, and this year we have the forecast end year at 2065.
2021 Preliminary Fund Balances (Attachment C)
Throughout the year CRW staff reviews each enterprise fund to ensure that expenses do not exceed revenues. Attached you will find the historical fund balances, the 2021 preliminary fund balances, forecasted 2021 fund balances and the projected fund balances for 2022-2026.
Attachments:
Attachment A: 2022 Business Cases
Attachment B: CIP Summary by Enterprise Fund
Attachment C: Fund Balances