To: Honorable Mayor and Members of Town Council
From: Mark Marlowe, P.E., Director of Castle Rock Water
Matt Benak, P.E., Water Resources Program Manager
Lauren Tyner, Water Resources Program Analyst
Title
Resolution Approving the Execution of the Water Infrastructure Design and Construction Cost Sharing Intergovernmental Agreement between the Town of Castle Rock and Dominion Water and Sanitation District (Plum Creek Raw Water Return Pipeline / Eastern Regional Pipeline Project)
Body
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Executive Summary
An important component of Castle Rock’s long term water plan is to have the ability to capture our reusable water and return this source back to Town for treatment. A key component to return this water is a new raw water pipeline from the recently acquired Plum Creek Diversion property back to our Plum Creek Water Purification Facility (PCWPF). The corridor planned for this pipeline is the same corridor that Dominion Water and Sanitation District (Dominion) plans to use for their Eastern Regional Pipeline Project to convey their WISE water and other finished supplies. Given this fact, the Town and Dominion believe that a design and construction cost sharing agreement would provide economic benefit to both parties.
The purpose of this memorandum is to request Town Council approval of a Resolution (see Attachment A) approving the execution of the Water Infrastructure Design and Construction Cost Sharing Intergovernmental Agreement between the Town of Castle Rock and Dominion Water and Sanitation District for the Plum Creek Raw Water Return Pipeline / Eastern Regional Pipeline Project (IGA) (see Exhibit 1).
The design and construction of this infrastructure is being managed by Dominion. Upon completion of the project, the Town will have sole ownership of CR Water infrastructure and ability to maintain, repair, replace and expand the CR Water Infrastructure. The major benefit of this agreement is cost savings in construction.
Staff and Castle Rock Water Commission have reviewed the benefits of this IGA and both parties recommend that Council approve this agreement.
Key terms of the IGA are as follows:
• Dominion will be responsible for design and construction of the Plum Creek Raw Water Return Pipeline (CR Water Infrastructure) and the Eastern Regional Pipeline (Dominion Infrastructure), as well as obtaining all easements and rights-of-way necessary for the design, construction, and installation of these projects. Adequate easement rights for our pipeline will be assigned to Castle Rock before the construction begins.
• Dominion is responsible for competitively bidding for the construction of the project and entering into a guaranteed maximum price (“GMP”) contract. Dominion will pay all project costs subject to the Town’s contribution of its’ proportionate share and seek to have project completion prior to the end of 2019. Castle Rock Water’s share of the project costs will be placed into an escrow account for the construction. If for some reason Dominion’s construction contract goes into default before project completion, Castle Rock Water’s remaining funds will be returned to the Town.
• Upon execution of this IGA, the Town will pay Dominion $680,308 which represents the Town’s proportionate share (34.6%) of the Phase 1 project design and $411,770, which represents the Phase 2 project design costs.
• Within ten days after the effective date that Dominion has approved the GMP, the Town will deposit the remaining estimated project costs. At project completion, final costs will be settled and the Town will be responsible for the Town’s proportionate share. This may include a refund to the Town if project costs are less than the GMP.
• Upon completion of design, construction, and installation of the Projects, Dominion shall be the sole owner of the Dominion Infrastructure and the Town shall be the sole owner of the CR Water Infrastructure. Dominion shall assign to the Town interests in the Project easements sufficient to allow Castle Rock Water the ability to maintain, repair, replace and expand the CR Water Infrastructure.
• This planned partnership with Dominion provides real benefits to Castle Rock Water’s customers in terms of reduced infrastructure costs. It is important to note that without Dominion, Castle Rock would have to carry the infrastructure costs for part of this regional infrastructure alone.
History of Past Town Council, Boards & Commissions, or Other Discussions
On April 16, 2018, the Town and Dominion attended a Location and Extents hearing before the Douglas County Planning Commissioners. The Commissioners unanimously approved the location and extents submittal by the Town and Dominion.
On April 25, 2018, the Castle Rock Water Commission unanimously recommended that Council approve the agreement.
Discussion
Dominion is a wholesale water district located in northwest Douglas County, and provides water and wastewater service to the Sterling Ranch planned development and, will potentially provide this service to other nearby special districts that may request water in the future. Sterling Ranch is a 3,450-acre planned community which will build out to approximately 12,000 residential units located in northwest Douglas County. It has a planned build-out water demand of approximately 4,800 acre-feet.
Now with the completion of WISE infrastructure connections to the Town, an additional pipeline must be constructed for Dominion to receive their WISE water supplies that will be wheeled through CR Water’s system. This new pipeline will start near Highway 85 and Promenade Parkway and continue to the northwest along the Highway 85 corridor for approximately 11 miles to Sterling Ranch. Just beyond Sedalia, the pipeline is planned to parallel the Town’s recently acquired Ravenna pipeline. Given the proximity and timing of Dominion’s pipeline (known as the Eastern Regional Pipeline) project (ERPP), the Town and Dominion believe that a cost sharing partnership for the design, easement acquisition and construction of both the Town’s raw water return pipeline and the ERPP is beneficial.
Through this IGA, Dominion’s design/build team will be responsible for design and construction of these pipelines. Upon completion of construction and installation of the Project, Dominion shall be the sole owner of the Dominion Infrastructure and Castle Rock Water shall be the sole owner of the CRW Infrastructure and Dominion shall assign to Castle Rock Water interests in the Project easements sufficient to allow CRW the ability to maintain, repair, replace and expand the CRW Infrastructure.
Dominion used a qualifications-based selection process to determine what design-build team to hire. Some of the major selection criteria included:
• Approach for and experience/success in obtaining licenses for railroad and highway crossings, and encroachments in open space and environmentally sensitive areas;
• Experience in pipeline design and construction in Douglas County and approach for working with multiple entities (such as WISE participants);
• Experience with progressive Design-Build project implementation and a willingness to engage with multiple stakeholders;
• Willingness to negotiate and be flexible with cost approach for various phases of design and construction.
Some of the specific project challenges include:
• A difficult alignment within a 6 mile stretch between Castle Rock and just west of Sedalia. This alignment includes crossing of Union Pacific (UPRR) and Burlington Northern-Santa Fe (BNSF) railroads, U.S. Highway 85, crossing of East Plum Creek, Indian Creek, Lehigh Gulch and several other drainages.
• A tight alignment at several locations including an encroachment on railroad property.
• Alignment across properties with conservation easements.
• Negotiation with a significant number of property owners and coordination with multiple entities including Castle Rock Development Company, Douglas County Land Conservancy, CDOT, UPRR, BNSF, the Town of Sedalia and others.
There are several benefits to the Town entering into this IGA with Dominion:
1. By partnering with Dominion, this provides the Town significant savings on infrastructure and design costs through economies of scale. This also alleviates the need to prepare and execute two separate contracts with teams working in the same corridor.
2. Infrastructure that connects Castle Rock and Dominion could open opportunities for mutual benefit in sharing costs of new water supplies, additional treatment, and future pipelines and diversions.
3. Infrastructure that connects the Plum Creek Diversion and Castle Rock Reservoir No. 1 to the Plum Creek Water Purification Facility provides the town with additional renewable water, supporting expansion of plant capacity and advanced treatment options.
4. This agreement continues our partnership with Dominion on the infrastructure for the WISE project.
To select the design/build (D/B) team, Dominion received Statements of Qualifications (SOQ) on July 31, 2017 from three teams (Garney Construction/Dewberry; Burns & McDonnell/T. Lowell Construction; Reynolds Construction/Providence Infrastructure Consultants). These teams then submitted proposals in November 2017 for the project. The project selection committee consisted of two Dominion board members and three staff members who held interviews with the D/B teams between November 17-20, 2017. Based on the proposals and interviews, the committee recommended that contract negotiations be initiated with the Reynolds/Providence team and ultimately, the Reynolds/Providence team was selected.
This agreement will continue our close partnership with Dominion. Attachment C provides a summary of the other agreements and partnerships that Castle Rock Water has with Dominion. This list clearly relates the benefits that this continuing partnership has already provided to the Town.
Budget Impact
The Dominion Pipeline IGA will impact the Town’s Capital Improvement Project budget. The 2018 CIP budget currently has $18,602,000 remaining. The initial estimated project cost for the Town’s responsibility in support of this IGA is $1,092,078 in design costs and an estimated $15,187,850 in construction costs. Funds for the design portion of the project will be deducted from account number 211-4375-443.77-54 (Water Resources Fund - Plum Creek Diversion Structure) at the time the agreement is fully executed. Construction funds will come due when the final GMP is available (estimated early July 2018).
As construction costs by the D/B team are finalized later this year and when the GMP is set, staff will provide an update to Town Council.
Recommendations
Staff and Castle Rock Water Commission recommend that the Water Infrastructure Design and Construction Cost Sharing Intergovernmental Agreement between the Town of Castle Rock and Dominion Water and Sanitation District for the Plum Creek Raw Water Return Pipeline / Eastern Regional Pipeline Project be approved.
Proposed Motion
“I move to approve the Resolution as introduced by title.”
Attachments
Attachment A: Resolution
Exhibit 1: Agreement
Attachment B: Location map
Attachment C: Partnership Benefit Matrix