To: Members of the Castle Rock Water Commission
From: Mark Marlowe, P.E., Director of Castle Rock Water
Title
CIP Project Update 2018 Rates and Fees Study
Body
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Executive Summary
Castle Rock Water (CRW) staff wanted to present an update to the possible Capital Improvement Plan (CIP) for the 2018 Rates and Fees study and discuss the impact that this may have on the rates and fees for 2019.
The CRW process for updating the CIP is to update cost estimates for currently planned and ongoing projects, first. Then any projects that were previously planned that are no longer needed or relevant are removed. New newly identified projects are added to the plan. Once all currently planned and newly added projects have been identified, costs estimates are created and updated as appropriate and the split of funding sources is updated or identified (i.e. rates from existing customers or fees from development/new growth).
The team then provides each project with a priority rating from 1 to 3. Ratings are defined as follows:
1. Priority 1 are projects that essential to the plan and must be completed.
2. Priority 2 are the projects that are important to the plan, but could possibly be pushed out to later years or possibly could be removed from the plan. They are not as important as the priority 1 projects.
3. Priority 3 are the projects that are wish list items that are not needed and can be removed with little or no consequences to the future of CRW. These are the first projects to be removed from the plan if reductions are needed.
Staff has taken the first round CIP plans and completed an analysis of the 2017 study plans versus the plans for this 2018 study. This includes a comparison of the five year CIP plan, which has the most immediate impact on the rates and fees. This overall relates to a 5 year CIP increase of $48.57M. Also compared were the differences between the full plans that go out till 2055, which results in an increase of $69.21M. These differences are shown in the table below.
Within this comparison staff looked at the individual projects and determined which ones are affecting these changes the most. Some of the key findings from these comparisons are:
1. In water resources there was a $15.9M increase in the 5 year plan for the expansion of the PCWPF to match the projected costs needed to upgrade, which is primarily a growth related function.
2. In water resources a $2.25M increase was accounted for in total costs in the 5 year plan for the Raw Water Pipeline from the Diversion to PCWPF, which is primarily growth related.
3. Also in water resources a $5M increase in the 5 year plan and a $25M total increase over total plan for the WISE Option Agreement, which is growth related.
4. Water resources took out $30M for the Raw Water Pipeline from the South Platte to Box Elder, which helps to offset some of the other increased development costs.
5. Water resources also has some low ranked priority projects that are causing large differences in the CIP plans from last year’s study. These projects include $6.5M for Castle Rock Reservoir #1, $11.3 for Castle Rock Reservoir #2, $11.78M for the Chatfield Raw Pipeline and Pump Station, $6.08M for the Ravenna Pipeline Modifications, $5M for the PV Pipeline to the Prospect Reservoir and $9.6M for the WISE Local Infrastructure with Parker. All of these are significant increases to the development fees.
6. Water, stormwater and wastewater have no significant impacts to their plans or to individual projects.
Of the projects in the CIP, 55% are priority 1 projects, 25% are priority 2 projects and 20% are priority 3 projects. The split between existing customer rates and development fees is approximately 49% vs. 51%. The detailed projects list for each enterprise is included as Attachment A.
These increases in the CIP plan can result in an overall increase in both rates and fees for our customers and with the developers. Staff will use these initial CIP projections with their priority ratings in the models to develop proposed changes to the rates and fees for 2018 and our updated study.
Attachments
Attachment A: Detailed CIP Project Lists