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File #: RES 2019-109    Version: 1 Name:
Type: Resolution Status: Passed
File created: 10/2/2019 In control: Town Council
On agenda: 10/15/2019 Final action: 10/15/2019
Title: Resolution Approving a Construction Contract with Hydro Resources - Rocky Mountain Inc. for Wells CR-27R and CR-231
Attachments: 1. Attachment A : Resolution 27R 231 Hydro Construction Contract, 2. Exhibit 1: Hydro Construction Contract 27R 231, 3. Attachment B: Location Map, 4. Sole Source_HydroResources_100119 approved final, 5. Presentation

To:                     Honorable Mayor and Members of Town Council


From:                       Mark Marlowe, P.E., Director of Castle Rock Water                     

                      Matt Benak, P.E. Water Resources Manager

                      Heather Justus, P.G., Water Resources Project Manager



Resolution Approving a Construction Contract with Hydro Resources - Rocky Mountain Inc. for Wells CR-27R and CR-231




Executive Summary

The purpose of this memorandum is to request Town Council’s approval of a Resolution (see Attachment A) approving a construction agreement with Hydro Resources - Rocky Mountain, Inc. (Hydro) for the construction, including drilling, completion, testing and pumping equipment installation for Wells CR-27R and CR-231 located in the Meadows.  The contract is for the construction of two new Arapahoe Aquifer wells that will supply raw water to the Meadows Water Treatment Plant.  The wells will help firm new supplies from the existing Denver Basin aquifers, and they are needed ahead of next year’s irrigation season. 


Since there are limited well drilling companies available currently in the area and a large amount of demand for their services, Castle Rock Water staff met with Hydro, who has been working for the Town, to determine if their schedule could accommodate the drilling of 27R and 231 starting in November 2019.  Starting in November is critical to completing the wells ahead of next year’s irrigation season.  Bidding the project would prevent meeting this schedule.  From a resident standpoint, it is also preferable to do the drilling in the winter to mitigate noise issues.  Through the bidding of Wells 15R and 16R, drilling of CR-227 and the Lanterns project, staff has determined that Hydro’s prices are competitive.  Hydro has completed recent projects under budget and ahead of schedule.  Staff recommends approving a construction services agreement based on the qualified proposal from Hydro Resources - Rocky Mountain Inc. in the amount of $3,505,877.00.  In addition, Castle Rock Water staff requests a 10% Town-managed contingency in the amount of $350,587.00 for a total authorization of $3,856,465.00.  The Construction Agreement is included as Exhibit 1 to the Resolution.  The raw water facility and infrastructure design and construction packages will be determined at a later date.



History of Past Town Council, Boards & Commissions, or Other Discussions


This item was discussed with the CR Water Commission on 9/25/19.  While the full memo packet was not available at that time, the Commission was generally supportive of the approach to the project



Based on the Water Resources Supply Demand Model, high population growth trend, and aging infrastructure, replacement of failing wells is necessary to keep pace with meeting our customers’ water demands.  The original well CR-27 was constructed in 1987 and was active through 2010.  CR-27R will replace CR-27 and will be drilled on the same parcel.  Well-231 will be replacing Well CR-49; however, the parcel on which CR-49 is located is not a viable option for drilling.  CR-231 will be located on the same parcel as Well-149.  Well CR-49 was constructed in 1994.  In 2003, the original motor, pump and at least two strings of drop pipe fell to the bottom of the well. All attempts to remove the pumping equipment failed.  Since then, the well has been producing sand, and staff is unable to rehabilitate the well.  However, there is currently pumping equipment installed above the lost section and some reduced water production can be achieved.  The plan is to keep using the well until it is no longer a viable option.  In the meantime, CR Water plans to drill CR-231, which should be able to achieve good production from the Arapahoe Aquifer.  Attachment B is a map of the well locations.  The project will include the drilling, completion, testing and pumping equipment installation of the two new Arapahoe Aquifer wells.  Staff anticipates that the wells will each produce 300 to 350 gallons per minute (gpm) or approximately a total of 0.8 to 1.0 million gallons per day (mgd).


Upon direction from Castle Rock Water leadership that we need to continue to move forward in firming Denver Basin Water supplies, staff met with Hydro to determine schedule availability and timing.  Based upon this meeting, previous bidding information, and the desire to drill the wells during the fall/winter months, staff determined that sole sourcing (see Attachment C) the drilling construction contract would be in the Town’s best interest.  Based on other water districts along the Front Range Corridor and Hydro, we have learned that multiple entities are planning to drill new wells and we do not want to have to potentially delay the drilling project due to the unavailability of the drilling contractor.  Hydro has availability to begin construction as early as the end of October 2019.  Staff worked with Leonard Rice Engineers, Inc. to prepare site-specific well designs based on the locations in the aquifers for each well.  In addition, the well specifications were updated and refined to reflect changes in designs and lessons learned from previous projects.      


The new well design includes using stainless steel casing and maximizing the screen intervals below the static water table and using stainless steel drop pipe in the pumping equipment.  Using stainless steel increases the longevity and efficiency of the wells.  Over the last few well rehabilitation projects, through the pre-cleaning videos and the condition of the drop pipe, staff has noted increased corrosion on the casing and the drop pipes due to the introduction of oxygen into the wells.  In addition to reducing corrosion, the growth of iron bacteria will slow down with the reduction of an iron source, which could potentially reduce the overall costs of rehabilitation of the wells and will increase the life of the well.


Hydro’s proposal addressed the full scope of work and alternative scope items, and staff believes the proposal amount to be a good value to the Town based on previous similar scopes of work.  In addition, staff completed a detailed line item comparison of the Lantern’s Well proposal to the CR-27R and CR-231 proposal and to Well CR-227.  All of the wells are Arapahoe aquifer wells. The following Table is a summary of the line item comparison of the Lantern’s Wells proposal for the Arapahoe Well (CR-228) and CR-27R and CR-231.





CR-228 Actual Costs

CR-227 Actual Costs

Base Proposal





Alternative Items










Overall Percent Difference from CR-228





Overall Percent Difference from CR-227






When reviewing each line item in the proposals, there are some increases in specific line items due to increased fuel cost and increased labor costs.  However, these increases are within acceptable ranges for fuel and labor cost increases. Wholesale diesel prices can vary up to 20% and we can expect labor costs to increase 3 to 5 percent per year.  In addition, the scope of work for CR-27R includes removing the existing pumping equipment from Well 27 and abandoning the existing well, which adds an additional $44,200 to the scope for CR-27R.   The new wells also incorporate the new design changes such as stainless steel, glass beads, and advanced development techniques.  CR-227 did not have these new design elements incorporated into its construction.  The CR-27R and CR-231 proposal does include a mitigation design for the risks associated with Dawson aquifer caving and lost circulation issues that could be encountered.  Even with the design changes, overall costs for the wells are lower than CR-228 as shown in the above table.  Wells CR-27R and CR-231 are approximately 8% shallower than CR-228, which explains some of the reasons the wells are lower in cost. 


The construction, which includes the drilling, completion, testing and installation of pumping equipment for the wells is planned to start in late October and is expected to continue through end of March 2020.  The drilling, completion and development activities for both wells will occur back to back with CR-27R drilling starting first.  Once CR-27R is completed then Hydro will mobilize to CR-231 and start drilling in that location mid-December or January depending on the Christmas and New Year Holiday.  Testing for CR-27R will start January with the installation of the new pumping equipment occurring in February.  Testing for CR-231 will occur in February with the installation of the new pumping equipment occurring in March.  There are some slight modifications to the facilities at Well CR-27R and some significant changes and design elements for the CR-231 facilities.  We have not determined how we are going to address the facilities design at this point but that will be decided by the end of October. 


Additional background on the total estimated cost of the project is provided in the table below.


Consultant/ Contractor

Proposed Budget^ or Staff Estimated Budget*

Leonard Rice Engineers, Inc.


Hydro Resources, Rocky Mountain Inc.


Facility Design Consultant


Facility Contractor


Estimated Total Cost


^ = Proposed Budget

* = Staff Estimated Budget


Public Outreach  


CR Water staff will hold an open house for Meadows residents to discuss the project with a tentative date of October 22nd.  Notification letters will also be sent to the residents near the two well sites prior to commencing drilling activities.  In addition, the project information will be posted on the Town’s Development Activity map as one of the Water Projects.  Construction project signs will be put in place that will have updated project information posted on the sign.


Budget Impact

The funding for the construction contract will come from CIP Account 210-4275-442.76-53 (Well Redrills), which has a current balance of $3,271,876.41. Staff will complete a budget transfer from CIP Account 210-4275-442.75-39 (New Water Supply Well) for $689,049.29, which has a current balance of $3,389,789.98.  The budget transfer will also include the funds needed for Leonard Rice Engineers, Inc.  The Town will use these funds for the construction, which includes drilling, completion, testing and installation of pumping equipment of this project.  The Hydro proposal fee is $3,505,877.00  Staff requests a Town-managed contingency in the amount of $350,588 for a total authorization of $3,856,465.


Project                                    Amount                  Contingency               Total Amount

210-4275-442.76-53           $3,505,877.00              $350,588.00                $3,856,465.00

Well Redrill



Staff Recommendation


Staff recommends Council’s approval of the construction agreement between the Town of Castle Rock and Hydro Resources - Rocky Mountain, Inc. for the drilling, completion, testing and installation of pumping equipment for the construction of Wells CR-27R and CR-231 in the amount of $3,505,877.00 plus a 10% Town managed contingency of $350,588.00 for a total authorization of $3,856,465.00.



Proposed Motion


“I move to approve the Resolution as introduced by title.”




Attachment A:   Resolution

Exhibit 1:           Construction Contract

Attachment B:    Location Map

Attachment C:    Sole Source