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File #: RES 2019-130    Version: 1 Name:
Type: Resolution Status: Passed
File created: 10/10/2019 In control: Town Council
On agenda: 12/17/2019 Final action: 12/17/2019
Title: Resolution Approving a Construction Contract with Hydro Resources - Rocky Mountain Inc. for Wells CR-232 and CR-233
Attachments: 1. Attachment A: Reso 232 233 Hydro Construction Contract, 2. Exhibit 1: Hydro Construction Contract 232 233 Drilling, 3. Attachment B: Location Maps, 4. Attachment C: Sole Source Hydro 232 and 233 Construction Contract, 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-232 and CR-233




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, and testing for Wells CR-232 and CR-233 located at the Ray Waterman Water Treatment Plant (RWWTP).  Attachment B is a map of the well locations. The drives and pumping equipment installation will be under a separate contract as staff requires additional time to complete the specifications for the aquifer storage recovery and downhole power generation systems.  The contract is for the construction of two new wells, one Arapahoe Aquifer well and one Denver Aquifer well that will supply raw water to the RWWTP and have the capability for aquifer storage and recovery (ASR) and downhole power generation.  The wells will add new water capacity from the existing Denver Basin aquifers, store excess WISE supplies (when available) and generate power during ASR operations. 


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 ASR wells CR - 232 and CR - 233 starting in early 2020.  Hydro has been cost effective and met our tight schedules. CRW’s goal is to have these two wells available on a temporary basis as emergency supply for portions of the 2020 irrigation season.  Because there has been substantial growth and the reuse water supply will not be available until late 2020, these wells could be needed to meet peak demands in 2020 and/or backfill any major well facility failures.  These wells are being funded by growth related fees as they are needed to keep pace with growth. 


Starting in early 2020 is critical to completing the wells in a timely manner.  The drilling portion of the project also includes design elements that are unique to ASR wells.  From a resident standpoint, it is also preferable to do the drilling in the winter to mitigate noise issues.  Through the bidding and drilling, of Wells CR-15R and CR-16R, drilling of CR-227, the Lanterns well project, and recent Meadow’s drilling 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 $2,931,416.  In addition, Castle Rock Water staff request a 10% Town-managed contingency in the amount of $293,142 for a total authorization of $3,224,558.  The Construction Agreement is included as Exhibit 1 to the Resolution.  The pumping, ASR and downhole generation equipment packages will be under a separate contract with Hydro.  In addition, the raw water facility and infrastructure design and construction packages will be determined at a later date.



Notification and Outreach Efforts


CR Water staff will hold an open house for residents to discuss the project with the date and location to be determined.  Notification letters will also be sent to the residents near the 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.



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


Castle Rock Water Commission was provided an update at the December 11, 2019 meeting and the Commission unanimously recommended approval of the resolution by Town Council.




Based on the Water Resources Supply Demand Model, high population growth trend, aging infrastructure, and the need for ASR near RWWTP, it is necessary to keep pace with meeting our customers’ water demands.  With the variability of WISE deliveries, a storage option is needed when WISE supply is higher than demand.  One of the solutions is ASR, which is the ability to store water in the aquifer and recover the water through pumping when needed.  The design of an ASR well is slightly modified to take into consideration the water that will be delivered into the aquifer through the well which will cause the water level in the well to increase.  The project will include the drilling, completion, and testing of one Arapahoe and one Denver Aquifer well.  Staff anticipates that the Arapahoe Aquifer well will produce 500 to 600 gallons per minute (gpm) and the Denver Aquifer well will produce 300 to 350 gpm, or approximately a total of 1.0 to 1.2 million gallons per day (mgd).


Town Council approved the Water Service Intergovernmental Agreement (IGA) with Dominion Water and Sanitation District (Dominion) on September 20, 2016 for shared use of infrastructure.  As part of the Water Service IGA, Dominion reimbursed the Town for all costs associated with the design and construction of the Castlewood Ranch Well Facility infrastructure and will pay the costs associated with the ASR equipment for the two wells contemplated herein as part of the Infrastructure Fee. 


Upon direction from Castle Rock Water leadership that we need to continue to move forward on this project, 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 January 2020.  Staff worked with Leonard Rice Engineers, Inc. to prepare site-specific well designs based on the locations in the aquifers for each well and for ASR.  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.  For ASR, additional stainless steel casing needs to be added to the casing string to take into account the recharging of water into the well and raising the water level.  The increase in the blank stainless steel casing is an additional 735 feet with unit price difference of $184 per linear ft.  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 wells.


Hydro also proposed partnering in piloting their new ASR downhole power generation valve.  In 2018, Hydro invited staff to Colorado State University (CSU) to witness some of the benchmark testing completed.  Since then Hydro has been working on improving the design of the valve and the variable frequency drive.  At this time, Staff is proposing collaborating with Hydro and their team on pilot testing their proprietary ASR downhole power generation valve.  To our knowledge, this type of pilot project is novel and Hydro has advanced the technologies to a point that it is time to move the testing outside of benchmarking and laboratory to real world applications.  In participating in the pilot program, Castle Rock would become a leader in advancing green energy technologies in the attempt to prove the technologies beyond bench testing and the theoretical.  In the white paper provided by Hydro, Dr. Sale of CSU theorizes the following: “Using the results..., the following solution and example calculation is advanced for estimating power generation from a flow rate (Q) and total dynamic head (TDH) data.  The result suggests that a single ASR well, equipped with the study pump, with a flow of 500 gpm, and a TDH of 1000 feet, would generate 48kW of electrical power, enough electrical power for approximately 50 homes.” 


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 items included in this scope of work and the most recent approved contract for Well CR-27R.  The total depth of CR-233, which is the Denver Aquifer well, is similar to the depth of the CR-27R which is the replacement Arapahoe Aquifer well in the Meadows.  The Arapahoe Aquifer Well CR-232 will be 680 feet deeper than CR-27R. 


When reviewing each line item in the proposals, there is one increase in a specific line item due to increased fuel cost and increased labor costs.  However, this increase is within acceptable range 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.   The remaining cost differences are due to design changes we are requesting and depth. The new wells incorporate the new design changes such as stainless steel, glass beads, and advanced development techniques.  The CR-232 and CR-233 proposal does include a mitigation design for the risks associated with Dawson aquifer caving and lost circulation issues that could be encountered.  The main increase in overall cost, which accounts for $301,600, is from the additional blank stainless steel in the casing string that is needed for the ASR component of the project.  There are additional scope items that are needed when completing an ASR well.  The next largest increase in cost is due to the increase in the total depth of CR-232 of 680 feet which equates to an increase of $199,934. 


The construction, which includes the drilling, completion, and testing for the wells is planned to start in late January and is expected to continue through end of April 2020.  The drilling, completion and development activities for both wells will occur back to back with CR-232 drilling starting first.  Once CR-232 is completed then Hydro will mobilize to CR-233 and start drilling.  Testing for CR-232 will start March with the installation of the new pumping equipment and controls to follow in a separate contract but anticipated for May 2020.  Testing for CR-233 will occur in April with the installation of the

new pumping equipment and controls to follow in a separate contract but anticipated for May - June 2020.  Staff is currently in the process of scoping the Request For Proposal for the facility design.  We anticipate awarding the contract in January 2020.  After the facility design is completed, staff will issue the RFP for the construction of the facility.  Staff anticipates completion of the full project in Fall of 2020.  With wells available for temporary service by early July 2020.


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.

design of wells and oversight of drilling


Hydro Resources, Rocky Mountain Inc.

drilling, completion and testing of wells


Hydro Resources, Rocky Mountain Inc.

Pumping equipment installation


Facility Design Consultant

Design well facility


Facility Contractor

Construction of the facility and yard piping


Estimated Total Cost



^ = Proposed Budget

* = Staff Estimated Budget


Budget Impact


The funding for the construction contract will come from CIP Account 210-4275-442.75-39 (New Wells), which has a current balance of $3,372,523.17.  The Town will use these funds for the construction, which includes drilling, completion, and testing of this project.  The Hydro proposal fee is $2,931,416.00.  Staff requests a Town-managed contingency in the amount of $293,142.00 for a total authorization of $3,224,558.00.


Project                                    Amount                  Contingency               Total Amount

210-4275-442.75-39           $2,931,416.00              $293,142.00                $3,224,558.00

New Wells



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, and testing for the construction of Wells CR-232 and CR-233 in the amount of $2,931,416.00 plus a 10% Town managed contingency of $293,142.00 for a total authorization of $3,224,558.00.


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