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File #: RES 2020-029    Version: 1 Name:
Type: Resolution Status: Passed
File created: 1/13/2020 In control: Town Council
On agenda: 3/3/2020 Final action: 3/3/2020
Title: Resolution Approving a Pumping, Aquifer Storage and Recovery Equipment, and Downhole Power Generation Equipment Installation Construction Contract with Hydro Resources - Rocky Mountain Inc. for Wells CR-232 and CR-233
Attachments: 1. Attachment A: Resolution, 2. Exhibit 1: Contract, 3. Attachment B: Location Map, 4. Attachment C: Sole Source, 5. Presentation

To:                     Honorable Mayor and Members of Town Council


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

                     Matt Benak, P.E., Water Resources Manager

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



Resolution Approving a Pumping, Aquifer Storage and Recovery Equipment, and Downhole Power Generation Equipment Installation 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 $2,293,335.  The agreement covers the installation of pumping equipment including the aquifer storage and recovery (ASR) and downhole power generation valves 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 construction, including drilling, completion and testing was approved under Resolution 2019-130. Staff wanted to delay the contracting for pumping equipment installation until the project team had time to prepare specifications, review the available equipment and complete downhole designs.  The contract is for the installation of pumping equipment with the capabilities of pumping groundwater from the aquifers and ASR with downhole power generation for the two new wells, one Arapahoe Aquifer well and one Denver Aquifer well that will supply raw water to the RWWTP.  The wells will add new water capacity from the existing Denver Basin aquifers, store excess WISE and renewable supplies (when available) and generate power during ASR operations. 


The downhole power generation equipment is new equipment and this will be the first full scale installation.  As such, Castle Rock Water (CRW) will enter into a pilot test agreement with Hydro separately.  The agreement will include a defined period for the pilot testing. The agreement will include any maintenance needed for the downhole equipment and control equipment during the testing period.  Technical support and troubleshooting for operations of all of the equipment, as well as replacement of the valve if it is not operating properly will also be included.  The pump and motor will also be replaced if they are damaged during ASR and downhole power generation operations.  The agreement will include analysis of power generation as it relates to ASR.  Additionally, the ASR valve is provided to Castle Rock at reduced costs as part of the pilot test program. 


Because 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 providing their services to the Town on other well projects, to determine if their schedule could accommodate the drilling of ASR wells CR - 232 and CR - 233 starting early 2020.  Hydro has been cost effective and has responded well to our tight schedules.  CRW’s goal is to have these two wells available on a temporary basis as emergency supply for a portion of the 2020 irrigation season.  Because there has been substantial population growth and our reuse water supply will not be available until late 2020, these wells could be necessary to meet peak demands in 2020 and/or backfill any major well facilities 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 of Wells CR-15R and CR-16R, drilling of CR-227 and the Lanterns well 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 $2,293,335.  In addition, Castle Rock Water staff request a 10% Town-managed contingency in the amount of $229,333 for a total authorization of $2,522,668.  The Construction Agreement is included as Exhibit 1 to the Resolution.  Dominion Water and Sanitation District will pay part of the costs associated with the ASR equipment as part of the Infrastructure Fee under the 2016 Firming Agreement.  The drilling, completion and testing with Hydro of the two wells was approved under Resolution 2019-130.  The request for proposals for the raw water facility and infrastructure design are currently under review and the construction contract will be sent out to bid after completion of the facility design.


Notification and Outreach Efforts


CR Water staff had an open house on February 20th at the Ray Waterman Water Treatment Plant (RWWTP) for residents to discuss the project.  Notification postcards were sent out to residents near the well sites prior to commencing drilling activities.  In addition, the project information is posted on the Town’s development Activity map as one of the Water Projects.  A construction project sign will be put in place that will have updated project information.


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


Castle Rock Water staff presented this resolution to the Castle Rock Water Commission at their February 26, 2020 meeting, and the Commission voted unanimously at a vote of 5 to 0 to recommend approval of the resolution to 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 new wells at RWWTP discussed in this memo 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 had availability to begin construction as early as the end of February 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 design for the pumping equipment includes Hydro’s ASR and power generation valve. The pumping equipment design also includes a variable frequency drive (VFD) that increases power efficiencies as it does not need a step up transformer or input filters and output filters.  The increase in price for the downhole pumping equipment when compared to the traditional pumping equipment is due to adding the ASR valve and the need for an enclosure for the operating and control equipment.  The final costs are slightly more than staff estimated due to the costs of the necessary manufactured equipment enclosure. 


Hydro also proposed collaborating 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 the laboratory to a real world application.  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.”  Power generation only occurs during ASR operations of the wells.  CR Water will work with IREA using their net metering program.  The pilot program agreement will be completed under a separate contract. 


Hydro’s proposal addressed the full scope of work, 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 with the proposal of 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.  The increased depths translate into more stainless steel drop pipe needed in the pumping equipment.  The largest line item discrepancy is the need for an enclosure for the equipment, which is an added scope item along with the ASR downhole power generation valve.


The construction, which includes the drilling, completion, and testing for the wells is planned to start in late February 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 in March with the installation of the new pumping equipment and controls to follow in May to early June 2020.  Testing for CR-233 will occur in April with the installation of the new pumping equipment and controls to follow in May - June 2020.  Staff has reviewed the Request For Proposal for the facility design and CRW plans to award the contract to PSI, who will complete the designs for wells 232, 233, 27, 231 and AL-81.  After the facility design is completed, staff will issue the RFP for the construction of the facility.  Staff anticipates completion of the project in the 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 be split between CIP Accounts 210-4275-442.75-39 (New Wells), which has a current balance of $3,000,000 and 211-4375-443.75-84 (Aquifer Storage and Recovery), which has a current balance of $0.  We will complete a budget amendment into CIP Account 211-4375-443.75-84 of $1,261,334.  The Town will use these funds for the pumping equipment and installation of this project.  The Hydro proposal fee is $2,293,335.00.  Staff requests a Town-managed contingency in the amount of $229,333.00 for a total authorization of $2,522,668.00.


Project                                    Amount                  Contingency               Total Amount

210-4275-442.75-39           $1,146,667.50              $114,666.50                $1,261,334.00

New Wells

211-4375-443.75-84           $1,146,667.50              $114,666.50                $1,261,334.00

Aquifer Storage and Recovery


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 pumping equipment and installation for the construction of Wells CR-232 and CR-233 in the amount of $2,293,335.00 plus a 10% Town managed contingency of $229,333.00 for a total authorization of $2,522,668.00.


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