To: Honorable Mayor and Members of Town Council
Through: David L. Corliss, Town Manager
From: Mark Marlowe, Director of Castle Rock Water
Matt Benak, Water Resources Manager
Title
Resolution of the Castle Rock Town Council Appointing a Representative and an Alternate to Serve on the Board of Directors of the Cherry Creek Project Water Authority
Body
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Executive Summary
On February 12, 2021 the Town of Castle Rock closed on the purchase of Arapahoe County Water & Wastewater Authority’s (ACWWA’s) 41.25% stake in the Cherry Creek Project Water Authority (CCPWA). With this purchase, Castle Rock Water must now name staff to be members of the Authority Board per the terms of Article IV of the First Amended and Restated Water Project Agreement and Establishing Contract of the CCPWA. Section 4.1.a. of this Agreement states that each member shall appoint one representative to serve on the Authority Board and may name one or more alternate Board members.
Castle Rock Water would like to name Matt Benak, Water Resources Manager as the primary Board member representing Castle Rock’s interest in the Authority with Mark Marlowe, Director of Castle Rock Water as an alternate Board member.
History of Past Town Council, Boards & Commissions, and Other Discussions
On June 17, 2019, CRW staff presented the opportunity to purchase ACWWA’s interest in the CCPWA to the Castle Rock Water Commission (CRWC), who recommended that the Town move forward with the purchase.
On June, 18, 2019, CRW staff presented the opportunity to purchase ACWWA’s interest in the CCPWA to the Water Resources Committee. The Committee recommended moving forward with an offer, the offer ultimately agreed to and outlined in this memo.
On October 2, 2019, the Director of CRW attended the CCPWA’s Board Meeting to discuss Castle Rock’s proposed purchase of ACWWA’s interest in the project and to confirm that the other members were open to reevaluating the proposed capital infrastructure for the project and the manner in which that infrastructure is funded by the CCPWA members.
On October 23, 2019, CRW staff presented the revised agreement to CRWC, and CRWC again recommended that Council approve the purchase and the agreement.
On December 11, 2019, CRWC was updated on the final agreement approach and CRWC offered their continued support by general consensus.
On January 21, 2020, Town Council approved the Purchase and Sale Agreement with ACWWA.
On March 5, 2020 the Town and ACWWA entered into the Contract for the Purchase and Sale Agreement.
On May 5, 2020, the Town and ACWWA entered into the First Amendment to the Contract for the Purchase and Sale Agreement which put into effect a 90-day stay due to the potential impacts of the COVID-19 pandemic.
On November 3, 2020, Town Council approved the Second Amendment to the Contract for the Purchase and Sale Agreement to provide an extension of time for diligence activities and closing.
Discussion
The CCPWA is a group of water providers that has formed an Authority to construct and operate a water project, consisting of renewable and Denver Basin water, in the Cherry Creek Basin to provide relatively firm water yield of from 500 to 2,000 acre feet per year. Now that the Town of Castle Rock has closed on the purchase of ACWWA’s shares in the Authority, CCPWA is comprised of four participants with shares in the project as follows:
• Castle Rock Water: 41.25%
• Inverness Water & Sanitation District: 31.118%
• Denver Southeast Suburban (AKA “The Pinery”): 20.489%
• Cottonwood Water & Sanitation District: 7.143%
The assets that Castle Rock obtained include:
1. Senior absolute renewable water rights of approximately 80.69 acre feet annually;
2. Junior absolute renewable water rights of up to 240 acre feet annually;
3. Junior conditional renewable water rights of up to 201.5 acre feet annually;
4. Denver Basin groundwater rights of up to 3,175 acre feet annually;
5. 41.25% of two Denver Basin groundwater wells;
6. 41.25% of two property parcels (63 acres and 167 acres) including mineral rights;
7. Easements for tributary and Denver Basin wells;
8. An augmentation plan and various related water rights.
All of the water rights have been decreed for use in Castle Rock’s service area so there will not be a need to go back to Water Court. CRW’s water rights consultant has analyzed the renewable water rights in this portfolio and believes that the yield will vary from 75 to 533 acre feet per year with an average yield of about 247 acre feet of renewable water. This assumes that Castle Rock Water upgrades alluvial wells we own or CCPWA owns and builds a pipeline from those wells to Rueter-Hess Reservoir (RHR). If we do not build these improvements, we could capture between 11 and 132 acre feet of renewable water with an average yield of 65 acre feet just by upgrading the diversion pump station at Parker’s RHR diversion on Cherry Creek. Another way Castle Rock may utilize renewable water is with a new agreement with the Pinery to receive treated water at our existing interconnect.
Now that the Town is an official member of the Authority, it must name staff to be part of the Authority Board. Matt Benak and Mark Marlowe have been closely involved in the diligence activities and the purchase agreement for nearly two years. Staff is recommending that Mr. Benak be named to the Authority Board to represent Castle Rock’s interest and that Mr. Marlowe be named as an alternate Board Member.
Budget Impact
There are no direct financial impacts by naming staff to the CCPWA Board.
Recommendations
Staff and CRW Commission recommend that Town Council approve the appointment of staff to the CCPWA Board.
Proposed Motion
“I move to approve the Resolution as introduced by title.”
Attachments
Attachment A: Resolution