To: Honorable Mayor and Members of Town Council
Through: David L. Corliss, Town Manager
From: Mark Marlowe, P.E., Director of Castle Rock Water
Matt Benak, P.E., Water Resources Manager
Title
Resolution Approving the Intergovernmental Agreement between the Town of Castle Rock and Parker Water and Sanitation District (Parker Midsection Pipeline/Canyons Pump Station)
Body
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Executive Summary
The purpose of this memorandum is to request Town Council approval of a resolution (Attachment A) for an Intergovernmental Agreement (IGA) between the Town of Castle Rock and Parker Water and Sanitation District (PWSD) for the design, construction and project management of the Parker Midsection Pipeline/Canyons Pump Station Project. This IGA and the corresponding project are part of the larger Water Infrastructure and Supply Efficiency (WISE) project. A map of the key components of the WISE project, including the proposed Parker Midsection Pipeline and Canyons Pump Station is provided as Attachment B.
The pipeline and pump station are wholly within PWSD’s service area, however, PWSD does not need capacity in this infrastructure for several years while Castle Rock and Dominion Water and Sanitation District (Dominion) have more immediate needs. Furthermore, Castle Rock’s existing Wheeling IGA with PWSD limits our pipeline transmission capacity in PWSD’s infrastructure to 1 million gallons per day (MGD), and eliminates transmission capacity by December 31, 2023. As such, Castle Rock will be undertaking the cost burden and project management of this project now so that we can be ensured to have adequate water transmission capacity for WISE project water and some of our treated supplies out of Rueter-Hess Reservoir.
The estimated cost of the pipeline and pump station project, from design to the end of construction, is $13.76 million. Castle Rock will be funding the entire project up front, with PWSD paying back their portion (an estimated $7.05 million) in early 2024 and Dominion paying their portion (an estimated $1.6 million) in accordance with a future IGA between Castle Rock and Dominion. Total investments in the larger WISE project are $52.4 million to date. Some of the additional future projects associated with the larger WISE project include the Denver International Airport (DIA) interconnect and the future WISE desalination plant, along with local pipelines paralleling our existing infrastructure. Castle Rock currently anticipates $93 million in future capital costs associated with the overall WISE project.
History of Past Town Council, Boards & Commissions, or Other Discussions
February 24, 2021, Castle Rock Water Commission voted 7 to 0 that Town Council approve the IGA between the Town of Castle Rock and PWSD for the Parker Midsection Pipeline/Canyons Pump Station Project.
Discussion
The purpose of this memorandum is to request Town Council approval of an IGA between the Town of Castle Rock and PWSD for the design, construction and project management of the Parker Midsection Pipeline/Canyons Pump Station Project.
The WISE Western Pipeline Purchase Agreement closed on October 21, 2014. Soon thereafter, the WISE Authority selected Western Summit as the design-builder for the modifications to the Western Pipeline. These modifications included a 2 million gallon storage tank, a chloramination disinfection facility, a greensand filtration system in a new water treatment plant, a pump station by-pass and supervisory control and data acquisition system (SCADA) improvements. Substantial completion of the WISE modification work occurred in December 2016 with final completion in mid-2017.
To be able to physically receive WISE water deliveries, infrastructure from the Western Pipeline had to also be constructed. In addition to the Ridgegate Line project, which was described to Council on April 19, 2016, a 36-inch, 3.4-mile pipeline (the “Canyons Pipeline”) was also constructed along with the Canyons Pump Station. Castle Rock then constructed the Outter Marker Road pipeline, a 5.1 mile pipeline, that brings the water to Ray Waterman Regional Water Treatment Facility for distribution to customers in the Town (see Attachment B).
On March 6, 2018, the Town and PWSD entered into a Wheeling Agreement for PWSD to transport WISE and other water to the Town through portions of the infrastructure owned and operated by PWSD. This Wheeling Agreement described the costs associated with the transport of water, and repair and maintenance of that transport infrastructure. This agreement also discussed a bottleneck in PWSD’s system that limits Castle Rock’s (and Dominion’s) flows to 1 MGD until December 31, 2023. After this date, Castle Rock and Dominion would no longer own capacity in this 24-inch pipeline section.
Thus, a new IGA has been developed between Castle Rock and PWSD for the design and construction of a new 2-mile, 42-inch diameter pipeline (the “Midsection Pipeline”) that will parallel the smaller diameter pipeline. Castle Rock will retain 8.8 MGD of capacity in this new pipeline, Dominion will obtain 4.2 MGD of capacity, and PWSD will obtain the balance of the capacity in of the 31.8 MGD total pipeline capacity. Additionally, the Canyons Pump Station will be expanded to increase Castle Rock’s capacity from 3 MGD to 8.8 MGD.
Because PWSD does not have an immediate need for the Midsection Pipeline, Castle Rock plans to pay for the design and construction of this pipeline and pump station expansion now, with reimbursement from PWSD in early 2024 for their portion. The Town will be developing a new IGA with Dominion for payment of their portion very soon. Key terms of the IGA with PWSD are as follows:
• Castle Rock initially pays for all costs associated with design, easement acquisition, and construction.
• Castle Rock staff time will be set at 1% of the estimated infrastructure cost and be reimbursed on a pro-rata basis by PWSD.
• Staff will manage the project, adjust costs as necessary and provide regular notices and updates to PWSD.
• An invoice for final cost reimbursement will be sent to PWSD upon project completion and payment will be made by PWSD within 45 days (this is anticipated to be in early 2024).
• Upon completion of the project, Castle Rock will convey ownership of the infrastructure to PWSD by Bill of Sale, but Castle Rock will maintain a capacity of 8.8 MGD in the pipeline and 8.8 MGD in the Canyons Pump Station.
Budget Impact
The overall estimated cost of the project is $13,762,000. The initial phase of the project will be to select a qualified professional engineering firm to design the new pipeline and pump station expansion. Staff estimates that this phase of the project will cost $945,000. A request for proposals for the design work is currently being developed and staff will be bringing back its recommendation for a design contract in April or May 2021 for Council consideration.
Monies for the design and construction of the aforementioned infrastructure will come from 211-4375-443.77-72 Water Resources, CIP - WISE Infrastructure, Project Code <WR WLI>. This account has a budget of $2,300,694 for 2021. The majority of the project expenditures are expected in 2022.
Staff Recommendation
Staff and CRW Commission recommend that Town Council approve the Agreement as presented in Exhibit 1.
Proposed Motion
“I move to approve the Resolution as introduced by title.”
Attachments
Attachment A: Resolution
Exhibit 1: Agreement
Attachment B: Map of WISE Local Infrastructure