To: Honorable Mayor and Members of Town Council
Through: David L. Corliss, Town Manager
From: Mark Marlowe, P.E., Director of Castle Rock Water
Roy Gallea, Engineering Manager
Josh Hansen, CIP Project Manager
Title
Resolution Approving a Construction Contract with DN Tanks, LLC D/B/A DN Tanks of Colorado, LLC for the Cobblestone Ranch 2 MG Water Storage Tank Project [4700 Antelope Place]
Body
________________________________________________________________________________
Executive Summary
Castle Rock Water is seeking Town Council approval of a resolution (Attachment A) approving a construction contract (Exhibit 1) in the amount of $4,386,765 with DN Tanks of Colorado, LLC (DN Tanks) along with $438,700 (10%) staff-managed contingency, for a total authorization of $4,825,465 to complete construction of the Cobblestone Ranch 2 million gallon (MG) Water Storage Tank (also known as Tank 18). The location for Tank 18 is shown on Attachment B.
The Town originally bid Tank 18 for construction in 2014. Bid prices were significantly over budget at the time and construction was deferred. Since that time the majority of homes in the Cobblestone Ranch Development have been constructed, and the tank project has been fully funded by tap fees. The tank is needed for water supply for the development and to help buffer high pressure events in the distribution system. Castle Rock Water included construction funds in the 2022 budget and recently updated construction documents and regulatory approvals for the project. Staff shortlisted five contractors through a public advertised Request for Qualifications in December 2021 and extended a formal invitation to bid to these contractors in February 2022. Three bids were received in response to the invitation. DN Tanks submitted the lowest bid which was deemed the best overall value for the work. The project construction schedule will be 240 calendar days from notice to proceed, with an estimated substantial completion in early 2023.
History of Past Town Council, Boards & Commissions, or Other Discussions
On December 1, 2021 Castle Rock Water Commission was briefed on Water Tank 18 history and anticipated schedule for rebidding construction.
On February 23, 2022 Castle Rock Water Commission voted unanimously to recommend award of a construction contract in the amount of $4,386,765 with DN Tanks along with authorization of $438,700 in staff-managed contingency to complete construction of Cobblestone Ranch 2 MG Water Storage Tank 18.
Notification and Outreach Efforts
Preliminary project information is currently published on the Town’s website and will be updated periodically throughout construction. Project information letters were mailed to adjacent neighborhood residents in unincorporated Douglas County in December 2021. Staff have corresponded directly with some residents of unincorporated Douglas County regarding project inquiries.
The associated blue zone tank line is a concurrent project being designed by Water Staff and mentioned in more detail below. The waterline will be constructed in Douglas County Right-of-Way and project information will be referred to adjacent property owners through the County’s Location and Extent (L&E) process. Tank project information will be conveyed to County property owners during the L&E process for the waterline.
Discussion
The Cobblestone Ranch Development on the far northeastern edge of Town, is zoned for 1,245 single family equivalents (SFEs). In accordance with the Development Agreement (DA), the Town, “in order to fully integrate the water system constructed by the Owner with the Town’s municipal water system,” intended to construct a storage tank and related infrastructure to serve the property at full buildout. The tank project was to be financed and constructed by the Town by reliance on the Owner to purchase water system development fees. The DA further stipulated that should the Town determine that equivalent water services may be provided in lieu of development of the Water Tank the Town could apply revenues received to construct such alternate infrastructure.
Water system development fees are currently $5,700 per SFE. The development is rapidly approaching construction build-out of the 1,245 zoned SFE’s, which means water system tap fees collected have fully funded the new tank. The area is currently served by a single 16-inch pipeline from the Castle Oaks area (See Attachment B), with stored water from two existing red zone tanks. The water is fed down into the area through a series of pressure reducing valves (PRVs) that reduce the red zone supply pressure down to blue zone pressure then to yellow zone pressure to service the area. The two red zone tanks have a combined operational storage volume of 5.1 million gallons and have sufficient existing storage capacity to meet operational storage needs of Cobblestone Ranch. However, the storage from these tanks is delivered to the development by the single 16-inch pipeline. The single feed connection through multiple pressure zones is the primary reason a storage tank is needed.
In 2007, one of the PRVs serving the area failed and the resultant high pressure caused a rupture in the pipeline. This resulted in a temporary loss of water service for the entire development. Subsequently, Castle Rock Water installed pressure relief devices on the PRVs so that in the case of a high pressure event, the PRVs would divert water to relieve downstream pressure. Staff also completed an emergency interconnect waterline to the Pinery Water and Wastewater District system. This provided an immediate interim solution for a second source of water in an emergency situation.
The long term solution to a secondary supply of water is a storage tank serving the development. An advantage of a storage tank in the area is that the tank can act as a “damper” in high pressure events to mitigate pipeline rupture risks and provide an immediate supply for fire protection. Shortly after the high pressure pipeline event, staff started planning the Tank 18 project.
In 2013, Castle Rock Water engaged Bates Engineering to design a new 2 million-gallon potable water tank to support the Cobblestone Ranch Development. Staff bid construction of the project in early 2014. Bid pricing came in significantly higher than what was budgeted for the project and staff elected to defer construction of the tank. The primary reasons for deferring tank construction at that time included;
• Insufficient project funding - limited number of water system tap fees had been collected
• Water quality concerns due to low demand from limited number of homes constructed
• Redundant storage and supply available to meet existing development demands at the time
As of 2022, a significant portion of Cobblestone Ranch has been built out which has increased water demand from the area. Sufficient funding has been collected from tap fees and redundant supply from the tank is now needed to mitigate risk from the single waterline serving the development. As such, a request for contractor qualifications was published on the Rocky Mountain E-Purchasing System in late October 2021 and statements of qualifications were received from nine contractors. Staff evaluated qualifications and reduced the list to the five best qualified contractors. Bid documents were finalized and a formal invitation to bid was extended to the shortlisted contractors on February 3. The following bids were received;
|
Company |
Bid |
|
Engineer’s Estimate |
$4,298,496.39 |
|
DN Tanks of Colorado, LLC |
$4,386,765.00 |
|
Garney Companies, Inc. |
$4,659,024.60 |
|
Preload, LLC |
$5,118,000.00 |
Staff recommends contracting the work with DN Tanks who submitted the lowest bid for the work. The project construction schedule is 240 calendar days from notice to proceed.
Additional associated project costs include construction phase engineering services (currently estimated at $300,000).
A related construction project that is anticipated for presentation to Council in August 2022 is an 8,200-foot long 16-inch diameter potable pipeline. The pipeline is being designed by CR Water staff. The pipe will be installed along Pleasant View Drive and will connect to the blue pressure zone and provide the means for filling Tank 18. The estimated cost of this pipeline is $2.6 million.
Budget Impact
Funding for this project will come from the 2022 budget as shown below.
|
Project |
Account Number |
Budget |
Available Balance |
This Authorization |
|
Liberty Village Yellow Zn |
210-4275-442.75-89 |
$3,850,000 |
$ 3,850,000 |
$4,825,465 |
The current budget shortfall of $975,465 will be allocated by first quarter budget amendment to cover this allocation. Additional funds will also be needed for construction phase engineering services.
Staff Recommendation
Staff requests Council approval of a construction contract in the amount of $4,386,765 with DN Tanks, along with contingency of $438,700, resulting in a total project authorization of $ 4,825,465 for Cobblestone Ranch 2 MG Water Storage Tank 18.
Proposed Motions
“I move to recommend Town Council approve the Resolution as introduced by title.”
Alternative Motions
“I move to approve the Resolution as introduced by title, with the following conditions: (list conditions).”
“I move to continue this item to the Town Council meeting on ___date to allow additional time to (list information needed).”
Attachments
Attachment A: Resolution
Exhibit 1: Contract
Attachment B: Site Location Map