To: Members of the Castle Rock Water Commission
From: Mark Marlowe, P.E., Director of Castle Rock Water
Matt Benak, P.E., Water Resources Manager
Jakob Hartmann, Water Resources Program Analyst
Title
Resolution: Approving an Agreement for Purchase and Sale of Ridgegate Pipeline Capacity between the Town of Castle Rock and Stonegate Village Metropolitan District [Northern Douglas County near Parker, CO]
Town Council Agenda Date: October 18, 2022
Body
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Executive Summary
The purpose of this memorandum is to request approval of a resolution (see Attachment A) to approve an agreement for purchase of pipeline capacity in the Ridgegate Pipeline currently owned by Stonegate Village Metropolitan District (Stonegate). Both the Town of Castle Rock and Stonegate are parties involved in the South Metro WISE Authority Formation and Organizational Intergovernmental Agreement (“SMWSA Agreement”) and Intergovernmental Water Infrastructure Cost Sharing, Construction and Capacity Allocation Agreement (“Ridgegate Construction Agreement”). Pursuant to the Ridgegate Construction Agreement, parties are allowed to sell and convey their rights in the Ridgegate Pipeline to other members. Currently Stonegate owns 19.9% of the pipeline capacity and has determined they no longer need this pipeline capacity. With this agreement, Stonegate will sell 16.58% (or 2.5 million gallons per day [MGD]) of the total capacity to the Town and intends to convey the remaining 3.32% (or 0.5 MGD) to Parker Water and Sanitation District (Parker). The purchase price of the 16.58% capacity is $3,272,988 and was calculated based on Stonegate’s actual costs plus $10,000 to cover the legal, accounting and engineering costs associated with the conveyance process.
History of Past Town Council, Boards & Commissions, or Other Discussions
May 7, 2013, Town Council approved the South Metro WISE Authority Formation and Organizational Intergovernmental Agreement.
June 6, 2016, the Town entered into the Intergovernmental Water Infrastructure Cost Sharing, Construction and Capacity Allocation Agreement (the “Ridgegate Construction Agreement”).
April 17, 2019, the Town of Castle Rock entered into the Purchase and Sale of Western Pipeline and Ridgegate Pipeline Capacity Agreement with Pinery Water and Wastewater District (“Pinery”).
Discussion
The Ridgegate Pipeline is a key piece of the WISE infrastructure that will also be utilized by Castle Rock to move other water supplies from the north to Castle Rock in the future. Attachment B provides a map showing the location of the Ridgegate Pipeline relative to other Castle Rock and WISE infrastructure. The Ridgegate Pipeline is managed and operated by Parker.
The Town and Stonegate are both parties to the SMWSA Agreement as well as the Ridgegate Construction Agreement. Members of the agreements are authorized to sell and convey their capacity in the Ridgegate Pipeline. Stonegate is the original holder of a peak flow capacity of 3.00 MGD of capacity in the Ridgegate Pipeline, which equates to 19.9% of the total capacity in the pipeline. In 2019, the Town acquired 1.00 MGD of Pinery’s interest in the Ridgegate Pipeline.
Stonegate has determined that its capacity in the Ridgegate pipeline no longer serves its needs and therefore, would like to sell capacity to other pipeline partners. Castle Rock currently owns 4 MGD of capacity in the Ridgegate Pipeline and by purchasing 2.5 MGD of new capacity will own 6.5 MGD. Capacity was originally intended to meet maximum WISE flows but given the Town’s additional acquisition of the Douglas County WISE option water and additional water from the future Box Elder project, additional pipeline capacity is needed. The Town’s ultimate capacity needed in this pipeline is 7.4 MGD. Although staff will still need to find solutions to the remaining capacity needs, by purchasing Stonegate’s available capacity in the Ridgegate Pipeline, a significant portion of the Town’s renewable and reusable water rights will be able to reach the Castle Rock service area.
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SUMMARY OF WISE INFRASTRUCTURE CAPACITIES FOR CASTLE ROCK |
|
|
Infrastructure Capacity (MGD) |
TCR Current Capacity (MGD) |
TCR Capacity Needed |
Capacity to Purchase from Stonegate (MGD) |
TCR + STO Purchase Capacity (MGD) |
Capacity Still Needed |
|
|
|
|
For Avg. Flows (4.8 MGD) |
For Max Flows (7.4 MGD) |
|
|
For Avg. Flows (4.8 MGD) |
For Max Flows (7.4 MGD) |
|
Binney Connection |
30 |
4.74 |
0.06 |
2.66 |
0.00 |
4.74 |
0.06 |
2.66 |
|
Western Pipeline |
38 |
6.33 |
0 |
1.07 |
0.00 |
6.33 |
0 |
1.07 |
|
Ridgegate Pipeline |
15 |
4.00 |
0.8 |
3.4 |
2.5 |
6.5 |
0 |
0.9 |
Budget Impact
The total purchase price for the 2.5 MGD of Ridgegate Pipeline capacity is Three Million Two Hundred Seventy-Two Thousand Nine Hundred Eighty-Eight Dollars ($3,272,988). Funding for this purchase will come from the WISE Infrastructure account (211-4375-443.77-72), which currently has a balance of $3,138,030.51. A budget transfer of $134,958 will be necessary from the Water Resources CIP Operations and Maintenance account (211-4375-443.40-90) to the WISE infrastructure account.
Proposed Motion
“I move to recommend to Town Council approval of the Resolution as presented”
Attachments
Attachment A: Resolution (Not Attached)
Exhibit 1: Agreement
Attachment B: Location Map