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
Jakob Hartmann, Water Resources Program Analyst
Title
Resolution Approving an Agreement for the Purchase and Sale of Ridgegate Pipeline Capacity with Stonegate Village Metropolitan District [Northern Douglas County near Parker, CO]
Body
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Executive Summary
The purpose of this memorandum is to request approval of a resolution (Attachment A) to approve an agreement for purchase of pipeline capacity in the Ridgegate Pipeline currently owned by Stonegate Village Metropolitan District (Stonegate). This purchase is an important consideration for Castle Rock Water’s long term water resources strategic master plan. This additional pipeline infrastructure will benefit the WISE project and the Box Elder project, key imported water projects critical to CRW’s long term plan, providing needed capacity to allow for peak deliveries of water from these projects during high demand and high renewable water availability periods.
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. Attachment B shows the location of the Ridgegate Pipeline. 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. 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”).
On May 18, 2021, CRW provided Town Council with an update on the status of the WISE project, future needs for infrastructure associated with the WISE project, and deliveries and costs to date for the WISE project.
On September 28, 2022, the Castle Rock Water Commission (CRWC) recommended Town Council approve the purchase agreement with Stonegate for 2.5 MGD of capacity in the Ridgegate Pipeline for $3,272,988.
Discussion
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 to this account will be completed to cover the additional cost of $134,958 not currently in the WISE infrastructure account.
Recommendations
CRWC and staff recommend that Town Council approve the resolution to purchase the additional capacity in the Ridgegate Pipeline.
Proposed Motion
“I move to 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: Agreement
Attachment B: Ridgegate Pipeline Location Map