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 a Purchase Agreement between the Town of Castle Rock and Roxborough Water and Sanitation District for Water Rights and Other Infrastructure [Northern and Central Douglas County]
Body
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Executive Summary
The purpose of this memorandum is to seek Town Council approval of the resolution approving a purchase and sale agreement between Roxborough Water and Sanitation District (Roxborough) and the Town of Castle Rock (Town) (see Attachment A). The Town desires to purchase certain infrastructure capacity and water rights owned by Roxborough. To this end the Town will acquire full ownership, capacity, and rights to the Bell Mountain wells (not including that portion owned by the Town of Lochbuie), Roxborough’s capacity in the Ravenna Pipeline, Castle Rock Reservoir No. 1, and the Plum Creek Diversion and Roxborough’s interest in the Meadow Ditch water rights (Attachment B). The purchase price is $2,273,000. In return, Roxborough will receive raw water delivered through the Ravenna Pipeline exclusively for irrigation of the Ravenna Golf Course in the maximum amount of 220 acre feet per year (AF/yr). If requested by Roxborough, and if Castle Rock determines that it has additional raw water available, the Town may deliver additional water to Roxborough at a higher unit rate. Water delivered up to 220 AF per year will be at $3.47 per 1,000 gallons (kgal) and water delivered above this volume will be at $5.20/kgal.
History of Past Town Council, Boards & Commissions, or Other Discussions
Castle Rock Water Commission reviewed the purchase and sale agreement at the June 22, 2022 meeting, and they voted unanimously to recommend Council approval.
Staff brought this item back to Castle Rock Water Commission on September 28, 2022 to inform them of the raw water rate determination and to see recommendation for approval by Town Council.
Discussion
In November of 2017, the Town of Castle Rock entered a Water Service Agreement with the Ravenna Metropolitan District. Previously, Ravenna was under a service agreement with Ravenna Project Water Activity Enterprise. Once Castle Rock Water acquired all of United Water and Sanitation District’s Douglas County assets, the Town became the provider of raw water to the Ravenna Golf Course. As part of this agreement, Castle Rock indicated how expenditures for the operation and maintenance of the Ravenna Water Facilities would be recovered. In 2018, Roxborough entered into an agreement to provide raw water service to the Ravenna Golf Course.
Roxborough is willing to sell the Property on the terms and conditions of the purchase and sale agreement. The “Property” is defined as the Roxborough easements, water rights, infrastructure, and miscellaneous property. The Bell Mountain wells water rights (Attachment C) located immediately south of Castle Rock are included as part of the Property. Roxborough currently owns 4.5% (1.8 cubic feet per second [cfs] of 40 cfs) capacity within the Plum Creek Diversion, 100 acre feet (AF) of 240 AF within Castle Rock Reservoir No. 1, and 23.53% of the Ravenna Pipeline capacity. Additionally, the Town would acquire Roxborough’s 75% interest in the water rights associated with the Meadows Ditch on Indian Creek. This water has an 1866 appropriation date and there are no downstream water rights on Indian Creek or Plum Creek with a higher seniority. According to our water rights engineering consultant, this water right may yield up to 50 AF annually.
As part of the purchase and sale agreement, Roxborough desires a ‘Will Serve’ Agreement for up to 220 AF of raw water per year, with the option to purchase additional raw water if available. This water would only apply to irrigation of the Ravenna golf course and no other purpose. Castle Rock has conducted a cost of service rate model for delivery of this water, and with applying an extraterritorial fee of 10%, the recommended delivery rate is $3.47/kgal. For water delivered beyond 220 AF in a single year, the Town would charge $5.20/kgal which corresponds to the same percentage increase from our Tier 2 to Tier 3 residential rates. Like all Castle Rock Water rates, this rate will be updated on an annual basis in accordance with actual cost of service.
Budget Impact
The Town currently has $6,620,000 in the Water Rights Acquisition project budget (Account Number 211-4375-443.75-47, Project Code WR OWR) for 2022. Thirty-five thousand dollars ($35,000) of the overall funding would come from the water fund (Account Number 210-4275-442.78-97 Ground Water Rights Purchase, Project Code WR OWR) due to the 424 AF of Denver Basin groundwater that will come with the purchase. The total purchase price for this agreement with Roxborough is $2,273,000.
Staff Recommendation
Castle Rock Water Commission recommended that Town Council approve the purchase and sale agreement with Roxborough.
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: Location Map
Attachment C: Bell Mountain Water Rights