Castle Rock Water Commission

Todd Warnke Chair John Wright Vice Chair Castle Rock Water Commission Wyn Barrett Meeting Minutes - Final Clark Hammelman Bill Leung Katherine Redmond Carol Selos Wednesday, July 22, 2020 6:00 PM Castle Rock Water 175 Kellogg Ct., Bldg. 183 Castle Rock, CO 80109 This meeting is open to the public and will be held in a fully virtual format in accordance with Town Council Meeting Special Procedures During Declared Disasters. This meeting will be hosted online and can be accessed at https://crgov.webex.com, or phone in by calling (720) 650-7664, meeting code 262 054 165. Three or more Council members may also attend this meeting, during which the items listed herein will be discussed. CALL TO ORDER / ROLL CALL Present 7 - Chair Todd Warnke, Vice Chair John Wright, Commissioner Wyn Barrett, Commissioner Clark Hammelman, Commissioner Bill Leung, Commissioner Katherine Redmond, and Commissioner Carol Selos Attendance 7 - Caryn Johnson, Mark Marlowe, Tim Friday, Anne Glassman, Jeanne Stevens, Jennifer Thompson, and MaryJo Woodrick COUNCIL UPDATE Councilmember Johnson updated the commission on various Town Council topics from the July 7th and July 21st Council Meetings. Topics included several proclamations including, Human Rights, Ducky Derby and Mayors Water Pledge, the Gateway Mesa Annexation, the Financial audit was completed successfully, Crystal Valley Ranch consolidation plan, Police Dept. becoming part of FPPA, Castle Rock Designs Service Agreement for the Colorado Front Range Trail, Health Department options and plans, Face Mask communication and education, intergovernmental agreement (IGA) with Douglas County for the November Election and the Plum Creek widening and roundabout project. Councilmember Johnson also shared that there will be one Town Council meeting in August and that it will be Jess Loban’s last meeting as he has resigned from Town Council. COMMISSION COMMENTS Commissioner Hammelman welcomed Bill and Wyn to the Water Commission board. Commissioner Wright shared that he and his wife are going to work with a landscape architect to create a new space that is more water efficient. ADMINISTRATIVE BUSINESS WC 2020-061 Approval of the June 24, 2020 Meeting Minutes Castle Rock Water Commission Meeting Minutes - Final July 22, 2020 It was moved by Bill Leung and seconded by John Wright to approve the meeting minutes for June 24, 2020 as written. The motion passed with a vote of 4-0-3 Yes: 4 - Chair Warnke, Vice Chair Wright, Commissioner Leung, and Commissioner Selos Abstain: 3 - Commissioner Barrett, Commissioner Hammelman, and Commissioner Redmond WC 2020-062 2020 Commitment Award Town Council Agenda Date: July 7, 2020 Mr. Marlowe shared that Castle Rock Water received the 2020 Commitment Award from the Colorado Department of Public Health and Environment. This award has replaced the Gold PursuingExcellence award. The Gold Award was given each year to water providers that went above and beyond the required regulations to improve their systems. As of 2020 the PursuingExcellence Award Program was discontinued and now Colorado Department of Public Health and Environment (CDPHE) will select two recipients each year to honor. Castle Rock Water was selected as the first recipient to receive the new award. It is a great honor to receive this award. ACTION ITEMS (HIGH PRIORITY / TIME CRITICAL) WC 2020-063 Pine Canyon Waste Water Site Application Town Council Agenda Date: Mr. Marlowe explained that the attached memo is the update that was presented to Town Council. Mr. Marlowe also explained that the following items have come up since the last Water Commission meeting. The developer for the Pine Canyon development has submitted a site application to CDPHE for a waste water treatment plant. As part of the application the developer must submit the site application to other interested parties. These parties include the Town of Castle Rock (Town), Chatfield Watershed Authority (CWSA), and Tri-County Health. All three entities will need to submit feedback to CDPHE within 60 days. This feedback should include whether each agency is for or against the application with information as to how they came to this determination. CDPHE will make the final decision on the application. CWSA is the 208 planning agency for this area so their recommendation may carry more weight than other agencies. As such, CWSA will need to approve two items, the site application as well as a waste load allocation for phosphorus. The waste load allocation is hard to obtain due to the fact that most of the phosphorus capacity is already spoken for. Phosphorus is closely controlled to maintain good water quality in Chatfield Reservoir. In the case of not enough load allocation, the developer may turn in a Water Quality Trade Application. A water quality trade, is when an agency can make improvements on the property that remove phosphorus from getting into the creek. This would be in exchange for a direct waste water discharge to the creek containing an equal amount of phosphorus. At this time they have provided a water quality trade application. The Town is working with several other providers to determine what options the CWSA has to deny both the site application and phosphorus waste load trade application. To support a denial, CWSA will need to make sure that the reasons are following very specific criteria in CWSA rules. Castle Rock Water Commission Meeting Minutes - Final July 22, 2020 Mr. Marlowe also shared that Douglas County has supplied their initial review. Within the review they identified many of the same concerns as the Town: renewable water, well interference, lack of information on all infrastructure, water conservation and demand numbers were very optimistic and highly unlike to be achieved. The applicant is “water short” which means not enough non tributary groundwater. The next steps for the applicant will be to respond to Douglas County with information for all of the questions. Once those answers have been received, Douglas County will send the application to the Town for referral comments. Subsequently, zoning hearings will begin. The developer will also be able to submit a Water Appeal. The Water Appeal allows the developer to appeal to Douglas County to approve the water supply even though they do not have the required amount. Parker Water & Sanitation Board of Directors has agreed to provide a letter to Douglas County recommending denial of this development. Their main focus for their recommendation is the lack of renewable water and the need to stop approving small water districts. The Town has hired an attorney Vranesh & Raisch to help with the regulatory items and Leonard Rice Engineering to look at well to well interference. DIRECTOR FOLLOW-UP AND INFORMATIONAL / UPDATE ITEMS WC 2020-064 Resolution Approving an Intergovernmental Agreement For Wastewater Capacity Reservation Between the Town of Castle Rock and the Silver Heights Water and Sanitation District Town Council Agenda Date: July 21, 2020 Mr. Marlowe reported that the Silver Heights Water and Sanitation Dist. (SHWSD) serves a small development that is north of Home Depot. Within this development is a nursing home facility. In the late 1980’s Silver Heights came to several agreements with the Town at about the time the Town joined the Plum Creek Waste Water Authority (PCWWA). The agreement allowed SHWSD to have a small capacity with PCWWA as a special connector. There were two special connector agreements. Castleton is the other special connector. When originally created - Town provided them treatment capacity as well as capacity in the wastewater system to get the water to the facility. At the time no costs were agreed upon for maintenance and repair of the collection infrastructure. SHWSD is currently using a little more than half of their capacity in the collection system. The company that owns the nursing home has reached out to SHWSD and in turn the Town, requesting an increase in capacity so that they may build a senior living facility next to the nursing home. This gave the Town the opportunity to fix the issue of not paying anything for the maintenance and repair of the collection infrastructure. They currently only need a very small amount of capacity so the agreement states that in addition to the additional supply SHWSD would pay system development fees plus a 25% surcharge. The agreement also requires that SHWSD pay operation and maintenance costs on the sewer collection Castle Rock Water Commission Meeting Minutes - Final July 22, 2020 system for the remaining capacity of Silver Heights. This will help to recover some of the operations and maintenance costs that have never been collected. WC 2020-065 Resolution: Purchase of Additional Capacity in East Cherry Creek Valley Water and Sanitation District’s Barr Lake Northern Pipeline Town Council Agenda Date: July 7, 2020 Mr. Marlowe reported that this item was brought to the Commission prior to the pandemic. It was then placed on hold during the height of the pandemic because CRW was unclear what the financial effects would be due to the pandemic. At this time, the agreement is being re-evaluated for final closing. When SMWSA was reviewing the document they noticed a mistake in the capacity amount that was identified for purchase. It is actually a smaller amount for the same money as what was originally shared with Council and Commission. Mr. Marlowe explained that even though it is a slightly smaller amount the cost is still very good when you compare it to the cost of building a pipeline up to Barr Lake. The original capacity was 1.4 million gallons per day (MGD), the actual capacity will be .913 MGD. WC 2020-066 Resolution Approving a Construction Contract with Velocity Constructors, Inc. for the Well CR-81 Well Facility Project Town Council Agenda Date: July 21, 2020 Ms. Stevens shared a presentation on the construction contract with Velocity Constructors Inc. CR-81 is an old alluvial well that Castle Rock Water (CRW) would like to rehabilitate so that it can be used again. The goal is to get the water to the existing pipeline for the Plum Creek Diversion. For this project they will install a new control and metering facility, a new transmission main and new electrical service. CRW plant mechanics and supervisory control and data acquisition (SCADA) staff will construct the control panel and SCADA integration. Velocity was the low bid. They have not worked for the Town recently but staff is happy to be working with them again. WC 2020-067 Resolution Approving the First Amendment to the Water Rights Lease Between the Town of Castle Rock and Turnpike, LLC Town Council Agenda Date: July 21, 2020 Mr. Marlowe explained that this is an amendment to a lease agreement that Commission and Council have already approved. The farmer has requested to lease more water this year due to the weather conditions in their area. WC 2020-068 Rates and Fees Study (Vol. 1 & Vol. 2) Town Council Agenda Date: September 1 & 15, 2020 Mr. Marlowe shared that this item is a summary of the 2021 Rates & Fees that staff will be recommending. Castle Rock Water Commission Meeting Minutes - Final July 22, 2020 Rates - the rates model worked well this year. Staff went into the study with the goal to not increase customer rates. The modeling supported this goal and CRW is able to recommend a 0% increase across all four enterprise funds for existing customer rates. With this option CRW will still be able to build the Admin building as well as the Liberty Village tank project. This also allows for the construction of Castle Rock Reservoir #2 which is the larger of the two reservoirs that will be located on the property in Sedalia next to the diversion. An additional item that will be recommended to Council is a change to the .67 single family equivalent (SFE) guidelines. In the past, homes developed and permitted as the .67 single family homes would receive the system development fees at .67 and then the customer living in the home would receive the .67 water resource discount. The customers often used more water than the .67 amount while homes without the .67 discount were able to conserve water equal to this amount. As such, the recommendation is to continue with the .67 rate for the system development fee but once the customer has moved in, they will pay the standard water rates. The recommendation also requests that those currently receiving the discount be grandfathered in. This would mean that the current .67 customers will still receive the discount, and as the accounts are transferred, the rate will be reset to match the non .67 customers. System development fees - This item was more difficult this year. The system development fees study looks at the growth related portion of the Capital investments, as well as how much additional capacity those growth related projects provide. It then takes a portion of the existing system and defines the remaining capacity in the remaining system and assigns a portion of the capital value of our existing system to growth. Finally, it combines this value with future growth related projects and all of those capacities and takes that number and divides it out and provides a cost per unit of capacity. There is no time component with this model. In reality CRW is adjusting system development fees each year based on the capital plan. As a result when you take the numbers from the system development fee model and incorporate that revenue into the long term financial model. You learn that you don’t have to ask for the entire increase in one year. It can be divided over multiple years. This year the system development fee model suggested increases across the board to all the enterprise system development fees from as low as 18% up to 36%. Mr. Marlowe explained that what that says is CRW has a legally strong defense to raise them by that amount, but he feels that in practice it isn’t a good plan. After a lot of consideration the CRW staff feels that the recommended increase should be 10% in the water fund, 5% in the water resources fund, 5% in the stormwater fund and 0% in the wastewater fund for this year. If taken all together that comes to 4.9 % which is a little higher than the 3.1% suggestion from 2020. CRW staff will bring this item back to the August 26, 2020 Commission meeting and at that time will request a motion. Castle Rock Water Commission Meeting Minutes - Final July 22, 2020 WC 2020-069 2020 ColoradoScape Contest Town Council Agenda Date: <Jan./Feb./Mar., etc dd, yyy> Mr. Marlowe reported that CRW is sponsoring the ColoradoScape Makeover Contest again this year. This year due to the pandemic CRW does not have as many sponsors so CRW will pay more of the costs. Customers will make a video and then a committee will select the top five. The community will vote on the top five videos picking the winner. The renovation will be done in September. For all the contest guidelines visit the crconserve website. WC 2020-070 Proclamation: My Water Pledge, Mayor’s Challenge Town Council Agenda Date: July 7, 2020 & July 21, 2020 Mr. Marlowe explained that this is the national competition that Castle Rock has participated in the last few years and placed in the top 10 the last few years. This event is sponsored by the Wyland Foundation. COMMISSIONER MEETING COMMENTS Commissioner Wright - This was a great meeting. Commissioner Leung - He found the rates model very interesting and he looks forward to learning more. Commissioner Redmond - Would like to know if CRW is doing any outreach through the schools to promote the programs and water conservation. Kids are a great resource to reach parents. Commissioner Warnke - Thanked the new members and recognized that the finance topics are definitely a lot of information. He appreciates everyone’s interest and willingness to participate in these topics.