September 17, 2018
Transcript
Describer:
AGENDA
CASTLE PINES NORTH METROPOLITAN DISTRICT
BOARD OF DIRECTORS
REGULAR BOARD MEETING
September 17, 2018 @ 6:00 PM
7404 Yorkshire Dr.
Castle Pines, CO 80108
Dave McEntire – President Term Expires May 2022
Robert Merritt – Vice President Term Expires May 2022
Denise Crew – Treasurer Term Expires May 2020
Kathy Rosenkrans – Director Term Expires May 2020
Norman Froman - Director Term Expires May 2020
1. Call to Order Regular Meeting/Pledge of Allegiance.
2. Roll Call/Announcement of Quorum/Disclosure of Potential Conflicts of Interest.
3. Approval of Agenda.
4. Public Comments.
5. Action Items.
A. Approve Minutes for the regular meeting of August 20, 2018.
B. Accept Financial Report and Items from Finance Director.
C. Approve/Ratify Current Payables For the Month of July (Checks # 23803 -23868)
General Fund/Debt Service Approve $ 0.00 Ratify $ 71,407.97
Enterprise Fund Approve $ 0.00 Ratify $ 389,557.16
Electronic Payments (all funds) Approve $ 0.00 Ratify $ 95,364.78
Total Expenditures Approve$ 0.00 Ratify $ 556,329.91
D. Consider Change Order for Pinnacle
E. Consider Basin 8 Easement from MIP-KC Castle Pines LLC
F. Consider Contract Approval with ESCO for construction of gravity sewer, decommissioning of Lift Station 8 and removal of Lift Station 8.
G. Public Hearing – Taylor Morrison Inclusion
H. Consider Taylor Morrison Inclusion.
I. Consider funding PCWRA 3 MGD Capacity Expansion Work Package No. 1 and Funding for Entirety of CPNMD Portion of the Project.
6. Communications Report.
7. Open Space Manager’s Report.
8. Manager’s Report.
9. Legal Counsel Report.
10. Directors’ Matters.
11. Public Comments.
12. Adjournment.
Describer: The video starts on graphic with a white background and forest green letters which says “Castle Pines North Metro District Board Meeting September 17, 2018”. The meeting opens on a shot of all board members present.
Board President David McEntire:
Good evening again. I'd like to start out by letting those in the audience know and welcoming, those that are viewing online that we are truly streaming live online. And, I want to just thank my fellow board members for making that happen and the staff for cooperating in that regard. And again, welcome to those watching online.
And welcome to everyone here this evening. With that, I'd like to, call roll and it I call roll if you will signify your presence, clearly in the mic so that our listening and watching audience can hear that you're here. We're just to any potential conflicts of interest at this point.
Board Member Director Norman Froman:
Director Norman Froman. No conflicts present.
Board Member Director Kathy Rosenkranz:
Director Kathy Rosenkranz. Present. No. No. Conflicts.
Board Member Director Denise Crew:
Director Denise Crew. Present. And any conflicts? No.
Board Member Director Robert Merritt:
Director Robert Merritt. Present. No conflicts.
David:
Of course I'm present. And I have no conflicts. David McEntire. For the record.
Item number three is the approval of the agenda board members, you have the agenda before you, you've had a chance to review it. If there are any. Comments, questions or concerns, initially, we could take them at this point. If not, I'd be looking for a motion to approve the agenda of September 17th. 2018.
District Manager Jim Nikkel:
Mr. President, might I suggest that we add one item that would be the Esperanza HOA landscape, issue at least, as discussion.
David:
We're talking about item five and call it, J. Would that be where you would see that?
Jim:
We could do that. I would not for sure that we're ready to take any action tonight on that. So I might suggest that we actually make that item five A or make that item six and adjust downward.
David:
Sure. Let's make it item. Well, before we do that, is there anyone in the audience here to speak about that? Okay.
Describer:
An audience members speaks up, but is off-mic.
David:
Thank thank thank you for that. And it's with that in mind that as opposed to making it number six will make it number five A. So, we'll talk to you in a few minutes.
If the Directors and staff will, then amend their agendas to include the Esperanza update.
Are there any other adjustments or amendments to this September 17th proposed agenda? Hearing none look for a motion to approve.
Norman:
I make a motion that we approve the agenda.
David:
We have a motion on the floor to approve. Do we have a second?
Robert:
A second motion to approve.
David
Okay, we have a motion by Director Froman and a second by Director Merritt.
To approve the agenda. All. Is there any further discussion? Hearing none.
Board Voting All Speak:
All those in favor signify by saying, I as I call for the vote, Director Froman. I. And of course, you can say nay if you want to, Director Rosenkranz. I. Director Crew. I. Director Merritt. I. McEntire is affirmative. Okay.
David:
Action or excuse me, item number four would be public comments.
Are there anyone that was too sheepish to put yes on my sign in sheet and reconsidered and want to speak. Say now or forever hold your piece until item nine or something? Okay. Thank you very much for your attendance. Everyone in again for those online, know that when you come to a meeting, you have the opportunity to speak to the board.
Albeit it's only for three minutes plus, plus or minus. We don't have anybody this evening that has asked to speak, so we'll hastily move to item number five.
Item number five A is an action item. And and as we mentioned in the approval process of the agenda, we've added five A and adjusted accordingly so that we can hear from the folks of Esperanza and the landscape budget that they brought before us last month. Who is it that is going to speak? And if you would approach the podium, please name your, share with us your name and address. Your your official capacity. And and we'll go from there.
Describer: Lisa Cain, a frequent attendee, rises and comes to the podium facing the board to the right of audience seating and to the left side of the board, near staff seating which is adjacent 90 degrees to the board and to the audience.
Lisa Cain, Castle Pines Resident:
Oh, thanks. I'm Lisa Cain. I live at 12660 Esperanza Court, Castle Pines, and I'm a resident in the Esperanza neighborhood. And I was asked by the neighborhood last month to submit a proposal for some landscaping at the trailhead entrances that empty into our neighborhood. And at the last meeting, you guys had requested us to submit the formal plan check with the South Metro Fire, which, of course you have the letter attached.
And, we had agreed to, enact a covenant restrictive agreement for the areas in which we, that you guys own the land and we have had permission in the past to allow to keep those areas. And so we included those plans in that what those areas are. And it's my understanding that this area would be under that as well.
In terms of the landscaping plan that was submitted, obviously there is water source there, but we are willing to just plant, drought tolerant plantings. And the reason in which we have rocks instead of bark is because in the area on the east trailhead, Mary Beth had gotten permission in the past to just cover that because it was weeds and she put bark and it's been a mess.
The bark just floats, gets messy. And so the neighborhood was really trying to keep these areas the same as what our other landscaping areas are. So when you come into our backyard off Daniels Park Road, it's rock on the outside of our gate, down in the S-curve and at the front entrance of the gate, there's some rocks.
So we're trying to balance that. And we were, we really didn't want to do bark because of the mess, and the continual maintaining of that. And we would be maintaining that. So.
David:
Thank you for that update. I know that there may be some concerns from the board members. As I recall, we where we left off with it last month was that not only were you going to submit a plan of which we've seen, we reviewed, we've come and we've discussed it internally. And while we may not have gone that direction, we were imploring you to give us some guidance, some counsel, some direction, by participating in some kind of of, memorialization of a new by way of a new agreement or an amendment to an existing agreement so that we knew not only what it was going to
Look like, but who was going to do what to whom. And, and, but I wasn't even clear whether or not there was an existing agreement that was accessible to counsel or to the staff to start from. We're really kind of leaning on you to participate in that process. I don't see an agreement before us tonight.
Lisa:
I don't know, Molly was taking care of that. Who is our property manager. And, in terms of the other open space areas, I'm not because I'm new. I'm not certain what the agreement was. In terms of that, we've always maintained those areas, even though you own the land in our S-curve and at our gates.
But we maintained it, and, Guardian who drew up this plan is who is maintaining that for us that's who our landscaper is for our neighborhood, and they will maintain those areas. I don't know what else, Molly. Everything would pass on to her, so I wasn't sure what else she needed. She knew about what had been communicated at the last meeting and what she prepared and sent to you.
I assume she presented everything that she needed to, I don't. I'm not aware of there being any kind of a written agreement in the past in terms of those areas. I know from her, it's not uncommon that in other areas, in Colorado, that there are properties that are held, by, other entities that are maintained by the neighborhood.
And so that is not uncommon. But whether she needed to have, I assume she had prepared everything for you. Because we provided I actually gone down to the assessor's and pulled the platting and all of those things to make sure who owned those areas and what was included in those covenant restrictive agreements that would say that we would maintain it and it would be maintained by currently Guardian Homescapes.
David:
Sure. Let me try to shortcut this. You're a newbie. I'm a newbie. And so the situation you found yourself in, I'm familiar with not knowing and understanding and being part of the landscape of the past. The history, the legend, if you will, the legacy. That being said, you and I get hit by that proverbial.
Bus. We need something that so that we don't put our colleagues or predecessors in, in succession.
Lisa:
And so what exactly...
David:
In the same situation it could be one or less, but we need something in writing that is going to clearly point out who's responsible for what, where the liability lies, what the maintenance schedule looks like, etc.. So when one of your neighbors calls us in there and we can share with them what we know, okay, we don't know anything right now other than what's been proposed.
You're about there. We need just a little bit more. We need to get back to where we talked about working with counsel on something we can memorialize. My colleagues may have more to say about that as well.
Lisa:
Well, and I, I as I said, I misunderstood. I assume that we had provided everything, but she can certainly write something up and get that to you tomorrow.
I know she wasn't here today. That will specify those areas that are marked on the plats that currently we maintain. So there's one, two, three, four. And this would be two additional areas. So six areas that she could identify on the plat that we will maintain and who is maintaining and currently who we have the contract with.
And how often it's maintained. Because they come out now twice a month or Guardian once a week, every week and maintain those areas. So we can certainly get that. We were hoping obviously to get this so we could get it done prior to the end of the planting season, but we.
Describer:
David and Robert speak off-mic.
Robert:
So, you say that in another week or so and we can just get it, like you said, memorialized where, who's going to take care of it? What the liability is. We referenced the plot that you pulled, and we could get a summative, and then we'll have counsel look at it. Our counsel look at it, and then we can get approved for it.
Lisa:
Sure, I can have her do that tomorrow and send in, because I thought we had everything. There may have been some miscommunication with her because we did talk to her about everything that happened at the meeting, and I assume that that's what she had included. I didn't see the entire thing that she submitted to you, but we can certainly do that.
Robert:
As soon as we get a document and then we can give it to our counsel, and then we can go the next step. Okay? Okay.
Lisa:
Great. Thanks. Thank you very much.
Describer:
Another attendee, Mary Beth, approaches the podium taking place next to Lisa.
Mary Beth Seamus, Castle Pines Resident:
I'm Mary Beth Seamus in Esperanza. Do you have a format? I, I mean, you're going to request this from a lot of other areas. Is there a format that we can standardize so we're not coming back over and over for what you want this memorial. I understand what you want, but I think if you give it to to each individual that is asking for these changes, we're going to have a standardized. So I don't know if you have anything in play right now.
David:
I mean, good question. But until which time we're put in a position to be able to respond. And we had hoped that tonight that would be the case with something in hand. Counsel is is this something that we want to spearhead or do we want to engage? The resident pocketbook and and and and labor only after we see a proposal from them.
Legal Counsel Kim Seter, Esq.:
We're going to need a proposal first. So that, we know what's being incorporated in the agreement. But from what I've heard, it sounds like we'll be pretty much drafting the standard that you're looking for. And this this will be the first one.
It shouldn't be too costly to put it together once we have the information. So if you want to require some kind of deposit for the attorney's fees, that's fine. But again, it's not going to be a real tough project.
Norman:
Mr. President, I would suggest that possibly we could get, Craig to, to kind of spearhead the mapping and land situation to get us a format since he's he's very good at the GIS.
David:
I don't know, Norman I don't think that that's the issue. The issue is the is the, the who's the who what, why, how and where, of an agreement. The text. We've got a great picture here. We had a great presentation. Both both months. We understand what the intent is. Memorialize that. You could do that. Memorialize that in in five paragraphs, five sentences or less.
And and please submit it. And, we'll start with that. But you're going to give us the critical information. You're going to you're going to share with us that we can, incorporate the fact that you're responsible for the maintenance. You're going to give us the fact that your your intentions are who's going to maintain it? You give us those point, please, and and we'll work between meetings.
Knowing the sense of urgency seasonally. And, and, try to get back to you as quickly as you can get that to us.
Lisa:
Well, you can decide, just so that you know, that we're, I guess, who we say we are. We've been experiencing a leak in our back island. It's within our gate. It's been going on for some time.
And, we initially contacted Craig Miller, to ask about looking into that. We had been told by him and by our other property manager that it was a spring, and we weren't sure. We believe that it was a spring, but we knew it was eroding our pavement, etc. So we actually hired an independent engineering company outside of what was recommended here.
And it was it actually is chlorinated water. So it is not a spring. It is probably from some irrigation line that's in that island. Of course, we're, undertook that cost and we're going forward with getting that repaired and trying to find out where that is. It's been very problematic in that there's no back flow there.
So even for us to find, you know, where n that's where this whole mix up of this whole thing is, is like, you know, is what. But back flow turn off controls that you know, we can't even find it. So, so anyways, I just add that we've been very frustrated with that. But we just kind of took it upon ourselves to go ahead and pay for this, independent engineering company, give us a report.
Identified what the problem was, and we've hired a company to come in, repair that or try to find where that leak is. We're hoping it's limited to that island. And perhaps it was done at some point when that was landscaped. I mean, who knows? It's been going on for some time, so we'll do that. I apologize that we were clear on meeting everything, but I certainly understand why you need that and will be very willing to provide that to you. Hopefully tomorrow.
Denise:
One last thing, Lisa. In the agreement with this water, you’re going to need water. Who's who's going to pay for it?
Lisa:
Well, and that's the thing I know in the past, I, I think there was some reticence and I could be speaking out of turn. As a new board member, I felt there were some reticence about pursuing this because we were getting water in these other areas.
Outside of our gate, inside our gate at the S curve in it. There was a gentlemen's agreement or I'm not even sure when that occurred with the Esker Landscaping. And so I know I've never seen anything in writing, but anyways, there is some plantings there and there are some sprinklers. So I always said that I thought that we should look into that.
And if it meant that we needed to start paying for that water that we're using in those four areas, we should, so I think we're willing to do that also. And I know there is, water source at that, that box disconnect. Yeah. Oh, it was disconnected.
Jim:
Yeah. So that's that was misstated earlier this evening there's water. First off it was stated water at both these locations. And that is incorrect. There is an old box that you can see in this photograph. It's kind of silver in nature. It was disconnected years ago. And the district does not supply water to any other any of the other locations that the HOA has been maintaining, and they were maintaining those simply under a handshake agreement with a prior. Right. Parks and open space manager.
Lisa:
But I did think there is a water. There is water at the S curve. There's sprinklers.
Jim:
And if if there is, it's owned by your HOA or by a private property owner, it's not owned by the district.
Lisa:
Okay. They say, well, see, that's good to know because it's my understanding from our previous property manager who's been with us this whole time, ten years.
That we were utilizing water from that you guys owned there. So that's good to know. And that was the agreement with Charlie Fagan years ago?
Jim:
Yeah, it would have been a Charlie deal, but, we don't have we we the district do not have a meter...
Lisa:
So that's good to know. And I know when we when Craig Miller first came out to look at that one trailhead area, they said, oh my gosh, you know about that silver box, you know, and thought that we had put that in or there was something and had been there ever since we moved into the neighborhood with Richmond.
That's good to know. I'm glad that you clarified that. Because.
David:
You know, in the spirit of expediting the item, that you're needing approvals for, you might want to separate. And feel free to come back at any time.
Lisa:
I will, and that's good to know, because then we won't need to be able to say that we would either be willing to pay for water. If they're not providing it, they will take care of that.
David:
You know where we live. Yep. Thank you. Okay. Thank you so much.
Kathy:
May I ask one question of Jim? There's no precedence in this area in district, is there?
Jim:
Not that's been memorialized. And that's the reason why we really wondered if we're going to proceed with this. We want documentation on it because the other areas. One man's native grass is another man's weeds.
And in most of those areas, it is weedy. There's been rock put down. There was probably fabric put down. And we have concerns, as I pointed out when I sent out the email with this information, the planning material, while it looks really nice in these photographs, will require water, even though it's xeric in nature. First year's going to require watering once a year and there not being water in those areas.
We question what this is going to look like in the future.
Describer:
*inaudible speaking off-mic
Jim:
Also at the rock, what you create is a large heat sink, which will be detrimental to the xeric plant. And while wood chip mulch is probably not desirable, and we would strongly suggest that they use something called gorilla hair, which is a shredded shrub or cedar product, and it locks itself together. It's what you'll see us putting into our islands these days.
That material does not blow. It requires similar maintenance to wood chips. You've got to come in and freshen it up from time to time. But it won't create the the heat effect on these xeric plants, which will then require just that much more water. Some things to be considered. One other thing that we're probably going to need is a plan.
We have a very nice rendering, but to to put together a document on this from this rendering, I mean, how far does it extend down the path, those types of questions that you can only answer when you look back at what we did, why we did it from a plan, at least describing what the area is. I don't know if we care as much what's in it, since the HOA is going to maintain it, but I think it's important from the district standpoint that we know where it is, how large it is, and that we incorporate at this time all those other areas that were done under a handshake agreement define what those areas are.
David:
Yeah. Good point. If this is going to set a precedent in any fashion counsel, with regard to a form, to be used in the future, I'm certain there's a box that wants to be there checkoff for a plan. So, that being said, thank you again for your presentation. You are clear on what we're looking for and how simple and quickly we can move on that. Appreciate it. Craig.
Describer:
Craig speaks off mic
David:
Do you have him, Mic, back there?
Describer:
Counsel Member Craig approaches the podium.
Craig Miller Supervisor, Parks, Trails, and Open Space CPNMD:
The ALCC, which is the Associated Landscape Contractors of Colorado, in their best management practices for zero scape. They say rock mulch should only be used in non crop areas. So in other words you don't grow plant material in it. You also do not use landscape fabric anywhere near plant material because it inhibits their growth and spread. And if they're going to use rock they're going to using landscape fabric. So the entire landscaping is going in already a prone to failure. Just my two cents. 48 years.
Describer:
Counsel member Craig goes back to his seat.
David:
Very good. Thank you. Craig. Thank you Directors. We'll move on to item five B that's the approval of the minutes for the regular meeting of August 20th. The Directors have had the opportunity, as I have as well, to review the minutes of August 20th. Is there any discussion, or comments, questions, concerns about those minutes from the Directors?
Hearing none is, a Director willing to make a motion to approve those minutes?
Denise:
I make a motion to approve the minutes for the regular meeting about August 20th, 2018.
David:
Is there a second?
Robert:
I'll second that motion.
David:
Got a motion on the floor to approve as written those minutes of the regular meeting of August 20th, 2018. Motion made by Director Crew, seconded by Director Merritt.
If there's no further discussion on the item, look for, well, ask for a vote when I call your name if you will affirm or state your affirmation, or denial, please.
Board Voting All Speak:
Director Rosenkranz, I'm abstaining. I was not present at the meeting. Director Froman. I. Director Crew. I approved. And Director Merritt. I. Motion Passes. Item number 5C.
Describer:
Audio fails to reach the video recording from David's mic. He moved on to item 5C but much of what he said was lost. District Finance Director, Amanda Castle approaches the podium.
District Finance Director, Amanda Castle:
Yes. Thank you for your time this evening. We have presented and prepared for the board the financial statements. As of August 31st, 2018. Overall, items are trending very well, which is good news. Property tax revenue is coming in at 99.75% of the amount accessed. So that's exactly where I would anticipate those revenues to come. And I'm excited to see those numbers.
Beyond that, the district continues to see a large increase in investment earnings, in total this year, when I add up all of our funds, I am actually projecting that the investment income will yield $330,000 more than the original budget. We've seen interest rates a lot higher than anticipated, and we try to budget conservatively, but those numbers have continued to ratchet up, which has been a blessing for the district.
Beyond that, if we look at page six, in the parks and open space, we do have 12 additions that the district had budgeted for in the amount of $100,000. Total cost came in slightly over budget. And we came in, with the projected balance for the year of $115,000 in total, we're expected to be well within the budget, within the general fund.
So that overage is no concern right now. I just wanted to point that out. Moving on, to our water fund, which begins on page ten, water service revenues and golf course water delivery continue to trend over budget. This is actually something that I've seen across water districts that I work with. We've had a pretty dry season.
We've had a lot of water usage and the numbers just continue to skyrocket. So year to date we have used 441 million gallons compared to 398 million in 2017 and 405 million in 2016. So you can see that this year we've had a very, very high, amount of usage throughout the year that's led to an increase in revenues.
And to date, we are anticipating a projected balance of just under $3 million at $2.966 million, against an adopted budget of $2.59 million. So we do anticipate quite a bit of additional revenue there. We are also anticipating additional revenue in the golf course, water delivery. That number has been raised about 9000, but we'll continue to monitor that as the year progresses.
Beyond that, you'll notice that in the Water enterprise non-operating revenue, which is on page 12, the projected balance in expenses has decreased from $7.2 million to $4.29 million. The major decrease is in the water waterline replacement line item that originally budgeted $3 million, associated with costs on Castle Pines Parkway. Those costs have trickled off for the year, and as such, we have moved our projected balance down and anticipate large cost savings there.
Having said that, if you look at the large kind of foldout pages that show the fund balance per fund and the total appropriation capacity, we're well within capacity on all our funds. And at this point in the year, we don't anticipate having a need for any budget amendment within any fund. So we're well within budget. We're seeing cost savings coupled with increased revenues, which is trending very well for the district.
Beyond that, finance has submitted all of the necessary information for the district's rate analysis to Bartle Wells. The team and I have had several meetings with them to walk through the financial statements, assumptions, that sort of thing. And we should have the final rate numbers from them within the week. So by the 21st, were anticipating the rate numbers provided from Erik at Bartle Wells.
Beyond that, we are scheduled to have a board work session on the budget preparation process next week, and the following week we will have a work session to review the first draft of the budget. So the board will see a draft of the budget relatively soon, and we'll work through all of the assumptions that go into it, answer any questions, and really go through it in detail. At that point in time.
So, if there are any questions, I would be more than happy to answer them for you.
Describer:
Inaudible question from David
Amanda:
Yes. It is. Yes.
Describer:
*Inaudible speaking from David* Sure. David’s microphone is having technical issues.
Amanda:
It's my understanding. Yes, mhm. Continued inaudible speaking from David Correct. Yes, yes.
Describer:
David realized his mic is not working and is attempting to fix it. The Staff moves to help fix the microphones and the AV crew provides a wireless handheld microphone.
David:
The request that I have for our work session. Let's make sure that we have a good chalkboard or good whiteboard. Plenty of markers and plenty of erasers. Okay. What I want to do is, is, along with the other Directors. We would like to participate in this process on a individual fund basis, one at a time, once we get.
And that may be the way you folks have been doing it in the past, but the idea there is, once we get the format down and understand how those figures flow in and out, it'll move the process, much quickly on, on the subsequent ones. All right, all right. Very good. Thank you. Directors, any other comments, questions? Concerns of Amanda of Pinnacle.
Okay. Hearing none.
Describer:
Amanda approaches the board members. What do you want a handshake? Hi, five?
Describer: Inaudible speaking from Amanda. Most of the microphones are now having technical issues.
David:
Don't get me started here. All right. Thank you very much. Amanda. Nice Job. I'm going to hold the mic for just a minute. I can feel our technical people hovering behind me to make sure that everyone on line is is hearing us, as well us seeing us we're going to, accept then, that financial report and the items from finance Director.
If I can find a Director willing to give us a motion to accept same.
Norman:
I make a motion that we accept the financial report.
David:
We've got a motion on the floor from Director Froman. Do we have a second?
Robert:
I second that a motion.
David:
Very good. Kathy is yours working? Yes. Denise's is yours working? And and we need to pass a mic. Either pass the Mic, or I can read lips.
Board Voting All Speak:
Yeah. Very good. Have a motion on the floor to accept the finance report. And the items from the financial Director presented tonight from, Director Froman. Seconded by Director Merritt. If there's no further discussion, please indicate your approval of same when called upon.
Director Froman. I. Director Rosenkranz, I, Director Crew,I, and Director Merritt, I. That being said, along with myself. All five Directors have agreed to accept financial report and the items of the financial financial. Excuse me, Finance Director, tonight.
David:
Moving on to item five D the approval and ratification of the current payables for the month of July. This is for those checks number 23803 through 23868. Specifically, these are, monies, from the general fund and, and, the debt service, line item for $71,407.97.
The Enterprise Fund ratifying $389,557.16 and the electronic payments, inclusive of all those funds,$95,364.78. Can can staff or Amanda tell me, before I look for a motion, for approving these commitment, why we don't have any approvals, as we typically do, but rather a simple ratification? Only.
Describer:
Working microphone is passed to Amanda.
Amanda:
The items that are typically listed in the items to approve are items that have not been presented to the board for signature and released yet those in ratify have been presented for signature and release. So the checks that are listed were actually signed and released. We had none that were issued from that point forward, and therefore we don't have any to approve at this meeting.
Describer:
*inaudible response from David*
Amanda:
Well it would be, the difference being our board meeting was really early and it was coupled with a holiday. So because of that, we didn't have a check run in that sequence. Exactly right. Yep. You're welcome.
Describer:
Microphone is passed back to David.
David:
It as I understand it, was a timing issue reported by Amanda at Pinnacle. That being said, the introduction of item five D as relates to the approval of ratification of the current payables, I, I submit as a, form of a motion. Hence, I will say that I have made the motion to approve and ratify those current payables.
If, is there a second on the floor? I second. Director Froman has seconded it. Is there any discussion from the board members on that item? Hearing no discussion. Please indicate your approval or disapproval of same when called upon.
Board Voting All Speak:
Director Merritt. I. Director Crew. I. Director Rosenkranz. I. and Director Froman. I. Thats a unanimous, along with myself that we have approved tonight. Items five D, which is approval of ratification of the current payables.
David:
Moving on to item action item number five. What comes after D, E that is a consideration or change order for Pinnacle. Directors you have, had the opportunity to review that change order that was presented in our meeting, last month. There's, I’m asserting Amanda that there's and staff that there's been no changes, or amendments to that that okay.
There's not been any changes whatsoever. Is is, what's the pleasure of the board tonight in that regard? Is there any further discussion, comments, questions or concerns you'd like to be on record for, share with the viewing audience or those here tonight?
Other than the sweat on your brow, because it's a very expensive amendment. We, we had a great deal of discussion in our meeting last time. About what, why and how that came about. That was all contractual. And, while there was no negotiating, that needed to be done, it was a matter of submitting same and or honoring our commitment to you.
It's with that, these Directors are, in concurrence with, with, approving same. We'll ask for the vote, the formal vote on it right now. That being said, can I get a motion from a Director that would consider, if not consummate, that change order submitted by Pinnacle in last month's meeting?
Denise:
Versus considering? Can we approve that tonight? Yes.Thats what we're here to do. Then I'd like to make a motion to approve the change order from Pinnacle.
Norman:
I'll second that motion.
David:
We have a first to grab the mic, Denise. And, and we have a second from the second guy, Norm Froman and, that has graciously accepted after considering the change order made by Pinnacle, for extra products and services rendered to the board and at the board's request, it job well done, I might add.
Is there any further discussion at this point from the directors? Hearing none, please indicate or yeah, indicate your approval or disapproval when called upon. Director Rosenkranz?
Kathy:
Since I missed the last meeting I'd like to abstain.
Board Voting All Speak:
Yes, ma'am. I understand. Director Froman. I. And Director Crew.I. Director Merritt, I, and and I agree as well. That being said, with Director Rosenkranz abstaining because of her, not, not being present at that meeting, the item does carry, and is approved. Thank you very much. Pinnacle.
David:
Item number five F, is the consideration of basin eight easement from, the entity known as MIP-KC, Castle Pines LLC, who, looks like, that is something that Jim, you're going to share with us.
Describer: Jim is now at the podium and is passed the mic.
00:46:28:07 - 00:48:14:06
Jim:
And for all the board members, just a point of clarity. The agenda will always say, consider. If it said approval, that is, that assumes that you will approve and you always have the right to not approve. And so it is a consideration of that item. Before you tonight, you have an easement document. This is for a three foot exclusive sanitary sewer easement.
This is for our basin 8 project that we've been working on for well, over a year. I've negotiated this easement for at least the last nine months with the owner. The owner is the it's the apartments behind Safeway, King Soopers. And we have a lift station there, and we have an opportunity to get rid of this lift station by connecting via gravity, the existing line that runs into the lift station will remove the lift station, take that line down and connect it into the sewer that was built in the Meritage or PA six, which is where the duplexes are going.
It's a very good opportunity to take one of our lift stations offline. It saves us maintenance costs, electrical costs, O&M replacement. And more importantly, gravity never failed us. Lift stations are mechanical. They do go out from time to time, and they're, they're not a hazard, but they're a liability for the district. And I was able to negotiate this easement at no cost to the district, which is kind of unusual.
I really thought that they would do something, something monetarily in return. I think they're at the end of the day, they're just as happy to get rid of lift station is as we are. So, you have my recommendation to approve the easement. And if there are any questions on it, would be more than happy to answer those.
Describer:
The microphone is moved from Jim to the Board.
David:
How many lift stations, then will the district have remaining after this one is rendered obsolete? Eight. Eight operating lift stations. And the vast majority of those exist, what section of the city could?
Jim:
They are spread out throughout the city.
David:
Spread out throughout the city because of our terrain. Understood. And would totally agree with you in regard to the liability, the expense and and, I've never seen one make money yet, so, I'm with you in that regard.
Directors, you had the opportunity to consider this, and Jim is rehearse a proposal, counsel you have as well. Is counsel is all documentation in order? And is it with your recommendation that if the board chooses to approve that tonight, it meets with your approval? Yes. Reported by counsel. Directors, is there any further conversation or can comment?
Robert:
Just have one question. Is there any residual amount of moneys that we could sell that lift station to someone, or how how does it work?
Jim:
The next item you're going to be asked consider is the contract to build the sanitary sewer line and remove that lift station. Part of that contract, though, is that we salvage we the district will salvage things like the radio units, the pumps, anything that my guys think that there will be a use for somewhere here in the system, we will take all that.
Beyond that, it's a basically a well-worn building and a concrete vault. I'm not for sure if there's a buyer for that, but if you'd like it delivered to your yard, more than happy to see if we can arrange that.
Robert:
inaudible speaking from Robert
Jim:
We will salvage the parts out of it so we can use.
David:
Thank you again. Item action item number five F consideration of basin eight easement from MIP-KC. Castle Pines, LLC has been considered by this board. Has also been taken under ask by general counsel and is reporting that all documentation to prove this is in order. That being said, look for motion to prove that the will of the board, item number five F, is there motion on the floor, please?
Denise:
I'll motion to say,
Kathy:
No, no, you got you got the mic. Okay. I'd like to make a motion to accept the easement deed from MIP-KC, Castle Pines LLC.
Norman:
I'll second that motion.
David:
We've got a motion on the floor to approve. We have a second to approve the motion five F, which is again basin eight easement. As noted on our agenda, action item number five F. Please indicate your affirmation when called upon by signifying, with a Yes, as loud as you can. And I'll report back to the audience.
Board Voting All Speak:
Director Rosenkranz. I. Director Froman. I. Director Crew I. And Director Merritt. I. All have voted in the I and the item has been approved.
David:
Item number five G in relationship to, Well, no. Excuse me, is a, item for the board to consider, which is a contract to approve with the ESCO for the construction of the gravity sewer. So I was right, in, in conjunction with, as Jim mentioned, the dis decommissioning of the lift station eight and the removal of the lift station eight. Has there been any adjustments, amendments, or will we or has contract been negotiated, that it is a guaranteed expense.Jim?
Jim:
inaudible speaking from Jim
David:
So there was no negotiation. And it is a guaranteed price.
Jim:
inaudible speaking from Jim
David:
All right. So it's going be it's not a guaranteed price but it's going to be an as-built is going to be for as-built. The costs have been set. The costs are guaranteed.
Jim:
inaudible speaking from Jim
David:
Sure. Who was the one that prepared that bid document?
Jim:
inaudible speaking from Jim
David:
Very good. Counsel have you reviewed this, and and, does it meet with your approval recommendation for the board to consider if not approved tonight? I have. Very good counsel. Is, reporting that it conforms and is, stands the test of, lawfulness.
Jim:
This was a question. To the non-operating section of the wastewater budget. This is a budgeted item. We've been carrying this budget for the entire year. There's $400,000 in the budget, and this bid come in at $378,732. Not a lot of wiggle room, but it gives you an idea of how construction costs continue to increase and and have over this last year, so very comfortable with the award and will still stay within budget because like I say, it's it's not a complicated project and only 16 items in the bid schedule. That's me.
Kathy:
Have we ever worked with this contractor before?
Jim:
No. We've only award two projects in the five years I've been here. And, none of them were really pipe project. No, we have not. But I've been watching this contractor. They're doing a project over in Castle Rock that's on my route home. Kennedy Jenks, check them out. They have an excellent record. And from the work that I've been watching, they do a very good job.
David:
All right, Jim, thank you for that, presentation on the decommissioning of the lift station. The removal of same. The board is considered it and is ready to take action. Is there any additional or further discussion on the matter? Hearing nothing and seeing nothing. Looking for motion to approve. Item number five G, is there a motion?
Norman
I make a motion that we go ahead and approve.
David:
Is there a second?
Robert:
I second that motion.
David:
Director Froman has made a motion to approve. Director Merritt has seconded. Please there not being any further discussion, please indicate your approval or disapproval of seeing when called upon.
Board Voting All Speak:
Director Crew approved. Director Merritt. Approved. Director Froman. All right. And Director Rosenkranz. I.
David:
That being said, we've got unanimous approval to proceed with item by five G.
Mr. Manager, I would like to ask the indulgence of those that are online, those in the audience, to give this meeting a break for five minutes, maybe ten minutes. And and, give us a chance to maybe fix this Mic situation. It please.
So it at this point, I just wanted to ask that we adjourn and will adjourn in ten minutes or or restart in ten minutes. Okay. Thank you.
David:
Okay. We're back. Live. All our mic are working. Sorry for the interruption. Thank you for your indulgence. Those that are here, those that are online. Directors and staff.
We. We're blessed with finding that loose wire. Thank you. Craig. And, so we'll continue with the meeting and hopefully, uninterrupted this time. We're on a roll here. Kim, again, the we have the easement deed and the other documents associated with that last item. You were going to, just signed and you're going to, sign off on those as well.
Describer:
Kim has issues with the mic at the podium.
David:
All right. I may have spoken too soon here. Perfect. Just say yes and sit down and wait.
Describer: Counsel member Kim Seter is now at the podium
Legal Counsel Kim Seter:
Yes, I will stand up for the next item.
David:
Very good. Let's thank you for that. I just wanted to make sure we were all on the same page. We weren't holding Jim up, and everyone knew where to sign. That being said, we are going to consider tonight as we continue this meeting.
Action item number five H that this is a public hearing for Taylor Morrison inclusion.
Kim:
That's correct. Last month, the board accepted a petition from Taylor Morrison to include property within the district. This is a fairly simple matter because the property that's being included is an abandoned right away. All of the property surrounding it is already within the district.
Typically, you would have to make a lot of findings as to your ability to serve the property and its ability, its inability to get service elsewhere and the costs associated with it. But since this is already within your district, it's a kind of a no brainer to go ahead and approve this in your packet is a copy of the petition and also at your places.
This evening was a copy of the resolution that we drafted and would propose you to consider tonight. Attached to that is a map of the property, and you can see that it's just a stripe running through the district. That was that former right of way, I believe it was not initially included in the district because it was not owned by Taylor Morrison at that time.
It was probably owned by Castle Rock. Once it was abandoned, they owned it, and now they want to bring it into the district. By statute, we had to publish in the newspaper a notice that there would be a public hearing tonight. So you'll need to open that public hearing once you've discussed whatever you want to discuss about the petition, allow anyone to have their say close the public hearing and then consider approval of the resolution, granting the petition.
Subsequent to that, we will file that with the district court and that property will be added into the district tax base.
David:
Thank you. Counsel, while you're there and having taken a look and look at this document, this is, 2.29 acres of property that the district is accepting or becoming responsible for.
Kim:
No, no, no, it is just being included in the district. So the properties within your district are subject to your jurisdiction in terms of taxing and and obtaining service. This petition is only taking that 2.9 acres and adding it within your district boundaries.
Jim:
These all become lots, the way the plat runs right now, this old right of way runs down through a number of front and backyards and houses.
David:
Good thank you, and and just because I have the mic and I have the opportunity to, I know it's out of order to fall back on a conversation in our break with Jim Nikkel.
Having much to do with the same, responsibility, of the easement we were talking about earlier going across the, the apartment site. I asked him if there was any additional responsibilities that the district was, acquiring. There's a part of of getting that made or getting that easement from the owner in Jim's report back was.
No, it was our responsibility as pipe in the pipe only. So I cleaned up that matter. Sorry for the the report, but I did want to let everybody know. Again, as it relates to this, there is no residual maintenance. There's no residual responsibility or liability for the for the district. It is a clean up item. And as Jim has just mentioned, it becomes a front yard or backyard or a side yard of the adjoining lots. And, that'll wrap it up.
Jim:
Our responsibility will be to provide water and sewer services to those properties.
David:
Of which we've already contemplated and have already been mapped, have already been well served, and is already been budgeted for. Correct? Correct. Very good. Is there some additional conversation that we haven't already had, over the course of the last month from the Directors at this time?
This is a public hearing. That being said, is there anyone in the audience that would like to be heard on the matter? Hearing none, I closed the public meeting. Directors, we have had no public comment. We've had a presentation by Counsel Seter, recommendation to, pursue the the, acceptance of this proposal. Is there a motion the floor to include this Taylor Morrison piece of property as a cleanup item and as represented by those that I mentioned earlier.
Robert:
I make a motion to approve the Taylor Mower Morrison inclusion.
David:
Is there a second?
Norman:
I second that motion.
David:
We have a motion on the floor by Director Merritt, seconded by Director Froman. The other Directors have indicated there's no further discussion on the item necessary. That being said, I'll call for the vote. Please signify by, saying yay or nay when called upon.
Board Voting All Speak:
Director Rosenkranz. I. Director Froman. I. And Director Crew. I. Director Merritt. I. Director McEntire is in agreement with his fellow Directors. The motion is passed. Thank you very much.
David:
As we move on to item five, J. This is considering funding for the PCWRA, a 3 million gallons per day capacity expansion work package number one, and the funding for the afore entirety of Castle Pines North Metro District portion of the project.
Again, let me remind the board this is for consideration only. I know that there's been a lot of work and a lot of effort made by staff to generate documents as requested in the September meeting. Having received those, want to say thank you for that information, albeit it was fruitful. I'm confident that this board is laced with some additional comments, questions or concerns that they would like to bring before, the presenter, Jim, you're going to present that item along with guests here in.
Jim:
Yes. In fact, when you're ready, I would just go ahead and introduce James Mann with Ellers and Company. I put before you the pre-sell letter that his firm prepared, and I believe he has some additional information for you, or if you have questions that you would like answered first, I'd be more than happy to entertain those.
Describer:
James Mann approaches the podium.
David:
His responsibility is what to this board?
Jim:
Ellers and Company are your financial advisor, and what they are looking at is what it will take to fund basically a $5 million, revenue bond or loan.
David:
Before we get into the financing aspect of of that, the I would ask Directors if they have any questions about the project, globally. Director Rosenkranz, are there any questions you'd like to ask? Jim and or well, Jim, before we get started on this presentation.
Kathy:
I don't this has been ongoing since I've been on the board, so I'm fairly well informed. Thank you.
David:
And without putting you on the spot, I'm going to do it anyway. Could you articulate for the new Directors, your understanding of, of, of this project and more particularly why we're doing why we're pursuing this additional expense? Do you mind?
Kathy:
I'm not sure I can, expand a more than what Jim's already sent out in memos and meetings, but, yeah, it's it's part of the process of when we belong to PCWRA that when you need expansion and there's a good time to do it, you participate. And it's written in the. Yeah, it's been documented that we will be participating. So I think Jim's done a pretty good job in memos and emails explaining why we need to do this.
David:
Just and I appreciate that. I just want to make sure there wasn't maybe a nuance from Directors perspective on the project that we did not benefit from knowing and understanding. And having been reminded that this is a project that's been underway for 18 months, I will tell you that it hasn't been underway for 18 months, as you well know, with this board.
And so, just trying, reason for my question is to try to get up to speed as quickly as possible. And if there was some nuance that you want to share with us, you had the opportunity to do so. If you were going to lean on what Jim has is presented as we are, I'll then, tell you, thank you, and ask the other Directors if they have some questions at this time of Jim.
Robert:
Okay. Mr. President, before Jim walks us through his presentation on this, some clarification for viewing audience would be helpful. And, Jim, if I understand you correctly, at our last board meeting, you proposed that the PCWRA would deliver the wastewater infrastructure and the capacity improvements in two phases in two phases. Is that correct?
Jim:
No, that's not correct. This is a this is all single phase project to produce 3 million gallons per day of additional capacity.
Robert:
Okay. Would you please describe the proposed scope of the, of what you wish you would get approved?
Jim:
Yeah, the scope is, and maybe what what led to the two phases is that there are two components in the financing of this project. So there is 3 million gallons per day of additional capacity that is being proposed.
And our districts Castle Pines North would take 13.82 or .86% of that capacity. The balance of that capacity Castle Rock is going to take. And then the cost of the project is divided on a pro-rata share and on the amount of capacity you're taking, minus the amount of the improvements that actually should go back to or become the responsibility of all ratepayers.
And in our case, there's about $550,000 of cost that are associated with existing customers, and that is for improvements to the systems at Plum Creek, that deal with not capacity but future regulatory requirements. And because there are regulatory requirements and not additional capacity, the way all the members have looked at that is those costs should be borne by customers.
The capacity component, which in our case is about $4.5 million, $4.4 million in round numbers, should be borne by a growth. New connections, new tap fees is where that revenue should come from. That additional capacity cost should not fall back on to our existing customers. And maybe that's where you come up with two components or two phases.
Robert:
That's correct, because we saw a couple different numbers and it was like 1.9 million, but then the total loss was so 5 million. But we didn't talk about that.
Jim:
There's also a request to take down $1.9 million of funding at this point in time to be able to partially fund the project. And that's that's our district share. Castle Rock is putting in their pro-rata share of that amount, as well as Castle Pines Metro.
So that we can have funding available to pre-purchase or go ahead and be able to purchase certain equipment item and some steel items concerned about cost rising as well as tariffs on those materials.
Robert:
What would be the completion date of the back end of this project?
Jim:
Back end a completion date on this? If if we joined tonight and if we don't, Castle Rock will pick up the rest of the the balance of that, that capacity we’ll simply participate in the deal to the tune of, about 500, $550,000 for upgrades with no additional capacity.
And at some point in time, we're not able to provide any additional connections to the system. It has not been bid yet, but I would say completion on this project, once it's ready to go out, you know, it's not going to get a bid. It will go to an award because we've already brought a contractor. We went through a bid process or really an RFQ RFP process to bring a contractor on board, to have him work with our design engineer so that we can see cost savings from their construction ideas.
But once they're given notice to proceed, I would say this is probably a 20 to 24 month project.
Robert:
Given that it's a two year project, why wouldn't we consider and it's a little bit late now for the first portion. I understand the $1.9 million. Why wouldn't we consider a Geo bond versus a revenue bond that stated a revenue bond goes around Tabor, but a Geo bond would also be more cost effective. Correct.
Jim:
This is a very small ask in this case. And we're out of an election cycle by two years. So we would not have an opportunity for another two years to go out to our electorate because we just had a Geo Bond.
Robert:
Yeah. It's May of 19. Correct. That's when we would be able to…
Jim:
19 the next opportunity. And the only way to to the way this project is structured is all participants have to escrow in so that the funds are available to actually go out and award a contract.
Robert:
I understand all that. But since we've been talking about this for 18 months, we've had that almost two years. It was never considered to for lesser financing or a cheaper way to finance.
Jim:
It was not because, again, it's a small amount of money. We're only talking $5 million. The difference I compared to $49 million for renewable water. It is relatively small amount of money.
Robert:
Is there any other opportunities for financing other than in revenue in your estimation?
Jim:
I think Mr. Mann tonight will probably talk to you about either a commercial loan or those opportunities or a revenue bond.
Robert:
Okay, that's all I have. Thank you.
Norman:
Can you, go over it looks like most of this, expansion will not be for us. It will be mostly for the city of Castle Rock. That's correct. Is that correct? That's correct. But what will we really be gaining out of this.
Jim:
15.82% of 3 million gallons per day.
Norman:
And how are we going to use that?
Jim:
Primarily we're going to use about 77% of that, you know, for the Lagae development. Right now, we run about 65% of our capacity that we currently own, and we still have additional infill here. There are lots at King Soopers Center that are open. There's a lot down west of Walgreens. There's ten acres right across the street here that's currently being looked at at 200 apartment units.
That's how we use up our existing capacity. That was all part of that original plan. But once we included Lagae, the capacity that we owned at Plum Creek wasn't sufficient for Lagae. It was anticipated that at some point, Plum Creek would expand capacity and that we would participate in that project. And that was written right into the inclusion documents for the for the Lagae property.
Norman:
Okay. Thank you.
David:
Jim, for the reference you made to our design engineers. You lost me there. Help me. Who is ours?
Jim:
Well, ours is. I'm speaking on behalf of Plum Creek as as a member of Plum Creek. PCWRA is actually whom engaged those design engineers with approval of that board.
David:
Who is Plum Creek? What does the governing body look like? And I'm sure you know who's party to that. Could you help us out there?
Jim:
Yeah. There's three members to Plum Creek. That's our district, Castle Pines Metro or the village and the town, Castle Rock. There are two special connectors, which is Castleton and Silver Heights. But they do not own anything. They are simply special connectors.
David:
They generate revenue. They do generate revenue. And and the so the ownership is, is of three and and the current ownership, percentages is that of what we see in the construction escrow agreement as well.
Jim:
No, that is only for the three MGD of additional capacity.
David:
Do you know what the current ownership structure looks like?
Jim:
Yeah. It's a yes. I'm trying to recall what the monthly sheet looks like, but we are probably 30.
David:
Well, let me make it it's the same three members?.
Jim:
It's the same three members, but they don't own equal. Okay. They don't own equal in the, capacity. The current capacity for town of Castle Rock by and far owns the majority.
David:
And none of that is going to change either in ownership or capacity or or processing. None of
Jim:
This is outlined in the established.
David:
And anything subsequent to this is is yet to be determined by those in need. If there is a need, or if there's a capacity for or an improvement to accommodate. I mean. Is this is is this one of a multitude of expansions and upgrades to that plant, or is this a first?
Jim:
There will be multiple upgrade to the plant over the life of that plant. In terms of additional capacity, it will the capacity that we would purchase, in this go around will suffice for our buildout, as we currently know it. In other words, if we were to go out and include additional property in the district, we would have to take a look at our capacity that we have versus the capacity demands from that new development.
But as we know things today, this will be the last time this district would participate in additional capacity. They say we will have additional upgrades and improvements to that plan over time. Laws and regulations are constantly changing.
Norman:
In the event, what is your relationship to PCWRA?
Jim:
I represent this board on that, that board.
Norman:
You you're an actual member of that board?
Jim:
I am I am a member of that board.
Norman:
And it is that a paid position?
Jim:
It is not. Well, the district gets pay $100 a meeting, I do not get paid for that. The district get paid for that.
David:
Does the district have a delegate as a follow up? I change my train of thought. We'll come back to it. But, you're the only one that serves the district in this capacity.
Jim:
In my five years, the district is never appointed. Well, actually, I take that back, Kathy. You're. You're my back up for the PCWRA meetings in five years. I've never met anybody thats wanted to go the wastewater plant on the fourth Tuesday of the morning at 7: 30 in the morning.
David:
As a follow up to the initial line questioning I had. And, regard, having to do with, kind of sizing up this, the capacity of the current entity and, and, this expansion, you said that this is the last time that this district unless it expanded its horizons or its boundaries would need any additional, services, taps for services.
And you're sure of that? Make believe that you overshot that by 20 taps? Yep. I have to believe, wouldn't you, that, given the other users on online, that there's value to those and could be sold at some point.
Jim:
Potentially, there's a possibility, actually, the village will end up with a little excess capacity, even at the build out.
And without them participating in this, Castle Rock, at the rate that they continue to grow, I think they'll hang on to everything that they can and, like, say, if we choose not to participate at this point in time, they will fund 100% of the expansion and take all 3 million gallons per day of the capacity they estimate that will get them through the next 10 to 15 years before they need to look at another expansion.
So that would be the next expansion opportunity, because it doesn't make sense to go in and expand a plant for 400,000 gallons a day.
Norman:
How much extra wastewater will actually be generated from the expansion?
Jim:
I'm not for sure what you mean by extra wastewater.
Norman:
Well, how much additional?
Jim:
Well, we as houses come on line. This will take us to, I want to say about 1.1 or 1.2 million gallons today.
Gallons per day at build out. All those are our return flows, minus our obligations on the augmentation. So it will produce additional return flows.
Norman:
Well, I guess we're talking you're talking sewage, and I'm talking actual water generation.
Jim:
Well, this plan doesn't generate water. It generates wastewater return flows. It's a wastewater plant. It's not a water plant.
Norman:
Are we going to get more wastewater for the golf course or anything like that.
Jim:
We will actually end up with additional return flows that will be able to put into Chatfield. Okay. The golf course is pretty well maxed out unless they to unless they're going to expand. They take pretty much all the more water they need. And it's like growing rice up there anyway.
So any additional return flows as those additional homes come on line or return flows that belong to us, and we either put them in a storage somewhere and use them, or we lose them.
Norman:
Is that going to be part of our storage in Chatfield?
Jim:
It is intended to be part of the storage in Chatfield. Don't think of it as wastewater at that point though. Think of it as stream flows.
David:
Heck of an investment. 5 million bucks. James. Sell it to you today for seven and a half. Sold. Welcome. Happy to be here. You have the floor.
On Screen: Jim Mann approaches the podium
Jim Mann, Ellers and Company:
Again my name is Jim Mann. I work with Ellers. We've been the district's Independent financial advisor for a number of years. You have before you a question of funding the Plum Creek wastewater plant expansion.
The portion of which that falls to the mat district is approximately $5 million. The document that we put together is a standard pre-sale report. There's a couple nuances that I want to cover with you, and a couple questions that I have for the board as you, consider making a decision one way or the other. We've pretty well covered why I'm here in terms of the plant expansion and why it's being looked at today.
It just the expansion does provide you the capacity that you need to continue building out the, the Metropolitan district also provides some access that if redevelopment opportunities do present themselves, that you have capacity to, handle, those redevelopment opportunities. So with that, we sized the issue out to be $5,420,000, and that was based on a revenue bond.
In revenue bond is, as was alluded to earlier, a slightly less attractive investment, compared to a general obligation bond. The difference between a general obligation bond and a revenue bond is simply that a revenue bond, you are pledging a certain revenue stream. In this case, you'd be pledging the wastewater revenue, sewer revenues, whereas a general obligation bond, your budget, your ability to levy taxes on all the taxpaying properties within the community.
So there's a slight variation between the two. A general obligation bond is viewed by investors as a slightly more secure form of investment, because it is a tax backed pledge. It does require voter approval. So it takes a little bit more effort to actually get it approved, a revenue bond. While is it is slightly a lesser form of debt in terms of its security, it's still a very secure form of debt, provided that the revenues are coming in for making the payments.
And the difference between the two when it comes to interest rates usually is in the 25 to 35 basis points range. Sometimes that spread gets quite a bit more. But right now we're seeing those spreads relatively tight. So there isn't a real penalty to sell a revenue bond versus a general obligation bond. Where some of the differences come in is that when you issue a general or a revenue bond, most of the time you are in a position where you have to also fund a debt service reserve account, and that debt service reserve account is calculated based upon, three tests, one being 10% of the amount of the bonds, one being 100%
Of the max principal interest payment over the life of the bonds, and the third being 125% to the average periodic debt service over the life of the bonds. We're looking at issuing that for a 15 year period. The majority of these payments are going to come from connection fees associated with new developments or new connections to the system.
It's anticipated that the majority of those connections are going to occur over a ten year period, barring any hiccups in the economic growth that we're seeing right now. So that's why we took a more conservative tack and said, let's pay for this over a 15 year period so that we can make sure that those revenues are actually coming in and not set ourselves up with payment structure that we might not be able to keep up with, because we really are counting on those connections to actually pay for this expansion, because essentially the expansion is being caused by these new connections.
So that's that's the reason we're looking at a 15 year and the reason we've structured it, the way we structured. Another aspect of revenue bonds, if we actually issue bonds, is there, from a issuance expense perspective, slightly more expensive than if you issue general obligation bonds, or in the event that we would go to a commercial bank and issue a commercial loan that's even typically cheaper than if you actually issue bonds.
And one of the items that we have included in there is we have the ability to do either issuance of a revenue bond or go to commercial banks and see what kind of deal we can get from the commercial banks as opposed to doing a full blown revenue bond sale. Difference being as sometimes you will see on a, a revenue bond basis.
On a competitive nature, you may see a more attractive interest rate versus the what you might be we get out of commercial banks. There's a break point because you've got higher issuance costs. You can of your your interest rate may be lower on the revenue bond. Whereas if you go to a commercial bank, you may have a higher interest rate, but your issuance costs are going to be less.
So there's going to be a balancing point in between there. Try to hit a target and to make sure that one is going to be the cheapest alternative. One of the roles Ellers plays as your advisor is he gives you the best financial advice that we can give you, in terms of trying to get the best deal that we possibly can get for you.
That's our role, and we have a fiduciary responsibility to give you the best advice that we can give. So we put this together, basically as a worst case scenario, in terms of if you had to actually go out and issue the revenue bonds, this is what it would look like if we can manage to and if it's the direction for us to to look at, issuing through or going to commercial banks, we can do that as well and probably end up issuing less than the $5,420,000 worth of bonds in issue as a a commercial loan, as opposed to a full blown revenue bond.
We did include in here that there would be early call provisions so that any event the development occurs faster than what we anticipate. You're able to pay the debt off more quickly. There is typically a call protection period where we're not able to pay it off for a 15 year issue, that's going to be somewhere around 7 or 8 years.
If we shorten that up further, there tends to be a cost to that in terms of the interest rate. But we can explore that as we're working with any of the commercial lenders that we would look at, and going forward. But so that's the basic structure that we've looked at. And so again, it really falls back to you folks to determine a whether you want to move forward with the project.
And b, what type of financing would you prefer to do? We would recommend that regardless of whether you do a commercial loan or whether you do a full blown revenue bond, that you insert a competitive nature into it so that we're going to be seeking multiple proposals from different parties, because that's the way we feel that you're going to get the best deal that you possibly can get.
Because, you know, I don't mean to steal lending tree scams moniker, but when they compete, when financial institutions compete, you're going to benefit from that because they're going to sharpen their pencils that much more. And so with that, I'll answer any questions that you have.
Robert:
Can you walk us through the liability if the taps don't come online as it's supposed to?
Jim Mann:
If you issue the debt, you will have issued, and have made a promise to pay. So regardless of whether those taps come online, it would be the responsibility of the, the, the district to make the payments on the revenue bonds. And in this case, we're pledging the wastewater utilities primarily as the payment source.
So in the event that the taps were to not occur in the timeframe that we've anticipated, it would fall to either the other sources of revenue that the district has or the ratepayers to make payments until such time as those taps actually occurred.
David:
The what you call them issuance cost? Yes. And the difference in in my experience, has been between the two has been as much as north of 200 basis points, on issuance cost. Bonds being 3% at times and personal loans negotiated under one. Don't know what it's doing these days. But if we're talking apples and apples, would seem like that.
And with the opportunities that exist with the commercial loan being, less than the bond obligation. Whats is it that the commercial loan has, some, some, additional teeth that the district wants to be concerned about because it kind of leaned in that direction. But how would you add to that?
Jim Mann:
Typically, no, there isn't going to be any additional teeth that the district should worry about. There may be some additional scrutiny from the commercial bank or the lending institution versus the, going through a revenue bond difference being as it will go through a revenue bond.
We're actually going to prepare or have prepared an official statement which is going to answer all those questions. Whereas if we do a commercial loan, it's typically done more on an offering document, which is something less than the diligence required to put together, an official statement. So there's again, there will be a balancing in between those where we're going to have to do some more work internally versus having on counsel prepare an official statement.
And and so that's a trade off in terms of some of the issuance costs, because while we're we will still be required to have some legal opinions. You won't go through the process of process of actually producing an official statement, which has a cost of anywhere in roughly $25- $30,000. You may give up some of that in a higher interest rate from a commercial bank, but you're going to save it on the issuance costs.
I mean, that's the balancing act that we need to get to in terms of looking at what's going to be the best deal for the district.
David:
Understand, and in no cases are going to be prepayment penalties right?
Jim Mann:
There will be no prepayment penalties, but there will be a period of time where there's a call protection where you're not able to prepay the debt. And typically that on on a on ten year, the standard on a ten year is about seven years. We have seen with the elimination of advance refunds, from the federal tax law change this past December, that underwriters and financial institutions are more willing to allow a shorter call simply because they lost out on part of a market share.
So even on the 15 year, we'd probably be looking at 7 or 8 year time frame.
Denise:
I have a question. When you fund this, whether it whether it's with revenue bonds or with a commercial loan, you're making the payment on the balance. Or are you looking at taking out the full loan amount and then pay back the full with the with the anticipated wastewater revenue?
Jim Mann:
If I understand the question correctly, we would take out the entire full amount of the loan and be making principal and interest payments on that from revenues of the the district, including the connection fees.
Denise:
I just wanted to know in when when you take out a loan, if you're not using the first issuance of this is $1.9 million, are we going to take out a $5 million dollar loan and issue that?
Jim Nikkel:
Not not from loan. The first 1.9 million we're taking out of cash reserves. Then we want to take out the loan so that we can fully fund the balance of the project and pay back our reserves, because if we put in $1.9 million into this today and lift station three blows up tomorrow, you don't have reserves for that.
That's why I want to or my my proposal to you recommendation to you is to borrow the full project amount and pay ourselves back.
Denise:
So that we are not going to deplete our reserves.
Jim Nikkel:
We will not deplete our reserves that way.
Jim Mann:
And I think, to clarify the other point that I thought you made, it would not be a construction draw loan. You would take the entire principal amount at one time. You would be able to reinvest that. And right now everyone's IRAs are happy. But investment rates have come up, so it's much closer to the interest rate that you're going to be paying on the bonds.
It's not going to be the same, but it's not like it was a couple of years ago where your investments were earning, you know, ten basis points and you were paying 3%.
Jim Nikkel:
So our our money as well Castle Rocks and Castle Pines Metro, while being in an escrow account, it will be interest bearing. But because it's an escrow account, I don't think we're going to see like we went and bought a CD with it. Its.
Jim Mann:
They'll invest it and and I would
Jim Nikkel:
It’ll it'll be a call a trust account.
Jim Mann:
It will accrue interest. And if at the end of the day there's funds left over that will come back to the district.
David:
Directors. Any other questions of James?
Robert:
Can you address the re offering premium?
Jim Mann:
In the bond market for whatever reason, and I can kind of explain it, sometimes a bond purchaser will give you more money than you ask for. And in exchange for that, they charge you a higher interest rate. And the reason that they do that is because they're bringing bonds into their portfolio, and they're hedging against a rising interest rate environment, where all of a sudden their investment is no longer as liquid as they would like it to be.
And so then it hurts their portfolios. So in the case of what we've shown here, we've shown for the most part, 4% coupons across the 15 year period. Those coupons have a re offering yield that is closer to what the interest rate actually is. And that difference generates a premium. And that's the amount of money that the bond purchaser is paying you extra.
For that higher interest rate. And so you're getting cash upfront that we then utilize to basically bring the overall financing down. It's a it's an investment strategy. I'm a simple you know, I'm a simple guy. I don't ever want to have to pay more for something than I really think it's worth. But investment people seem to like to pay up to hedge the bet that at some point in the future, interest rates will will rise and they will no longer be able to sell that investment without taking a loss on it.
And it's just a it's a it's an interest rate hedge.
Robert:
Very good. And that comes to us at a cost of $270,000 it looks like.
Jim Mann:
It doesn't come as a cost. It comes in as a money up front.
Robert:
Right. Okay.
Describer:
Board members discuss off-mic.
Jim Mann:
If if you look at page, you know, the first of the spreadsheets.
David:
Okay. I'm there.
Jim Mann:
We we have total costs of needing to fund the entire project, including issuance expenses, debt service reserve, project, fund of $5 million, and rounding. Because, unfortunately, we always issue in $5,000 increments. So we always have to round. So to generate all the dollars necessary, you're issuing with so $5,689,000 worth of expenses. You're issuing $5,420,000 worth of bonds, and they're paying you an extra $269,000. That's the real offering premium. That's the the additional dollars they're giving you upfront so they can charge a higher interest rate. And thats.
David:
And the difference in the interest rate is how much? At this point. What would it be?
Jim Mann:
The interest rate right now. And the way we have this structured your interest rate is about 3.3%. Blended rate. You're paying 4% coupons upfront. And then three and a quarter at the back end. The exchange is the $270,000 up front for paying a higher coupon over the life of the issue.
David:
Understand. Thank you so much.
Jim Mann:
So the good news for the district is if development happens faster and you can pay off the bonds faster, your effective interest rate drops because you get your cash upfront and they're taking theirs over time.
David:
Understand we're talking about 75 basis points. The difference between three and a quarter and 4%. But we get to play with a quarter of a million bucks. As long as we don't prepay that within, and we're generalizing here within seven years everybody's happy. I would like I don't have any more questions for James, or Jim, who would like to try to formulate a motion for the board, if you will indulge me.
James, I'm sorry. Correct me if I'm wrong. I'm looking at your September 17th memorandum and in same, it indicates that, Albeit Jim Nikkel has, expressed or implied it, that this is a quick trigger or Castlerock will take the lead.
Jim Nikkel:
Just one point of clarity. The quick triggers on our first $1.9 million.
David:
And while I don't know exactly what the schedule of that would trigger is, let me, let me let me see if I can pull it all together.
Because because while there's a conference call with rating agency in the next 30 days, this board is going to be, put in a position, is the goal to award the sale of these bonds, if that's the direction we take on October 15th. That being said, I'm not comfortable with the information that that myself and my colleagues have.
In order to move forward tonight, however, I think I can, in the form of a motion, to, accept would would be something like, I make a motion to accept the funding of action item five, J.
With the following conditions. That Pinnacle prepare for this board and the staff a simple cost and revenue exhibit on not only starting at the top our our cost. And I'm going to generalize here 5 million bucks. But the next one would be a reduction of that 5 million by 1.9 to replenish our, our cash and every other cost thereafter until, the, the use of those funds is being completed.
And then next to that or however you choose to exhibit it, the revenue associated with the tap fees and any of the ancillary, minor but important costs associated with the rate and fee structure being contemplated moving forward. If it's a part of this payback, in other words, a single sheet that that, simply itemizes what the costs are and what the payback looks like and from whom. And that's something that Amanda, I have to believe, given the longevity of this subject, and the and the budgeting over the course of the last couple of years and all this exercises that this district and you all have been participant in.
That, that's something we could do over the course of the next handful of days or less. I see her head bobbing up and down in the affirming way. And and so I would ask that that, that we, that we consider approving this, only upon which time we receive have the opportunity to receive that information from Pinnacle, review it and that we're satisfied with the outcome of that review.
The second condition would be that, and by the way, Amanda would also want to include a timing element as well, on those tap fees, you know, albeit we have a seven, but projecting a seven year window, if you want to immediately take a position that, the first I don't know how you guys have done it in the past as it relates to the budgeting and forecasting cash flow, etcetera.
But I want to see how that is all going to lay out. Okay. And and as simple as you possibly can, no acronyms. And if there's an acronym, spell it out. I want to just make sure that everybody is is, it seems to be a real simple deal. I want to make sure that we all understand it.
As, I believe, we have the opportunity here, and then, I want to know the difference. Amanda, if you could articulate that on one each page, if necessary, one with the commercial bond for the commercial lending and the other one with the bond. As a source of, of, our borrowing. So with that single condition from, the folks at Pinnacle also would want to have, counsel, affirm, to the board, within the same time frame.
Their recommendation, after review of that document as well, to move forward, noting, of course, that, the documents are in order and there's no conflicts of interest. There's no other hankie panky that someone might perceive that we didn't double check. Please, sir.
Kim:
Yeah. Mr. President, I think what you are talking about is actually what would happen before that October meeting. So tonight. And correct me if I'm wrong, but, you're just being asked to approve moving forward with investigating either a bank loan or the revenue bonds. Then, Mr. Mann will make a recommendation as to which financially makes the most sense. In the meantime, Amanda can be preparing that other internal document for you. Then in October, what would come before you will be a bond resolution or some kind of a loan resolution that has to be approved by the board, containing either tight parameters or the actual terms of the loan, and you would then approve or disapprove it at that time.
As part of that process, we will be required by the borrower, whether it's a bank or if it goes through some investment process to provide a legal opinion, which we will provide to you, that we have ensured that you have done everything you need to do to to keep this process legal. All notices have been taken care of.
All conflicts have been disclosed. And we provide that opinion to you as well as to the investor. So we're kind of putting ourselves on line for that. There may be I don't think there would been any requirements for the accounts to give any kind of opinion, but along the way, they're going to be making a lot of representations that, you know, they're attracting some liability for as well.
But I think everything you described is actually part of this process. And tonight, what you're really being asked to do is to pull the trigger for Mr. Mann and Mr. Nikkel to proceed to figure out what they would propose to you as the best option and to pin down some of those numbers. Then in October, you'll have a document that we will prepare that will lay out all of those parameters.
And in the meantime, you can have back up from Amanda saying, here's how, here's where the money will come from to to meet the requirements that are in that resolution.
David:
Appreciate that, counsel. I, I was unclear as to whether or not there was a need based on, as I said, the, the, conversation that, Jim, that we were having and, the immediacy or the sense of urgency on our cash as it related to, that Escrowed $1.9 million.
But if indeed that is not at issue for the next 30 days.
Jim Nikkel:
Not not correct. As I pointed out, the last meeting, we need make a decision if we are in the project or not, and I need to report that at the next PCWRA meeting, which is next Tuesday morning. If if we are in the project and we need to fund our $1.9 million of escrow so the project can move forward, those early purchases, if not, if we're not ready to perform, then I assure you Castle Rock will simply move forward the full 3 million gallons per day of capacity.
David
And our agreements with them allow them to do that. They do. All right then. Then it's really simple. We, Jim, we're all three right? We need to get after it. Okay. This board has until the deadline of next Tuesday to consider. Best I know, will make themselves available for that review that I'm asking for, and it's not just how we're going to pay it back through Pinnacle.
As it's been contemplated and calculated, compiled for years now, it's it's what that total cost is not to exceed replenishment of cash. Here's how it's going to be spent. And here's how we're next to it, how it's going to be paid back. And when. We've got to believe we can do that well, within the timeline of between now and Tuesday. Amanda, what do you think?
Jim:
Just so everybody is clear, the deadline is actually Monday because we meet at 7:30 in the morning and it will call. We will need a special meeting in order to take action.
David
The the. You in a position Amanda to to generate what the board's looking for this week?
Amanda: Off-mic
I am not no unfortunately.
David:
Are are you do have a desire to, have further conversation with your firm, and whomever within that firm principals, etcetera, tomorrow morning to find out if that's possible before you give us your final answer?
Amanda off-mic:
I can absolutely ask the question.
David:
And, what time will we know what the answer to that question is?
Amanda off-mic:
I think, ........I think I have to contact of Bartle Wells, because Erik is going to have to run it through his rate model. So I'll reach to him in the morning and see what that looks like. That’s the biggest thing that he is going to have to take assumptions, that .... and run them through rate model. To provide the information, necessary. I, I'm going to have to ask Erik about that.
Describer:
Inaudible speaking between the board members.
David:
Mark. Is the, he's the president of Plum Creek Water.
Jim:
Mark Marlbor is Yes. Okay.
Robert:
Can that be pushed back? What's the deadline? What's the cause for next Monday?
Jim Nikkel:
The, there's a guaranteed maximum price that's already been provided by the contractor on this equipment based upon a date to pull the trigger. That our payment is $1.9 million.
Robert:
This is why we're having difficulty. Because we're put in a position without all the information and liabilities and. Understood.
If we did it correctly again, it might have gone to a geo or something. We could get with less financing. That's what is troubling to this board.
Jim:
Well you don't have an you don't have an opportunity for a geo because of the election cycle.
Robert:
Right. But when was first thought about when this should have been brought up initially, that's probably the way it would have been funded for a lesser rate. But and now we're at the last minute and this board has been put in this position a couple times now. In all of my time. Where it's the last minute trigger and we have to do it.
Jim:
In all of my conversations with the prior board prior to May, there was never a desire to finance this under a Geo Bond. I'm sorry if you feel that you've been put under pressure. But understand that we're only one party of three that are in this deal, and I presented this information and this desire of the other parties to move forward just as quickly as I had it.
David:
If it just because thought popped into my head. This project had nothing to do with the renewable water ballot issue A?
Jim:
Not one thing.
David:
Okay, well, my motion remains. And and and today's Monday and we have till Friday, we're going to look for Pinnacle to provide us with that simple map. I think, I don't think I'm oversimplifying it, but I understand the responsibility and the liability that they have in order to produce what we're looking for. Kim. Well, how do you feel about your part of it by the end of the week?
Kim:
I think we can pull our part together because it'll be more, the concern about future board actions, so I'm not too concerned about that. I also think with regard to what you're asking for, Mr. Mann has, a financing model, that with Amanda's help, they're working together, that they can probably flesh out a lot of what you're looking for, because he's already done a model that talks about the tap fees and the projections of when they're going to come in, and Amanda can then feed back into that.
So, you know, I hate to speak for others, but it's it's possible to get this done.
David:
Thank you for that. And, James, if you can help, Pinnacle, while we've got it on your letterhead, we're looking for it on their letterhead and are going to expect to see that before this week's end. I made a motion to move the process forward.
On the condition that this board reports back, that it is comfortable and is giving the folks, Jim, that that we've given you to work with and that you have, to work with to the end of the week to get that to us, know that this president is available to you, all week, but I'm available and I can I will have conversation with, the Directors as I'm giving the information.
Kim, correct me if I'm wrong. If we're able to pull this off on Friday and I report back to you that the Directors are comfortable in moving forward, is there, or in, in acknowledging or whatever the appropriate terminology is on the motion that I made tonight? If, if we're comfortable with the motion come Friday, is there anything that we have to do formally other than to share that information with you?
Kim:
The board should do one of two things. Either set up a committee or, authorize one of the board members to approve moving forward, with preparing the documents to approve at the October meeting for either a loan or revenue bonds. That would be one option. The only other option would be to schedule a special meeting for Friday evening or Saturday or something like that, so that the entire board can, can make that final decision.
You can't be having any conversations and decision making among board members going on outside of a public meeting. So it's either authorized one person or a committee to make that final decision, or schedule a special meeting.
Describer:
Inaudible speaking between board members
Robert:
And we have 72 hours for any particular. We have 72 hours for a special meeting on Thursday. We're just covering our basis. We made our decision that whether it's going to a special meeting or a elude to a member. Thursday night, 6:00.
Denice:
I don't have a problem delegating a committee. She continued in audibly. Okay.
Describer:
Board continues discussing
David:
After discussion with this board, Kim, I think, Do we need a second on the motion? First part of business. And then, how do we proceed with forming that committee to work with staff and and or our consultants through the end of this week?
Kim:
I think, number one, your motion is really direction to Amanda and Ellers to prepare that information.
To think you've done that as long as they understand what you're looking for. Then, secondly, you have the power to go ahead and appoint that committee. Then third, you need the motion to authorize that committee to review this information and then do two things. Approve the payment of the 1.9 million into the escrow for, work, work project number one.
And we we should go ahead and approve this agreement, provided that the committee decides to go ahead. And then, secondly, the committee will choose which kind of loan to move. Actually, we don't need to do that. Whatever comes before you in October, you're going to approve then. So you're really looking at the committee to review this information, decide whether you're moving forward, and if so, approve the agreement that's coming up next.
The, what's it called? Work package number one escrow agreement. And make the payment into that escrow.
David:
All right. Then then, I'm withdrawing the motion that I made earlier on item five, J. And, replacing it with, a motion to consider further, consider the funding, described in action item five, J contingent upon formation of a committee of board members made up of myself and Director Crew. With a specific responsibility and authority to.
And after consideration of the information asked of counsel of Pinnacle, as well as, Ellers. To be authorized to authorize this district to place in escrow the $1.9 million as required by or as detailed by the work package one construction escrow agreement, and whether it's before or thereafter, approve that same agreement. And lastly.
Approve the direction financing to the either that the bond issuance or commercial loan. Is there a second? Ill second. There's been a motion on the floor made by Director McEntire, seconded by Director Rosenkranz. Is there any further discussion? Director Merritt?
Robert:
I would just like to add, I think we should tentatively set up a tentatively set up a special meeting for Friday for a fall back, if anything. So we can make this go through.
Is that, does anybody think that would be a good idea? Say things. Something happens or so and it can't be approved. We can make, And then we have quorum on Friday. Yeah. And so, so we have a plan B. I'll leave that to you guys.
Robert off-mic:
Inaudible speaking between the board and counsel
Robert:
And we can also cancel the special meeting. Kathy said, but just to have a plan B, so this important matter just not get dropped.
David:
I motion on the floor, to consider this with the conditions that I've itemized. After further discussion with the Directors, there's a second, I'm going to call for a vote on that motion. If this board wants to direct staff to publish a notice for special meeting on Friday, as a fall back, as Director Merritt has articulated.
I'm in full agreement and prepared to do, Jim. But at this point, I'm going to call on the Directors for, and ask that they signify by a yay or nay to approve as it was, motioned action item five J.
Board Voting All Speak:
Director Rosenkranz. I. Director Froman. I. Director Crew I. Director Merritt I. Motion passes. Game on.
Jim:
What what what time would you like to post the special meeting for?
Describer:
Discussion among the board members
Jim:
It's it's it's important Because if we're going to do it at 8:30 tomorrow morning or Friday morning, then by 8:30 tomorrow morning, we have to have the notice up. So, I, we need to know.
David:
Do we start at 8:30 here round here?
Jim:
We start at eight.
David:
Can we get that done? Janet? Can we get that? Yeah.
Do it please.
Jim:
So 8:30 Friday morning? Please, sir. Okay.
David:
All right. We're on to, agenda item number six, communications report. I been, given the responsibility to let everyone know that our Communications Director is not here, that he is off site, working in tandem with folks here, the technicians here, to ensure that our online streaming is working well.
And, the report that I've gotten back in the interim is so far, so good. Everyone looks great. They sound great. And, we may even get some emails, along the way that, of appreciation, but wanted to give thanks to Ken for spearheading that. And, the guys here. Thanks much. Item number seven on the agenda is, reported by Craig Miller, that is our open space manager. Craig, please.
Describer:
Craig Miller is now at the podium
Craig Miller, Supervisor, Parks, Trails, and Open Space, CPNMD:
Thank you. We'd had a request from HOA one, to clear some of our vegetation that we've got on property that we own gamble Oaks and native grasses, from the Bramble Ridge neighborhood and the Briarcliff neighborhood, because they're getting ready to paint the fences in those two neighborhoods. So we went ahead. We got all that cleared away.
We do normal maintenance on these areas anyway, terms of pulling brush back from people's properties so that it's not over overhanging fences or interfering. So we cleared everything by about two foot. Everybody was seem to be pretty pleased about it. And I've gotten some calls saying, when are you going to fix my fence? It's like we don't do fences.
We're just clearing fences for the HOA to paint them. So, that's just been a constant thorn in my side. And working with the branch manager, Bright View, who's our managing our account while they're looking to hire a new account manager. Bright View, is our landscape maintenance people are mobile on go people, as I call them.
Our old account manager was letting quite a few things slip. So they've agreed to step up their game, and they have been improving the level of maintenance. They've been providing us much to my delight. And to the delight of my guys, I have placed an order for seedling trees for planting in spring of 2019. I've mentioned to this board before. I believe that we get a variety of species for planting in our parks and open space.
Last year we got a selection of oaks, maples, cherries, and hackberry. So I ordered the same thing this year. These are all deciduous trees, ranging from small to medium sized, shade trees to very tall shade trees. The cherry trees, by the way, are mountain red sea cherries. So they're pie cherries. So we've got a few of those dotted around open space.
So first come, first served. Help yourself. They make great pies, but it's proved to be very economical. We get over 61.5 to 3ft tall, bear root trees for less than $400. This year, I had a credit on my account. I paid 320 bucks to get 66 trees. And our survival rate over last four years of planting seedlings is over 50%.
So this is a very economical way for us to get trees to go at about $5 to $7 per tree. Some of them are about $14 a tree, as opposed to sending $2 to $500 for one inch to a two inch caliper tree. But we have also been taking advantage of our fall clearance pricing on larger shade trees at nurseries and garden centers
Been having, and we recently installed over 20 elms, hackberry, catalpa, locust, maples and oaks in our parks and in the north and south open space. That's the green belt that's on the east side of monarch. These are, north and south sides of Castle Pines Parkway, and we've been replacing some of the larger trees we had to remove this year.
You may have noticed on the north open space, particularly the east side of monarch, north of Castle Pines, we took down probably about 4 or 5 large cottonwoods this year, and we took down about the same number last year. So it's nice to take advantage of the fall sales and get some of those things planned. And in this picture that I showed that here, these are three of the maples that we just planted right at the parking lot at Retreat Park, where we've had a definite lack of trees right through there.
So we've filled that in. Actually Retreat Park has benefited with the planting of nine different approved American elm cultivars they are Dutch elm disease resistant. As well as these three maples this year. So we've added a lot more trees to Retreat because we did take quite a few trees out there this year that passed on. Replacement of plantings that have been lost in the median isles on Castle Pines Parkway continues, as does watering of new plantings during the recent hot weather.
One of my guys pretty much spends 2 or 3 days a week just carrying a water truck out there and providing additional water to those plant material to keep them going. We shouldn't have the issue. Once plants get established, it's always the establishment, period. That requires extra care. We have completed repairs of our recent electrical outlets, or outages at neighborhood monuments.
We had four different neighborhood monuments four different neighborhoods that were out. Unfortunately, they continue to crowd up throughout the community due to the fact that our electrical lines were installed bare into our hot clay soils with no conduit when they built this community. So as a consequence, the insulation on that romex cable keeps eating away and we end up with short circuits.
And then we have to bring an electrician out to trace it down. If David can't trace it down our parks and open space foreman. So unfortunately, we get ahold of everything, get everything fixed, and we just discovered a new outage at the Castle Pines Parkway on Monarch Boulevard, at the monuments on the south side, Castle Park Parkway. So we've been working on that, this week, our trail replacement program is complete for 2018.
Our contractor is working on backfilling the edges of the new contract trails. At this point in time. He's just about finished with that. And, finally, I will be teaching a class at the Castle Pines Library this Thursday at 10 a.m.. I've got one this Thursday, I've got one, middle of October on a Thursday, and I've got one middle of November, at the library to finish off my zero scape and landscape series there. With that, any questions that the board have, I'd be happy to entertain.
Norman:
Craig going through Highlands Ranch. Every one of those trees has a piece of plastic about this this far? Yep. What what are they doing?
Craig:
Is it a green plastic bag? Yeah. Those are tree gaiters, is what they're called. And tree gators are placed around the base of brand new trees.
And you fill them full of water, and they gently and slowly leak the water into the ground. So it provides a self watering mechanism for brand new trees that's typically used exclusively on brand new trees and trees of larger caliber that need a lot more water. I've used them in the past when I was city for the town of Parker, and they work fairly well on a smaller, I'm sorry, sort of a medium sized tree.
Like an inch and a half to three inch.
Norman:
There's hundreds of them in Highlands Ranch.
Craig:
Yep, yep. And the reason that they do that is because it cuts down on their manpower for the size of Highlands Ranch and the number of trees that they have to water. All they have to do is send the guy around with the water truck to fill the bags up once a week, which makes it a lot more convenient.
Norm:
Are we using that?
Craig:
We don't really need to at this point in time. It's a lot more efficient for us to just take our little cart out there with the water tank and just hand water along those lines. Okay. Thanks. Yep.
Robert:
You previously stated that there were several entrances to different communities that you thought were in disrepair, and that would be, redone. Well, you mentioned one was the Stone Cross development.
Craig:
Yes. Stone Mountain, Stone Dale are on the schedule for next year for new landscaping next year. Okay. Yeah. We have done the landscaping on every other neighborhood entrance except for those two. Unfortunately, they ended up. Somebody’s got to be last. They're last. In fact, I'm meeting with the landscape architect tomorrow to plan out those those areas as well as three other areas we're going to be doing the landscapes on next year.
Robert:
Okay. And the design of at who does that go through, I believe Chris, is the HOA person for that? Is there a design that's approved for that?
Craig:
I actually actually I approve all the designs. I work with landscape architect. We have a theme going on here in the community, which is basically zero scape. We're looking at brand new entry monuments that are xeric in nature, low maintenance.
And as an example of what we're actually doing, you'll see it at every other neighborhood entrance that you go to. So if you want to see what we're we're going to be posing, or if you want to reach out to me and take a look at the landscape drawings that we got. But what we're looking at is a completely low maintenance, xeric colorful kind of thing, something that's going to basically be blooming and providing color April through October, which is what our design standards have been up to this point.
So it's going to be just as nice as all the other neighborhood entrances we've done.
Robert:
Okay. Appreciate it. Thanks for the update.
Craig:
Any further questions?
Denise:
I have one quick question on your electrical. When you go in and repair that, are you repairing it underground to where you're not going to have to.
Craig:
Exactly. Yeah. We're replacing cable and put in conduit where we can obviously we can't put conduit over everything because we'd have to excavate too extensively.
But an area that we're repairing, we're doing that correctly. But that doesn't help us five feet out from the line where the line is going to rot eventually and cause problems. So it's just a cost cutting measure. When this community was built. And unfortunately, the bill is coming due right now, which is why we it was last year. I believe it was that we put in a line item for electrical repairs, just simply because we're just spending way too much money on electrical electrical repair in that regard. Thank You.
David:
Thank you. Craig. Item nine Jim.
Describers:
Craig goes to his seat and Jim Nikkel takes his place at the podium.
Jim:
So luckily, in the interest of time, a number of these topics we've already discussed at nauseum, but, I can report our high service pump at the water plant high service pump number two has been replaced. Which we talked at beginning of the meeting last month or just starting that work turns out the old pumps sucked up a piece of a check valve that destroyed the impeller and the volute, which is the inside ball on that pump where we are now back in service.
Chatfield is moving right along. Since we last talked, the Marina has been closed. All the boats have been removed out of the water. And the contractor there is starting to begin and beginning to bring in his dredging equipment. for dredging of the new Marina. That will be followed then over the course of the winter by building the new Marina and the new Marina will be built up on land and then floated out into the water once it's ready for service.
Lagae continues to move along rapidly. Meritage came in this last week and purchased 14 additional taps, for the duplexes. Note their first foundation is done over there, and they're ready to start to go vertical. Earthmoving and installation of what utilities continues at filing tour of the town center. And interestingly enough, we received a call today from Century Communities wanting to know about taps for townhomes.
Townhomes are not to the best of my knowledge, approved in that development right now. But, it appears that they may be thinking about some townhomes that will increase densities in that area. No new developments on the proposal for the apartments, the 200 unit apartments. I know there's a lot of conversation. I know there've been some meetings on that.
Best of my knowledge, that has not been referred yet to Planning Commission. See if that one moves forward. That's the third time somebody has tried apartments on that site and see if they're successful. PCWRA we've talked a lot about tonight, in terms of the, the next project. I'm sorry if this board feels that they've been put under pressure.
There were two items that were carryover from the prior board that were in process. That's basin eight and PCWRA. And in the in terms of PCWRA being 1 of 3 participants, it's really difficult to look at the other two and say, we need more time. Sorry if the costs are going to go up. Castle Rock's moving very quickly on this project, and not only for cost savings, but they're already at 84% of their capacity, and they keep continuing to sell homes left and right down there.
They're going to need this capacity, potentially before we get it online. Basin eight improvements. Thank you for approving that contract. As I mentioned earlier, that allows us to take one of our lift stations off line. The unfortunate part is we have no other opportunities in this community to to get rid of lift stations. They're all needed.
This one presented an opportunity because of the Lagae development. August, we started to warm back up again. We produced 95.9 million gallons of water. It brought our well production for the year to 875.8 million gallons of water to 2687 acre feet. The golf course used 12 million since it took over 12 million gallons in August.
Probably one of the busiest Augusts that we've seen for the golf course. And the good news is, is we are in preparations right now. Come October 1, we will turn on our interconnect pump station. We will start to take water from Centennial via the interconnect pump station. Typically we see around 350 gallons a minute, day in, day out.
Come in from that connection, and we know that they're ready and prepared to provide us that water. I hope you received a color copy of the graph. And, I have staff that's very conscientious. I passed color copy, so I ended up with a black and white. Our usage in the graph for August was below the August 2016, by just a hair, but it's considerably higher than August of 2017, where we saw a lot of moisture last year.
Right now, I would say September is going to probably equal, if not be slightly higher than the two bars. It's been very dry and very warm, and it doesn't look like we get out of the 90s until this weekend or sometime next week. You know, October can't come quick enough, so we can start taking our water out of Highland Ranch and help us start resting our wells. And with that, if there are any questions, I'd be more than happy to answer them.
Norman:
Jim I have a request. Since you're the only person that goes to the PCWRA, can you add a section in your report for all the all the items that happened that that have some bearing on us?
Jim:
Sure what I'd be happy to do is just provide you a copy of the meeting minutes and the, the agenda along with it. Happy to do that.
Norman:
The other thing is there's a drilling rig on Monarch. Whose whose, well is, that?
Jim:
That is outside of the district that actually is the drilling rig is working on an ECCV valve. Or, well, drilling a new well that's East Cherry Creek Valley. East Cherry Creek Valley is clear out at Smokey Hill at 47O.
And they own those wells. There's a series of wells along the eastern boundary of Highlands Ranch that they now own. Those wells originally were owned by the Willows Water District, which is over basically north of 470 up to about county line Road. University to Holly area, roughly, they originally owned those water rights and drilled those wells, and they sold those wells to East Tree Creek Valley, a number of years ago.
Norman:
*Inaudible speaking* There was a, a small drill rig. It was by Walgreens. Yep. And, was that anything that.
Jim:
That's the public service doing a geotechnical investigation before they design and construct a gas line a medium pressure gas line that will run from just outside of our office, where pump service has a regulating station all the way over to the canyons. Okay. Okay. Thanks.
Robert:
Just a question that might be out there for our residents and viewers that are at home for the 200 apartments that are going to be going in on in the Lagae property. And the concern from people I've heard is it might be a blight on the entrance into our community. Do you have any way that they could get involved in the planning stage and maybe, is there any concern about it looking kind of like the legacy, it looks like, where the parking is on the inside.
Jim:
So for clarification, the 200 units are not in Lagae. They're actually in Castle Pines North Metro from day one that property's been included into Castle Pines North.
Robert:
What about the planning for the Legae property that you can see from the road.
Jim:
I would suggest that if folks want to get involved contact the city. The city has control over approval of that property. Okay. Thank you.
David:
Jim, remind me of your formal capacity, if any, other than as a representative of this board at Chatfield, much along the same lines as Norm had talked about, with, with regard to, Plum Creek. Are you on a board there?
Jim:
I am Im on the board there representing this district.
David:
And, your title? Secretary. You told us, I remember, can you do the same thing then, please? With regard to those minutes? Happy to. As you offered Norm. That'd be great. Are there any other entities that we would benefit from from knowing what's going on around us?
Jim:
We we also belong the South Metro water supply authority.
David:
Wait, wait, that you are representing this board.
Jim:
Yep we also belong to the South Metro Water Supply Authority. Okay. And we we have very minor involvement in that. We're we're such a small entity compared to other members. Okay. That's it, that's it. Okay. Thank you. Yes, sir. Nothing Else.
David:
All right. Counsel item ten. Thank you very much for your report.
Kim:
Yep. You have our report in your packet, and I believe everything that was ready you dealt with tonight. There's a couple of easements that we returned to your staff, and they're going back out to the to the, property owners. And so they're all pending, unless there's questions, I don't think we have anything else to report on.
David:
Hearing none. Thank you again. Directors matters. Directors. Hello. We wait. Any other matters that we would like to entertain this audience and those that have remained online with us before we sign off tonight? None. Hearing none. And and, but thanking each one of you for your time and effort this month. It is been a busy month, as Jim has indicated.
And as Kim has demonstrated and everybody who’s a part of the district. And thank you to each and every one of you who participated in all of those endeavors. I too hope that the heat retreat, in the, in the month of September, as soon as possible. That being said, well, there are no other Director matters other than, again, my appreciation for all involved.
Are there we don't have anyone that has signed up for any public comments, but as I have.
Wait, you got to finish. As I have ventured before taking a stab at batting against the odds. Chris, please join us for public comment.
Describer:
Chris, an attendee, approaches the podium.
Chris:
Thank you. Is it on? Okay. Appreciate. Thanks for the opportunity to speak. Actually, I came today just to hear what was going on on, the PCWRA. And I know we spent a lot and you guys spent a lot of time on that. So we appreciate all the time you spent on it. And the discussion seems like we're doing a pretty good job on the evaluation of how the funding is going and so forth.
So thanks for that. And I know as a community member, we definitely appreciate the effort you guys are putting in today. I do want to go back to the the beginning, which was, you know, mentioned, do we really need to do this right? And I know there's a time constraint, but I would like to just offer if you, you have your special meeting that you consider, you know, do we really need to spend the $5 million period on, on doing this or, you know, the comments were made that yes, it's a three member community, our board or whatever it's called.
And, we're just going to be participating. But it sounds like at the same time, we're not at capacity and that, if we do need capacity, even though sounds like Castle Rock is going to be able to gobble it all up, we can actually buy some from accesses from the Castle Pines village. So that would be my comment. You know, I know you're doing your due diligence of funding, but go back and look at the beginning.
Can we just do we really need to do this? Other than that, I think you guys are doing a fine job. I appreciate you guys serving and doing your duty, looking out for us. Thank you.
David:
Thank you. Chris. You're on.
Describer:
Chris goes to his seat and another attendee, Jeff Huff, takes the spot at the podium
Jeff Huff, Hidden Point:
Good evening, board members. Jeff Huff, of Hidden Point. I, I enjoyed the whole discussion regarding the PCWRA expansion, so I just made a few notes as you all work through the various issues regarding that. And before I left tonight, I just wanted to bring a few of those to your attention. First of all, I do sincerely appreciate your desire to seek out more information on that and, to, to get, further, input from from your staff and consultants, prior to making a final decision.
The district assessed is a $6,120 wastewater connect fee per single family equivalent. So you've had cash flow coming in from the new build that comes into the district, primarily right now, in Castle Pines Valley. So one of the things that I did not hear from your financial analysts, which I think you know, should be part of the presentation to you, is a analysis of the cash flow.
From the connect fee, with the current revenue that's generated from, the ongoing development, both in Castle Pines Valley and in some of the smaller in holdings that are within the district boundaries. The rate in growth in Castle Rock over the last several years has far exceeded the building permits that have been issued here in Castle Pines.
So, you know, I guess my concern is that we should not be funding growth that's happening in an adjacent community. The demands that are placed on that system seem to be primarily coming from Castle Rock. And I want to make sure that the way that the math is done, on this deal, is fair to the people of of Castle Pines.
So with that in mind, I would I would urge you to work with the city planning department also within our homes, Meritage, some of the other builders that are active here, Castle Pines. And caution you not to overestimate their future demand. There's a finite amount of additional building, within the district boundaries here in Castle Pines.
And that maximum amount of demand should be able to be quantified. And maybe it's something less than 13% of another 3 million gallons per day of capacity. And then finally, just as far as the process on this goes, and I think, Director Merritt spoke to it, this board has faced so-called trigger funding decisions
In the past. Earlier this year, you were asked to make a decision regarding some funding over in the Chatfield relocation project. And I think it would benefit yourselves and also the community greatly. If these, these sort of milestone decisions which require a great commitment of, taxpayer funds, have more than just a, a passing sort of once over consideration, at a single board meeting.
And I know this has been this particular issue has been on the agenda, from what I hear from tonight's meeting for the last 18 months. But it was the first time I had heard of it, as it seemed to be the first time many of you heard of it as well. So I think giving some of these critical decisions, a, a fair amount of time for consideration before you all are asked to vote on it is only fair to you and fair to the community as a whole.
So thanks again for your time, and I do appreciate all your service.
Kathy:
*Inaudible speaking from Kathy*
David:
Any any additional comments from board? Hearing none. Public comment is.Director Merritt.
Robert:
We just appreciate every any resident coming forward with any questions at any time. The new board is all about transparency and just wanted to reiterate that one more time. With what was just said, apologize if there was any offense taken with that anyone, any resident at any time.
Our numbers are on website and we can be reached for any question that you guys want us to look into. And we're doing our best job to look into it. That's all I have to say. Thank you.
David:
Thanks Robert. That wraps up tonight's meeting fulfills our obligations under the agenda that we’ve being given, adopted, approved, and now exercised and completed. I'm looking for then a motion from one of the Directors for adjournment.
Norman:
I make a motion that we adjourn. Director Froman has made a motion to adjourn. Is there a second? I'll second. Director Crew has seconded the motion for adjournment. I’ll call for the vote. Knowing there's no further discussion, to adjourn, signify by saying yay or nay.
Board Voting All Speak:
Director Rosenkranz. I. Director Froman I. Director Merritt I. Director Crew I. Director McEntire. All a majority vote. Meeting adjourned. Thank you.