Work Session

September 15, 2025

Transcript

Describer:

Work Session - Board Meeting Agenda

Monday, September 15th, 2025, at 5:30 p.m.

7404 Yorkshire Drive Castle Pines CO 80108

I. Call work session to order.

II. Roll call.

III. First 2026 Budget Work Session. A. Review of Budget Timeline B. Cash Analysis

C. Capital Schedule

D. Initial Budget for 2026 IV. Finance.

A. Review: Monthly claims for payments made from August 14th, 2025, to September 9th, 2025

V. Legal.

A. Review: Plum Creek Water Reclamation Authority Bond Repayment IGA-Reuse Reservoir Project

VI. District Manager.

A. Discuss: Proposed New Deputy District Manager position

VII. Adjourn

Board President Jason Blankaert:

Good evening, and welcome to the Castle Pines North Metropolitan District work session for Monday, September 15th, 2025 at approximately 5:30 p.m. we will call this session to order and begin with roll call.

Board Member Director Tera Radloff:

Tera I'm here.

Board Member Director Jana Krell:

Jana. Here.

Board Member Director Leah Enquist:

Leah. Present

Jason:

And I'm Jason, and I'm present as well. We are missing Jim tonight. Okay, we'll close item to and move on to item three, the first 2026 budget work session.

And we'll begin with a review of the budget timeline Eric.

Financial Director Eric Harris:

Yes. Good evening board. On page two, you'll find a brief, memo describing our upcoming budget timeline. And I just want to use this as a reminder for everyone tonight. What we're going to do is work through our first budget work session, which would be high level assumptions and timing of capital projects. Over the next 30 days,

Nathan, myself, and a few other people will be working through multiple iterations of the budget, and then at next month's work session, we will be bringing to you, an updated draft to meet our compliance deadline. We'll discuss and go on it very much a detail level at that point. What makes up line items, goals, things of that nature.

But really tonight is to discuss capital and assumptions, and then we'll continue to have a, yes, a work second work session. And then, we'll have a budget hearing on October 27th, kind of like the first public budget hearing. Third budget work session, if necessary, on November 17th and then, second budget hearing on November 24th, the week of Thanksgiving.

And then, with the presumption that you will consider that, budget for approval at that time. Are there any questions on that time frame or any adjustments that you see with that process? Perfect.

Jason:

I think it looks good.

Eric:

Thank you very much. moving on to the next item. Well, over the last month, we well, let me back up.

We do kind of, projects periodically. We want to take an analysis, a deeper dive in the district's financials. So this last month, we did a ten year look back on cash as it relates to the district, specifically, as are, operations, cash flow, what we spent on capital. And you'll find that analysis on page 26.

It's a it's a very high level summary. I won't go through it in detail, but it involved us going back through the audits, district's financial records to really give a clear picture on what the district spent its money on for the last ten years and gave some further detailed background on, the increased cash position as it relates to the district.

So if you go to page 20, well, how it lays out is starting on page 26. We started from beginning year in 2015, and we go by period taking into account operating capital, capital spend, debt service, all those things, if that makes sense. Split out by water and wastewater fund. Nathan, if you move forward to page 27, you'll see a summary here.

Describer:

On screen. Castle Pines North Metropolitan District Cash Rollforward. Page 27 of the packet. Eric Explains.

Eric:

And the reason why we did this was to essentially start working towards a capital reserve policy for this district. We currently don't have one in place. If you take a look at your budget, you don't see a kind of like a financial reserve that's restricted. And the ultimate goal here is we're going to layer this in over the next year with capital projects and the capital plan.

And we're using this as a starting point for our cost of service study as well. So these numbers have been conveyed to Bartle & Wells. so what I want to what I want to identify is just some, items here. the good thing is, you see, your operation fees, your service fees cover your operating spend. That's the goal.

There's a slight increase of approximately 2 million over the last ten years and that's just taking into account operating revenues and operating expenditures across each fund. You will see an increase of approximately $35 million as it relates to connect fees. That's a substantial portion of this district's balance sheet and we all know what the development is associated with,

With ... We had another $15.3 million in renewable investment fees, and that's, that's connect fees and, service revenue as well associated with that, that monthly $15 per SFE charge. That's a component of that amount as well. And then once you kind of roll down, what you'll see is $44.9 million that ties to the audit at year end in water enterprise cash 5.6 million and then totaling $50.6 million in cash.

And another important note is the district did incur over the ten year time frame, $7.3 million in investment earnings as well on that substantial cash balance. So in aggregate over the last ten years. So I just wanted to, you know, it's it was important for us to get to that starting point, to have our capital reserve balance of that makes sense.

And so if you scroll all the way down to the bottom, Nathan, what you'll see is a reconcile reconciliation to our capital, if that makes sense. Our capital net position. And so this is a difference between what's on our cash basis to our accrual basis. So what does this mean? In the water fund, there's $15.3 million in cash available because the district did levy those fees over the last however many years associated with the renewable water investment fee.

There is 20 million, 20.9 million in restricted cash in the water fund and then unrestricted for the purposes of operating funds is $7.4 million, which essentially amounts to a years of operations in the water fund. So that was that was an important distinction. Moving forward to the wastewater fund, what you see is $2.7 million in capital funds and then approximately $3 million in wastewater funds for, for unrestricted.

And so what we're doing is we're we're using these, again as a starting point for our rate, cost of service study to ultimately see how this aligns with, a strategic capital plan. You know, I think 10 to 15 years out, that's the ultimate goal here, which is something that this district has not had. So I just wanted to convey just that, you know, additional analysis and things that we're doing to align with our budgeting process right now.

Any any questions on cash.

Tera:

So we've never had a reserve?

Eric:

We've always carried it essentially as unrestricted, if that makes sense, or a minor amount is being restricted. And so but it wasn't necessarily pinned or coined anything, if that makes sense. And that ultimate goal here is to pin this directly to our, capital spend or capital plan.

Great. Any questions? Wonderful. Next item on item number three will be a review of the district manager's capital plan. Nathan worked pretty hard to put together or really hard. Excuse me. Over the last month and a half, the district's capital plan. You'll see this on page 20. page one. A document that looks like this. It came after the fact.

And it should be at your desk. And so this is a narrative plan, by water and wastewater fund, justifications, initial costing estimates associated with, capital. And we're basically trying to get to a more or less a timing and a year right now of when that is necessary. There's not the financial these aren't bridge yet to our financial statements yet.

We'll be doing this over the next 30 days within our cost of service study. But we wanted to take a moment to talk through this, Nathan, if you want to jump in here in a second of, the proposed capital spending that's going to be incorporated into our cost of service study.

District Manager Nathan Travis:

Yeah. So I don't know that I've got.

Excuse me. all that much to add. this is a fairly rough first draft. We still need to add, some supporting data. There's line items that we're still waiting on, some projections and cost from Kennedy Jenks. Inside of this plan, it really does, for the most part, get us past the point of deferred capital projects.

So once we get through a lot of this round or once, now that we've reached this point, we've got a couple other things left in here. Some waterline replacements, but the majority of it is looking forward. So, one thing to draw your attention to in the board will get an email with more information on this, but on page five, there is a project listed for 2030.

It's a collaborative renewable water project. It's written in here that way because I wanted to make sure that I talked with Sam before I specifically called out what it is, but so what that one is would be a potential partnership in the expansion of their water treatment plant. That's going to be done here over the next 4 to 6 years, depending on their timing.

That would allow us to open door for some other regional opportunities, potential things there. The biggest impact there would be the IGA that we have that gives us access to our renewable water rights every year through our Highlands Ranch interconnect. It would be a mechanism to, renegotiate that IGA. So there are some things about it that aren't all that favorable to the district, one of them being a $485,000 annual capacity readiness charge.

We also lose 15% of our water by moving it through their system. They don't necessarily need, but would certainly be helped out by a partnership in, building their way. Their water treatment plant. And in exchange for that, we would lose some of the date ranges. So right now we're restricted to October 1st to April 31st.

That water would become available to us year round, which lets us do some other re timing things through that Stantec study that we'll talk about a little bit more in depth. But, without getting too far into it, that is one project I wanted to call your attention to. And then the other large project worth looking at briefly is the, back one page on page for, the 2029 down at the bottom water storage tank three construction.

We've mentioned this one a little bit before, but this is system redundancy. We'll be doing some studies with board approval over the next year or so, specifically looking at storage capacity and fire flow readiness. And this would give us redundancy as well from our treatment plant and help fend off some of those potential, system, more system wide events.

A lot more detail to come on this, it's a document that is actively changing daily. So there's probably not a huge amount of value in the board spending a detailed amount of time working through it at this stage. But as always, if anything comes up, give me any questions and we'll answer them.

Jana:

I do have questions, Nathan.

Okay, so Kennedy Jenks prepared the cost estimates?

Nathan:

The majority of them. Yeah.

Jana:

Okay. And then, what do they base their cost estimates on? Like what? Pricing data? Since we just keep seeing construction prices go up.

Nathan:

So they're using a couple different metrics. One, for the especially the waterline, the waterline replacement projects and those we are assuming I can't remember what Lisa , had in there for inflation, but we're we're taking the cost of our current projects and then, you know, giving converting those into a price per linear foot.

Jana:

So you're using the prices that you've got in 2025 construction dollars. You're adding a inflation factor to take you. And so you feel pretty good. And in general. Yeah. Kind of yeah. Especially packed and stacked anyway.

Nathan:

Yeah. The 2020 2026 2027 capital dollars I feel really, really tight on those. Okay. and then the money for the tank project is another direct comparison.

That's the tank three. That's a comparison. The village is doing, virtually an identical project as we speak. We're partnered again. So that's using their cost estimate. Good for that. and then the $20 million is at this point, that's for the, renewable the Highlands Ranch Partnership. Okay. That is pretty much a wag at this point. Okay.

Still have some more detailed cost estimates.

Jana:

And then for the board, I asked Nathan. So Nathan was kind enough to send this to me ahead of time. So I did get to go through it a little bit. last week, I've asked for a map or a vicinity map to go along with this, just to kind of give us an idea where the water lines are, where the locations of these water tanks are.

So I think he's going to have that. And then my thought is on that 20 million whack that you're referring to. We're going to get more info on that before we have to agree to budget for that. We're gonna have a lot more info.

Nathan:

Oh yeah. Correct. Cool. Yeah. So this will be a generalized number that's used for the rate study even.

That's going to be a lot tighter. Centennial is doing their, They're there, They'll they'll have their 60% cost estimate in the next month.

Jana:

Got it. Okay. That's all my questions.

Jason:

Thank you. Thanks for all your work on this. It looks really good. And I'm sure, Jim would be very happy if he was here.

Eric:

So, yes, this is, a living, breathing document. And then we're constantly going to be adjusting for, timeframes associated with these as it relates to the budgeting year, going forward. So we're taking that into account in the fourth quarter. moving forward, if there's no further questions on item number three, on starting on page 13, you have the initial budget that we have for 2026.

Describer:

On screen. CPNMD BALANCE SHEET AND STATEMENT OF REVENUES & EXPENDITURES - BUDGETARY (NON-GAAP) BASIS

December 31, 2024 Actuals, 2025 Adopted Budget and 2025 Actuals Projected Actuals, Budget, Variance Through June 30, 2025 and Proposed 2026 Budget. Eric describes.

Eric:

And generally what I want would like to accomplish here, if there's any feedback from the board, is just to kind of high level review it and make sure we have all the baseline assumptions for you at this time. As I mentioned before, we're going to be working through a detailed analysis at next month's work session with the cost of service study.

So, you know, think about employee headcount, you know, things of that nature as well. If we want to if we can take any feedback from you on the budget at this time, that would certainly be appreciated. So from a high level standpoint, the preliminary AB came in, I want to say it is, it is noted at 277 million right now.

And the one thing to note of this is the exemptions did go away for this next year or this year for next year's collections, those $55,000 exemptions. But we're at a 6.25% assessment rate on residential property. So we're continuing to collect property taxes within the general fund. We're going to have our office wages out of the general fund.

And then as we discussed in the last board meeting last month, we're going to have the district's overhead presented, within the general fund as well. And we'll have a fund balance that comes out to the bottom within the district's general fund. So that's pages 16 and 17. And those, of course, are bucketed in category, categorized, as we discussed last month.

We do have, we are assuming right now that some parcel transfer costs are going to carry forward into next year at this time within this budget right now. But if we get updated, knowledge over the next several weeks, we'll of course, adjust the time frame associated with that projected to have approximately $466,000 in fund balance within the general fund balance.

Tera:

So when you have your, comments on it says see detailed financials for comments. Where do I see those comments?

Eric:

On page oh yes. Page 15. All right. So, stepping back, starting on page 15, this is the high level summary of the general fund Conservation Trust Fund. And then the combined wastewater fund. So so the general fund, if you move from page 15 will be on page 16 and so on and so forth if that makes sense.

So we don't have the detail schedules presented as a component of this is just how everything rolls up at that. So collapsing those groupings is what you get on that summary page.

Tera:

Yeah, I understand that, but but if I'm looking for information on what assumptions you have in here, if I want to, I can provide those for you.

Yeah. I want to look at the, you know, total beginning funds available and and wonder why that, a little bit less than our projected actual for this year. Where would I find that?

Eric:

Okay. I don't have that information right here. There is a projected column, the fund balance, but I can I can certainly provide that information for you.

So, moving kind of down through, through a little bit more detail on the payroll side, we have all staff and then additional of one additional hire that Nathan is going to present later on for your consideration. Next, at the next board meeting is incorporated within this number as well with the latest payroll numbers. And then you have the 2025 projected actual, which is about approximately $240,000, 240,000 in fund balance.

And this is at the bottom of page four, Nathan. And that will be roll forward to your starting point, for the 2026 budget.

Yes. Right here. 17. Sorry, sorry. Page 17. There's two page references. So at 240,643. So we do have the projections that we did present this last month with within these financial statements. Moving forward within the CTF plan which would be on page 18 we are assuming that we'll still collect those funds. And then we will remit those funds to the city, depending on the time frame associated with certification.

So that's just a complete pass through on that fund. Moving forward to page 19, this is where you have the water fund and you're going to see, the, what we discussed last month is, the allocation is done within the general fund. So you'll have your water service operating revenues coming in, which this is just to borrow a term, a swag right now, where I'll be updating this number for the cost of service study.

So we have $3.5 million in here right now. That's going to change. So you have your monthly service revenues associated in there. And then you have on page 20 your groupings of charges right now that we have and we we got about halfway through on reviewing all the GL detail associated with this. And we're going to finish that for the work session as well.

So we will have all that information available at this time. So you know there's certain things in here. But we have been able to, you know, get through certain assumptions with Nathan associated with some of these. So, you know, things as they stand right now, you know, water distribution repairs, things of that nature. We're working with Nathan on, utilities.

We're doing a detailed analysis on those utilities. And so that comes down to your total operating costs down at the bottom. Then moving forward to page 21 is your non-operating cost. This is the capital improvement fee. And then essentially your your water non-operating expenditures is your CapEx proposed for 2026. And this has changed even as of today with Nathan's updates on emails he got this afternoon.

So we're going to continue to work through those numbers as well. And then at the bottom of page 21, you'll see those restrictions I spoke about as well. And the restricted, fund balance as well. And we're projecting how that carries forward from year in 2024 into 2025, and then as a starting point for 2026 to see where we will be right now.

Moving forward to page 20, page 22. Excuse me. This is your, wastewater fund. You know, I think we're all familiar with this. You have your service revenues, and then we're moving to your direct charges on page 23. There is an important note, and we were aware of this an earlier this year. And, down the wastewater fund, you'll see a negative ending funds balance, which does not look pretty.

We're going to be updating this right now because we're trying to determine the timing associated with not only the lift station projects that we have going on for scope A and scope B over the next couple years. But in addition to, the timing associated with the, PCWRA golf course projects that we've discussed as well, and we'll discuss later in this meeting.

Ultimately, the most efficient way to do this will be to essentially have an inter fund loan between the water and wastewater fund that will be paid back over time. I just wanted to highlight that right now, as we will still need to figure out a financing source and mechanism for that. As it stands right now. So if everything plays out, you know, the wastewater fund would go upside down.

But that's not going to happen. And the intent, we will have a financing, financing in place for that. And so essentially over time, we're going to be modeling with, cost of service study for the wastewater fund to pay back the water fund over a period of years and figure out what that time frame is over the next several weeks.

So I just wanted to kind of prove that, right there is that negative balance, if that makes sense. So that kind of concludes all I have to digest as far as an introduction. Yes. All right.

Leah:

So question about that, the anticipated negative balance was, was that something that was on our radar. So when and and then what what has what's impacted that like is it one project multiple projects or.

Eric:

Yes. So it's been on the district's radar for a couple of years. It was identified, at least to my knowledge base from an operations standpoint. Nathan has been aware of it for about two, two and a half years. I would like to say, there was, there's always been a cash need associated with that. And so the district operates on a pulled get pulled cash methodology.

So the district could always pay those bills. It would just be it would just identify in the short term the district did not levy the fees to collect for those capital expenditures for the next couple of years. So to answer your question, yes, it has been identified and known about for a couple of years.

Leah:

And then I'm assuming, like we would still reserve our reserve fund.

Correct. And so that's the other item is do we if we have a reserve fund policy in place, what what gets priority, the replenishment of the payback of that loan, the replenishment of reserves, the replenishment of operating reserves within the wastewater fund as well. So we're we're looking at that.

Leah:

When you when we talk about the loan, I forget the word you use, like enter something ,interfund loan,

is that the loan you were reference and I'm assuming, like, there wouldn't be interest tied to that or. How does that work?

Eric:

You can't. Ideally, you would have some sort of business interest associated with that, charge because the enterprises are set up to run it as a business. We're also looking at reclassifying, certain types of revenues.

Ideally the golf course revenues and cash associated expenses, their end, which should become, immaterial from a financial statement, presentation. But ultimately, that's where those revenues should have been all these years within the water and wastewater fund. So we're looking at a couple different things as it relates to that. So that may at least defer for 2026, perhaps the necessity of having that loan in place.

But by the time we hit scope B, we'll need something in place by 2027. Ideally, and Paul and I have discussed this will tie it together with a promissory note between the two and probably board action as well at that time. Okay. Thanks, Eric. You're welcome. Any other questions? Perfect.

Jason

Okay, great. Thank you Eric. We'll go ahead and close out item number three.

And we'll open up item number four for finance review and monthly claims and payments from August 14th, 2025 to September 9th, 2025.

Describer:

On screen. Castle Pines North Metropolitan District Electronic Payments Report For the Period August 14, 2025 - September 9, 2025 PRESENTED FOR REVIEW, Eric describes.

Eric:

Apologize. I'm just moving over to the agenda. on page packet number three, you have, the amount of $1,246,538.25 of claims presented for your review. Just a couple highlights associated with these. If I can find my notes. a large one is, a large one on here was associated with the monarch project. So that was about 300.

we find that no real fast.

This was, check number 29323 on, and it was for $332,392.14. So that was with the latest draw, pay application for the city on the share on the Monarch project. And then, that was, that was essentially it from the ones that really stood out that I wanted to make you aware of. Are there any general questions that you have?

Or detailed questions for the fact of the matter?

Tera:

Just if you can tell me I was looking under the electronic payments, if you could tell me. Seems like we had a lot of chargeback items. And then what was the citywide analysis charge?

Eric:

Yeah. So, chargeback items are, in summary, NSF or utility fees that are just, you know, reverse back within the city, as well or. Sorry. Excuse me. I will follow up on those chargeback items, but they're essentially a component of the, the merchant processor, if that makes sense. And then, and I'm sorry, I meant what was your last question?

The citywide analysis. Yes. So the district pays anywhere from 8 to $1400, $800, or $1,400 monthly for access to their treasury management system that allows us for, and we get that discounted with our cash that we have held with them as well. So, debits, you know, debits, credits, things that hit our the district's books may have $0.05 or, you know, ten cent charge associated with it.

And then, an earnings credit associated with the balance. One of the things the district has I've looked at with Nathan is looking at potential other banking relationships to decrease that charge. And right off the back, we did meet with a bank that said they could offer, I think it was approximately 20 to 40% discount off that fee.

From the equivalent fee of what we're being charged by citywide banks, which is of course, part of and so, and this was a local bank. And so we need to do a little bit more further investigation on that Treasury management system and the change management process associated with that. But ultimately, that is a very variable rate that comes across monthly.

And we do get, support for it each month as well.

Tera:

Thank you for that answer. I appreciate that.

Eric:

And I'll follow up on the chargebacks for you.

Jason:

I have a quick question. what are we paying Greystone for? What are the what's that monthly bill for?

Nathan:

As in what what services do we receive?

Jason:

Yeah. What are they billing us for?

Nathan:

I'd have to go. I'll get you the the actual contract for a full breakdown, but they basically cover all of our IT needs, so that's a little bit variable.

There's a base contract price, to cover day to day stuff. I don't think it'd be captured on this, but then there's, you know, if we have equipment replacements, that variable stuff. But just general, IT management. Thanks.

Tera:

Then on Core Electric, have you been able to coordinate any kind of I know they had reached out with the offer to do a rate study, but it was hard to get it on the calendar.

Nathan:

Yeah, I still don't have the results of that yet. I've been, I've got a rotating reminder to poke them every couple weeks. But I haven't yet gotten that rate study back. I think last time I touch base was about a week and a half ago, but still coming. In progress.

Eric:

Great. Thank you. Board.

Jason:

Thank you. Anybody else have any questions? We'll go ahead and close out. Item number four finance and move on to item number five legal. Hello Paul.

Legal Counsel Paul Polito, Esq.:

Good evening Board.

So on the legal front, I'm still planning to get those revised rules and regulations, to by the next board meeting. Kim is still diligently working through all of these conveyances. I do have an update regarding the Hidden Point Metro districts inclusion. It's a small update. director Red lofted. I mentioned the last meeting.

She did inquire as to just the status of that, and I did, reach out to the district manager and the president over a Hidden Point last Friday. just to sort of, you know, resurface the issue. I had sent or I did send an updated agreement, which to me is in its final form, right now.

I didn't receive any response from that. To my understanding, they're still planning on meeting in October. now, that does push the timelines back a little bit, because there is a little bit of a tail on having an election about 60 days. So even if they were to approve it in October, it's it's too late to certify Castle Pines and the levy this year for collection next year to do all this.

We're not going to have an election probably until next February. Is what this is looking like. Assuming that we finalize this in October, November? Probably not December. So, you know, in that instance, what does that look like? We would be certifying the mill levies December of 26 for collection in 27. Hidden Point would still be charging what they charge now to the residents next year.

It would change in 27. And then they would be that would remove that 25% surcharge, that the district charged to Hidden Point. So that's the 30,000ft overview of where we are right now. Does anybody have questions about that? Before I move on.

Nathan:

For for clarity, real quick, when Paul says we wouldn't be having an election until February, it would be a hidden point, having an election, right?

Paul:

We would actually be conducting the election. Okay. So in this instance.

Tera:

Could you just clarify that? Because I thought when Kim was here, I thought he said that they weren't going to need an election.

Paul:

And this was for Hidden Point that he was specifically talking about. So I think, yeah. Go ahead.

Nathan:

Yeah. They an election still needs to happen.

It doesn't necessarily have to be run by the county. So they could do their own election.

Paul:

That that's that actually that was most likely what. Yeah. So I did have that exact conversation. With Kim. So what he was talking about was within the rules. It doesn't mandate that you have to specifically follow the procedure that special districts follow for special district elections.

You could there's a little more flexibility there. But at the end of the day, the court is still setting that election date. So there does need to be an election. It's just not on. It doesn't have to be on the special district election calendar.

Tera:

You had mentioned that you didn't hear back from their district manager on your recent reach out.

Nothing. Yeah. And is that what's affecting the timeline?

Paul:

Their vote is affecting the timeline whenever, whenever they vote on on that agreement or. Well, I mean, okay, arguably even if they were to give me a finalized agreement that they said, okay, we're we're happy to execute this. No, you know what? It would still need board action from them.

So, yeah, we're waiting on their meeting in October. They could hold a meeting earlier if they want to. I don't know what it accomplishes at this point. I mean, this would have, you know, this would have been needed to be completed months ago. You know, we're not talking matter of weeks here to to fit, you know, to meet in November election this year.

Tera:

Yeah. And then, and if I understood what you said correctly, you said that that in 2027 the rates would go down. I thought they were going to be included. So would they just go away?

Paul:

Well, that's that additional surcharge would go away. That 25% surcharge would, would be removed.

Nathan:

And so the right now the way ahead and point structured is they're outside of our water district.

So we have an extra of service agreement I understand that 25% surcharge. So that would go away. And then there would be inside of our boundaries. And so the financial make up for that is that they're now subject to our mill levy.

Paul:

Thank you. Thank you. Any other questions on the hidden point inclusion okay. I know that Nathan has, an update for you regarding, this Plum Creek IGA, and and I am happy to answer any questions you have about it.

Describer:

On screen. On packer page 28.

INTERGOVERNMENTAL AGREEMENT (Bond Repayment)

THIS INTERGOVERNMENTAL AGREEMENT (“IGA”) is adopted and approved with an effective date of _________________, 2025, by and among the Town of Castle Rock (the “Town”), Castle Pines Metropolitan District, acting by and through its Water and Sanitation Activity Enterprise (“CP Metro”), and Castle Pines North Metropolitan District (“CP North”) and Plum Creek Water Reclamation Authority (“PCWRA”). The Town, CP Metro, and CP North may be individually referred to herein as a “Member” and collectively as the “Members.”

RECITALS

A. PCWRA owns a reservoir (the “Reuse Reservoir”) for the storage and distribution of treated wastewater which is used by four local golf courses for irrigation.

B. Each Member has within its boundaries at least one golf course which uses irrigation water from the Reuse Reservoir.

C. PCWRA has determined the need to rehabilitate the Reuse Reservoir, including a new liner, aeration system, a new pump station, and other capital improvements (the “Project”).

D. Each of the Members has determined that to secure and continue the availability of reuse water for golf course irrigation, the Project is in the best interests of its residents, taxpayers, and rate payers.

E. In order to finance the Project, PCWRA has applied for a loan from the Colorado Water Resources and Power Development Authority (the “CWRPDA”), a body corporate and political subdivision of the State of Colorado, and the Board of Directors of PCWRA has passed or will pass a Resolution approving and authorizing a Loan Agreement with the CWRPDA, and PCWRA has executed or will execute a Loan Agreement with the CWRPDA for a loan not to exceed $8,500,000 (the “Loan Agreement”).

Nathan describes.

Nathan:

So this is, something that's been brought to the board a couple different times now, this is the idea that would be, effectively between us, PCWRA, Castle Rock and Castle Pines Metropolitan District.

This is for the reuse reservoir. So our treated effluent in the summer months is diverted into this reservoir. We pump it into the district, and that's what we use to water the Ridge Golf course. That pond has, some compliance driven upgrades that need to be done. It needs to be lined. It's currently in all it's a clay bentonite lining.

Now it's needs to be actually lined. And then there are some capital implications beyond that. The pump station that's down there is 30 plus years old. It's ready to come out. It needs to be replaced. And so this idea is really just us saying that we are going to take care of our portion of that project. This is a little bit different from other agreements because it's split up based on the number of golf courses.

So most of our agreements are proportional to our share of the wastewater treatment. This one is proportional to our share of the golf courses. So we have one of them, that's implicated. It's a quarter of the, construction costs, will be our responsibility right now. That's looking to be around $1.9 million. We have not yet awarded the bid.

This doesn't lock us into, anything other than our responsibility to pay it back. So there is some delays on the financing on PCWRA side. We were going through, and Eric can correct me where I get this wrong. Or misstep if there's, a bond schedule associated with it. There weren't enough other utilities to go out with us yet

For this September disbursement, we're hoping that other utilities have other projects to kind of jump on to our bond schedule in the spring outlay they do with this twice a year, I think the other one is in April. And if that's the case, then we'll be able to finance the projects through the state revolving fund loan.

But it there is some uncertainty there. And so right now we are looking hoping to award a construction contract. Some questions up in the air around that mostly driven by whether or not a contractor which we have received bids is going to be willing to kind of carry that flier like pending funding for the next 6 or 7 months.

But either way, all of that kind of hinges on this agreement to, to repay. And, so we did approve this, at the last board, PCWRA board meeting, pending approval, approval of our individual boards. So, we've we have voted. Yes, but you guys still have the ultimate hammer there. if you have any questions, happy to answer them.

And then this will be brought back Monday for approval.

Tera:

So why would we sign it now?

Nathan:

It's kind of a yeah, it's the linchpin to allow funding and everything else to go to go forward. it does cap our, I think I want to say it's got like an eight and a half or $9 million cap in here.

So there is, some mechanism to make sure that, you know, we don't approve this idea now and then, you know, have this project run away to 12, $13 million. Whatever it does have a does have a built in cap to protect us on that front to 8.5 figure.

Eric:

And ultimately this is a a issuance that will occur.

So they will be the ones that will carry the project management, the capital spending, hold all the construction contracts. And we as a district will just be a, continue to be a member as well and will be responsible for paying our fees. Our expense will be, an increase in assessments to cover this debt service financing that they'll assess us, which we will then assess, and our golf course rate covenant as well.

So it should ultimately be in, in and out. One of the things we're continuing to look at is what is the financing plan once they get to the state revolving fund, so we can figure out what is the timing for those cash flows? Is there a reserve fund? What's the coverage ratio associated with that? And ultimately, is it next year that that hits or the following year, you know, those type of things that we're working through right now.

But ultimately that will be a issuance and we just have to we will incur that cost as a member of the authority and then pass that on in our rates.

Tera:

Fantastic. It seems like staff has done a good job reviewing this. Paul, have what do you think? Have you seen it as well?

Paul:

I think you should know better by now. Yeah. I took a look at this. I think it was a couple months ago now. It's it's mostly boilerplate. That first paragraph is where all the meat is. And I'm fine with it. I know, Austin took a look at it. I know he I, I think he okayed this, what, a couple months ago as well.

I'm happy with it. There's nothing that offends me in here.

Tera:

Because I know the reason why we haven't done anything yet is that cost estimate was kind of soft.

Nathan:

Yeah. And so we did get the bids that we were waiting on. and they are all over the place. The low on there's there's two potential project packages that we're looking at.

Scope A would just be or option A would be just the compliance. So only the lining. And then the second one is includes the pump station. And then we also broke that out into the difference we if we've got to meet federal construction requirements for labor and costs. All of that to say, the cost a had a span of, I think 2 or $3 million, like between like three and five and a half or 6 million and then go be had like a $4 million delta to from low to high on a I think we were eight and a half or 9 to 12 too.

Jana:

How come we don't know if we have federal

funds involved?

Nathan:

Because of the so it depends on if it runs through the like the, the ..... I've got them too many acronyms in my head. SRF my goodness. so the the SRF requirements, I'm not as familiar with those. We weren't sure if we were going to have to meet the federal requirements or not.

If it came through the SRF loan, there wasn't that much of a change in the cost. It was probably a couple hundred thousand dollar difference between them or not. I can't speak much more knowledgeably or clearly on that, but.

So there's still a lot of question marks.

Leah:

Can you remind me when that project is supposed to start?

Nathan:

It absolutely has to be done by January or by December 31st, 2027. So it's really funding dependent on when we get it started, but we want to go as quickly as we can. Right now, we'd be targeting fall of next year.

Jason:

All right. Any other questions? All right. Very good. Thank you guys. we'll go ahead and close out that, review and, we'll move on to item number six, district manager, discuss a proposed new deputy district manager position. Nathan.

Nathan:

Thank you guys. So this is the same position that I brought to the board last month. Jana was, gracious enough to sit down with me and kind of go through and look at a few different things.

Describer:

On screen. Packet page 33.

Position Requirements

The ideal candidate should possess:

• An educational and experiential background in Civil Engineering with a water resources specialization, including experience in public water and wastewater utilities.

• At least 12 years of progressive experience, including 5 years in a supervisory or leadership capacity.

• Proven ability to manage complex projects and budgets, preferably within a municipal or special district setting.

• Strong communication and organizational skills for cross-departmental coordination and public engagement.

Nathan:

We were able to clarify, to clarify a few different aspects of this so, one, the qualifications we actually increased those. Let me get down to that page, really quick here. so we, narrowed the educational background, with some to somebody with a civil engineering degree with the water resources special or with specialization, including experience in water and wastewater utilities, we ended up increasing the progressive experience that we wanted or that I wanted to see.

So that came up to 12 years, including five of those in a leadership capacity. and then we also. Narrowed down the pay range a little bit as well to so we actually reduce the projected pay range from, I think it was 125 to 155 to 1 15 to 140. That has total effect in the potential aggregate. Really focusing on the idea that we want somebody that has a long extended background inside of utilities can really help us develop that integrated water resource plan, which is kind of the next evolution of, the Stantec study.

And looking at our potential partnership, potential other partnerships, collaborations, Parker Castle rock, however, really letting somebody come in with kind of that knowledge in that background, happy to answer any other questions or Jana, if you have any thing.

Jana:

I do. I wanted to give the board some of the background. So when Nathan and I met over this, as something I have experience working in local government is it's not a place for straight out of college kids to land.

It's a place to come when you already have been trained. You already are a self-starter. You already know how to do your career. And so I was concerned with the the lower level range that Nathan had, that it put somebody with not enough experience because this is going to be Nathan's number two. This is going to be the person that runs the district.

And I didn't feel like the experience that was originally listed would be that person just just straight off the bat. Number two, one of the things that I asked to be stricken from this was anything regarding water rights, because I feel like that's a very niche lawyer thing, and I don't think you really get that in an engineer.

So, that's just something from my experience. And I took from Leah, brought this up last meeting. She said, does that exist? Like we just when we were going through the scope, does that person exist? And to me, I think that's like part lawyer, part engineer. Let's focus just on water resources, not water rights. Those are two very different things.

And so I tweaked that. And then also I just used some of the pay based on what I'm seeing currently at my municipality. And I thought Nathan was being very generous with how high that pay he was giving, but I did actually pull it back some. So, and and we just kind of talked through what person we would look for.

And I think Nathan's got is, the right thing in mind. So I'm good with all of it. And I want to support the position and, and have gone through it. So.

Tera:

Thank you, Jana and Nate, that's great background. so I am a little concerned that this is so narrow that it has to be civil engineering.

Yes, that person does exist. Civil engineering. And JD and she works at Dominion. So it's possible, but usually what I've seen, is it civil engineering preferred that you're, you've got a little bit of your modifiers aren't quite right in that sentence, but that means the way this is written, one I think it's two specific because it looks like we've written it for a particular individual.

And, and I think it's two specific in saying that they have to have a civil engineering degree, because I think if they have the right experience, they could have any other engineering degree, doesn't necessarily have to be civil engineering or related degree. I understand your passion for engineering and, you know, Jim's passion for engineering, but the way this is written, as I've seen job descriptions, that seems way too narrow.

Leah:

I was just going to ask, so then, Tera, what what would you add?

Tera:

I would say more general language. It's, civil engineering preferred. Or perhaps they have enough experience that's equivalent.

I, I haven't written a job description in a long time. I would defer that to anybody who writes job descriptions, but this seems very, very narrow. And it seems a little problematic to be that narrow. Because what if you find a great candidate who has the right background and they have an engineering degree, but it's not a civil engineering degree?

I think we get sued because we said they have to be a civil engineer. I don't know.

Jana:

I think it's perfectly fine to put or equivalent, but I am going to respectfully disagree that that's too specialized because that's not that specialized. So and I wouldn't want an aerospace engineer or an electrical engineer or an industrial engineer or a mechanical.

Even. So, to me, I think those people are going to come with a totally different skill set that is not applicable.

Leah:

So that's what I was going to ask either one of you. my understanding is that most other metro districts, like their district managers, have a civil, like doing no other metro districts who have an engineer.

As a district manager, that's not a civil engineer.

Nathan:

So in terms of district manager qualifications, you're correct. The most common is a civil engineering background. There are a few around, that have, also like, operations experience backgrounds, like I do, public do like a kind of more of a general public management degrees also come into play fairly frequently.

There's not a lot of people that leave college with water district manager in mind is their direct career path. And so you end up with that. You end up with a pretty diverse set of, of experiential backgrounds, in there. But it is, generally speaking, what I have found when I was going through a lot of this is if somebody had a district manager that was like an operations background or had more of a public services master's degree or bachelor's degree, background, there was almost always an engineer under them to kind of bridge that gap.

Leah:

But I guess maybe I'll ask in a different way. Like if I'm a mechanical engineer or an industrial engineer or an aerospace engineer, am I applying for this role? My guess is no. Right? Right. Okay.

Jana:

And then also, Tera, you brought up that you felt like this was written for somebody. So as me not knowing that, I feel like that's not written for somebody because I don't even know what you're talking about.

So I don't know if you if that's a loaded question, but I feel like I read this and I could apply for that.

Tera:

I just say, I'm saying I think civil the civil engineer is too narrow. So yes, most of the, district managers that are around us, for example, Dominion and I believe Castle Rock and Castle Pines and most of the districts that are in our immediate area, they do.

Sam is, engineering, physics. So, I'm saying I get the engineering piece. I'm just wondering if, there are other degrees if there needs to be something that that isn't. It's just if you're not a civil engineer, there can be other. Yeah.

Jana:

And I'm okay with, with some language that says that I, but I just don't think that's too specific.

So that to me is what Nathan should be looking for. But I hear you on the one offs.

Tera:

My my comment was on civil engineering that it has to be a civil engineer. I think it's too specific the rest of it. Right. Because there could be somebody who has a engineering physics degree and the right, experience to I just think the civil part of engineering,

Jana:

I, I think I also really wanted to focus on getting the, getting our metro district a PE like to have that in-house.

And so when you say a physics, what is a physics engineer? Whatever it is, I think I'm really focused on that. Having that PE the way that some of the other small districts have. And I don't think you always get that with some of those other engineering degrees in the same way you got civil. So this is just from my experience, from the municipalities I've worked with, the different departments.

I feel like that's been the norm, so.

Jason:

I just wanted to interject one thing here. regardless how this gets worded, it does say the very top line should possess. It's not locking us into anybody in particular. It doesn't say you must possess, it just says you should possess these skills. So I don't think we're if we'd leave it the way it is in somebody with, I don't know, aerospace engineering degree walks in and is the perfect fit.

I don't think that precludes us from from hiring that person.

Leah:

I would like to take a step back, from focusing on specific words.

I voted no at the last meeting not because I'm sorry. I'll. Let me think. I want to word this. Firstly, I'll say your justification was was really well written. So as a board member, I really appreciated the thought and effort that went into it. And, I thought it was really rational and I was it was easy to follow.

And, and I don't disagree with hiring that function. I've been really open about wanting to have, experience on the board. And so I think this is a great, step to fill that gap. The reason I voted no is because typically when like we're doing headcount planning, it's after I'm going to go back to strategy.

Like we've got our strategic priorities and our investments. And then typically headcount supports those things. So if I'm looking at this like purely just from like a strategy perspective, I feel like what this is telling me is that our goal is to remain as is, as a district. And maybe that's not accurate and maybe that's not the point.

But to me, that's kind of if I'm reading between the lines, that's what I'm seeing and I still would like to explore merging with another district as one of our strategies. And so hiring for a really key position like this before we have fleshed out our strategy. Like that's where I'm getting tripped up. And for those who aren't getting tripped up their, or they feel differently, like I can totally understand that thought process in that rationale, too.

But like, to me, it just seems like putting the cart before the horse. I know we've hired like a field technician, but I see those like, operational things, and we were kind of replacing vendors with an FTE, and it made sense financially. This piece feels a little bit more forward looking and strategic. And so I guess so that's just where I'm coming from.

So that's more setting context. My question would be if we hired this position and then we merged with another district. Like what kind of impact would that have on this position? And I know I didn't word that well, but like I'm just trying to think like if we hire a position like this before we know what our strategy is, and then if we end up going that route, like, would it not have been a good call to have hired this position?

Jason:

I completely understand what you're saying, but whatever an inclusion looks like that's going to be negotiated at at a time of an inclusion. I mean, there's never a guarantee that anybody from our staff will be kept with the Parker inclusion. They actually, most of our staff before the inclusion and we lost people. So, so I think it's more important that we have, more of a succession right now, and have a little bit of redundancy in here.

I think that that is a glaring hole in our operations and, yeah. And I just, I think we need to address that.

Jana:

And Leah I want to add that, I agree. Got it. Like, I love your forward thinking. I love that you're bringing us back to what we need to do, which is make a plan.

So approve or agree, but I feel like we're kind of building a plane while we're flying, in that sense. And one one of the things I asked Nathan was similar to what you said, which was, this doesn't replace a vendor. This doesn't there's no this is additional money we're going to spend. Where is this money going to come from?

And and so that's kind of my thought process too, like this is the first time we're adding. And so thinking just like you, I said where will it come from. And Nathan brought up that it is replacing an FTE that never got backfilled. And so it was a I don't know the position specifically, but it was tweaking of that and I thought, oh, so moving forward, to me, that puts an additional person, you know, in place that was already there.

And then to Jason's point again, I think it's we figure it out as we go. I don't know if it's a bad thing though, so.

Jason:

Well, and basically when, when Tera and I were onboarded onto the board, you know, our existing district manager at that time was leaving the next month. And so Nathan was the position that he's trying to fill now, that's what.

So we kind of have not filled that position since Nathan's been on board this whole time. Yeah. And so that's what the position that we're trying to get filled.

Leah:

So Operation Manager what which is your position that this is instead of ops manager this is reclassified from his position.

Nathan:

And also and also Leah. Absolutely. To your point, that's one of the, I apologize for not being clear on this upfront, but one of my key strategic goals with this position is to support that strategic planning.

Like long term goal development. And then in terms of, you know, whether or not this person lands with the if we did do an inclusion, whether or not this person or I or any other staff members move across, I think that there's probably a fairly high chance that that would happen. Just that system knowledge is something that they wanted to bring across.

I think pretty much all of us. Let me think. I don't think there was anyone when we were working through this with Parker the last time anybody on staff that didn't have the opportunity to at least apply to move over, and then, like Jason mentioned, a couple people didn't, like, got kept.

Tera:

And I think that's a great question.

Leah. I agree with what's been said, because right now we do have where we how we are operating today, which is what we are responsible for. We have a huge vulnerability. If, you know, Nathan wins the Powerball and leaves the next day and creating that redundancy and that I think the other thing that we were wanting to do was really supplement some of those areas that we wanted to see strengthened with a different skill set.

And I don't think that it precludes any exploration of what our future operations look like, but it makes smart business to do it now. I mean, there's no guarantees. It's kind of like in corporate America, you, you know, they downsize or whatever. And people I don't think that that that would be a consideration for whether we would be, whether we need this position in the short term.

Nathan:

And I do have an update coming to the board. If not this evening after this meeting, then, in the next couple days, I've had some enlightening meetings over the past few weeks, I met with James Ecklund, I met with Ron Read, and I've also met with Sam Caulkins. And each one of those conversations kind of came with some long term planning implications that are largely positive.

I'm sorry,

Leah:

Who's the last guy? Sam.

Nathan:

Sam Hawkins is, Highlands ranch water. System. Okay. Yeah. And so be. I'll have that. It's a it's a fairly lengthy update. I'm waiting for a lot of our water resources staff to verify some numbers for me to make sure I'm getting you guys correct information, but, heavy implications on kind of the stuff that we're talking about and overwhelmingly positive.

Jana:

I like hearing that. Thank you Nathan,

Leah:

I do too, and thank you guys. By the way, like for weighing in, it makes sense. And I, I felt bad when I voted no because I was the one hammering on the secession planning. And then you're like, here you go. And it's like, no, I think I had one more.

Oh, do we remember what Jim's concerns were? Was it just kind of the varied background?

Jason:

I don't want to speak for Jim, but, he seemed, more favorable to it after, after the meeting. So, but I'll, I'll speak for him.

Jana:

And then being that I was a no too, clearly meeting with Nathan got me where I needed to be, so.

Tera:

And I don't recall specifically, but I think that it was more, in line with where Jana was, where she felt like the focus was too broad. I think, again, I can't speak for him. I'm guessing that he would be more comfortable with it being more narrow and specifically an engineer. Just my guess.

Leah:

And then so Tera, like for some of the language, like is do you feel comfortable with this in terms of how it's presented and like do you want to look it over and come with any suggestions

Tera:

or so I guess it sounds like I'm the only one that thinks that that's a little too specific.

I just think the way I'm not really sure where your oh, maybe the way it was written in the packet where it said preferred there was something preferred. The sentence that I had seen was something preferred and something preferred. And I don't see it up there. So maybe you changed it, but,

Nathan:

That might be in the job description.

01;02;50;05 - 01;03;23;09

Unknown

I definitely need this, it's going to our HR firm. It's got one person left to make sure that everything's lined up between the job description as.

Tera:

Well If the HR firm doesn't think that, I'm sorry, Leah asked me again.

Nathan:

Yeah, they haven't looked at it yet.

Tera:

Okay, so maybe when they look at it. But, since it is, if I didn't have a civil engineering degree, but I graduated from West Point and I had a bunch of experience, and I thought I was a good candidate, I guess I would apply.

Leah:

My husband graduated from West Point and he's a computer engineer, so I'm going to tell him to apply for this, because he's an engineer, right?

Tera:

Yeah. No, I said, and I had the right experience. Oh, shoot.

Nathan:

If you have, Sam wants to walk up the hill. I will personally hand him my offer.

Tera:

Yes, exactly. Which I doubt.

Jason:

All right. Are there any other questions? Hearing none. We can go ahead and close out. Item number nine, the district manager, and we will move to item number seven. And I am number nine. item number seven. And adjourn the meeting. Thank you everyone.