Work/Study Session
October 19, 2026
Transcript
Describer:
Castle Pines North Metropolitan District
7404 Yorkshire Drive, Castle Pines, CO 80108
Board Work Session
October 19, 2026
5:30 pm
I. Call Work Session to order
A. Roll call
A work session is held for discussion and information only, so no official Board action is taken and a quorum is not required
II. Finance Items
A. Review monthly claims for payments made from September 17, 2026 to October 14, 2026
CPNMD Board Work Session Claims Packet 10192026 (PDF, opens in new tab)
B. Review and Discuss 2027 Draft Budget
CPNMD 2027 Draft Budget Packet 10192026 (PDF, opens in new tab)
III. Legal Items
10.19.2026 Legal Status Report - CPNMD (PDF, opens in new tab)
A. Review September 21, 2026 Study Session Minutes
CPNMD Work Session Minutes 9.21.26 DRAFT (PDF, opens in new tab)
B. Review September 28, 2026 Board Meeting Minutes
CPNMD Board Meeting Minutes 9.28.26 DRAFT (PDF, opens in new tab)
C. Review HPMD Mill Levy Agreement
Mill Levy Equivalent Payment Agreement (PDF, opens in new tab)
IV. Adjourn
Board President Jason Blankaert:
All right. Good evening and welcome to the Castle Pines North Metropolitan District Board and work study session for October 9th, 2026 at approximately 5:30 p.m.. We'll begin. Roll call. Jim, just say Jim's here, but he's not responding.
Board Member Director James Mulvey:
Present. Present. Present. No conflicts. Sorry. You dropped out for a second. Thank Jim. All right. Jana.
Board Member Director Jana Krell:
Present. No conflicts.
Jason:
And I am Jason Blankaert Present with no conflicts. Tonight we are missing Tera and Leah. Hopefully they'll be joining us next week for the board meeting. We'll go ahead and close call session to order and open up item number two.
Finance items with a review of monthly claims for payments made from September 17th, 2026 to October 14th, 2026.
Describer:
On screen. TO: Board of Directors – Castle Pines North Metropolitan District
FROM: Eric Harris, Elevated Clarity (EC)
DATE: October 19, 2026
RE: Work Session Report – October 2026
Claims Submitted for Review
District Finance is submitting $1,484,958.86 in Payment Claims for review at the work session, consisting of $1,264,892.17
in checks and $220,066.69 in electronic payments.
All the invoices included in this month’s Payment Claims Presented for Review were reviewed and evaluated for compliance
with the Financial Controls Policy/Matrix.
- Notable payment claims related to capital projects include the following:
o City of Castle Pines – Pay App #2 – Monarch and Castle Pines Parkway Projects: $687,086.49
o Myers & Sons Construction LLC – Pay App #12 – Filter Beds Rehabilitation Project: $118,825.00
o T Lowell Construction Inc – Lift Station Upgrades Project: No Pay App (per Kennedy Jenks, project on
hold while waiting for some specific materials)
Financial Overview
A comprehensive financial report will be provided at the October Board Meeting, which will include an analysis of financial
activity through August 31, 2026.
2027 Proposed Budget
In accordance with C.R.S. 29-1-105, EC submitted the 2027 Proposed Budget to the Board on October 15, 2026. The transmittal memo and budget statements are included in the packet. 2027 is a significant capital investment year: the General Fund is essentially balanced, while the Water and Wastewater Enterprise Funds plan approximately $12.8 million in capital projects, funded largely from existing reserves. Highlights include:
- General Fund: Mill levy recommended to be held at 3.500 mills, generating $976,712 in property tax revenue based on the preliminary assessed valuation of $279,060,526. Revenues of $2,235,999 and expenditures of $2,251,349 result in a small use of fund balance ($15,350), leaving ending funds of $476,523 (about 21% of annual expenditures). Changes include new Hidden Point Mill Levy Equivalent revenue ($66,403), lower oil
royalties ($150,000) and City of Castle Pines transition items budgeted at $0.
- Water Enterprise Fund: Rates are proposed to increase 4% as recommended by Bartle & Wells. Operating revenues of $4.34 million do not cover direct operating expenditures of $5.73 million (+8.6%), resulting in an operating loss of $(2.09) million covered by Capital Improvement Fees and interest earnings. Capital projects total $6.63 million, plus a $3.0 million transfer to the Wastewater Fund. Ending funds are projected at $24.4 million.
- Wastewater Enterprise Fund: Rates are proposed to increase 6.5% (1.6% for Golf Course Reuse Water). The fund produces operating income of $1.33 million. Lift Station Renovations ($5.97 million) are the largest single project in the budget. Ending funds are projected at $2.52 million, down 51% from 2026.
- Items for Board consideration: (1) the pace of reserve drawdown, as combined funds fall from $48.7 million (audited, 12/31/2025) to $26.9 million, with financing expected to be needed for the HOA I/II Water Distribution System replacement; (2) the Water Fund operating gap and its impact on future rate setting; and (3) pending items, including City transition placeholders and the final certified assessed valuation, which will be updated before adoption.
Anticipated Upcoming Schedule (subject to change)
October 19, 2026 – Monthly Work Session - Budget Work Session With Board
October 26, 2026 – Monthly Board Meeting – Budget Discussion and Discussion on Rate Plan
November 16, 2026 – Monthly Work Session – Budget Work Session With Board (if needed)
November 23, 2026 – Monthly Board Meeting – Rate Hearing and Budget Hearing
December 15, 2026 – Certify Mill Levy to the Board of County Commissioners
Molly Janzen, Accountant:
Good evening. So we'll go ahead and jump right in. The memo included in your packet does convey the total amount of $1,484,958.86, consisting of $1,264,892.17 in checks and $220,066.69 in electronic payments. A couple of items to note the City of Castle Pines pay out $687,000.86 $687,086.49. Sometimes numbers get smart to, say, Meyers & Son for the Filter Beds Rehab Project v$180,825.
We did not have one a T. Lowell app. Did reach out to the engineers just to make sure we weren't missing it. And they because of the timing on some of the materials they were waiting on, didn't have a payout. So that's why that one's not in there. I'm going to not go into a lot of detail with the the text and the memo describing the budget, since that is kind of the focus of tonight, we'll just focus in on the numbers in actual budget.
So on the next page, pass the memo. See those dollar amounts for the, the checks and the electronic payments. And then pages five and six contain more information on the checks and the detail there. Okay. So I'll just kind of pause now and see if there are any questions of anything popped out that you'd like to discuss more.
Describer:
This whole session speaks about the numbers being shown in broad terms. Not really directed at the numbers but at the circumstances around the numbers. When directors are looking at the numbers they are looking at them in context not specifically, and asking questions about misunderstandings, not what is listed. Staff is answering questions but not referring directly to numbers as answers, so no graphics are show except the budget found on the CPNMD work session page for this event. The numbers are small on screen and not specified enough to warrant graphic enlargement. Please find these numbers published on CPNMD, Board Meetings and this date webpage as a reference for your own review.
James:
I, I had one, but I'll wait.
Jason:
Okay. All right. I guess that will wrap that section and we'll move to item B, the review and discuss the 2027 draft project.
Molly:
All right. So.
James:
Well, then I'll jump in. I'm sorry. I thought you had a question.
Molly?
Do you have a comment on one of the claims?
James:
Yeah, it was, and it's just a more of a comment slash question. I noticed and again, I'm going by memory, so forgive me, $57,000 roughly for the latest payment for a water line break.
And I'm just wondering, if we, you know, again, I'm just asking if we could just give a quick rundown. And again, this could be at the end, and it could just be verbal. I'm fine with that, but just a summary. Again, if you got a sheet of paper and you want to scratch some numbers on it.
How much? Totally spent this year on water line breaks and the subsequent repairs. And and if you can just talk to the breakdown of what that includes is materials and manpower, just split it down the middle. Or is it, you know, mostly materials or is it mostly emergency repair for people to show up? That was really my my question.
And that could be Rene. It could, it could be Nathan. It could be you as well. If you have that data. But I don't want to spend a lot of time on it. I just want to get the rough numbers to understand what we're spending per year. Thank you.
Deputy District Manager Rene Santin:
I have the data in front of me. I have crafted, starting 2013 to current.
I don't know that I'm current current, but I can be for the board meeting. As of 2026, I have $200,000, $199,728 for pipe repairs. There are..
Jana:
2026? For 2026. Say the number roughly? $200K. $200K.
James:
Okay. And, and that's that's through what, time period or just this year?
Rene:
Just this year.
James:
Wow. Okay. Thank you very much. That's the kind of number I needed.
And is it? Is that manpower or, you know, or?
Rene:
It's everything from, labor, you know, equipment rental And then really, the the actual repair is a clamp. So that's actually the lowest cost of digging a hole, filling it back of the flow, fill.
Jana:
Time and materials?
Rene:
And then paving with asphalt are the biggest. Okay.
Jana:
Just for comparison, what was it for 2025?
Since you have it in front of you.
Rene:
25 was $492,000.
Jana:
So almost $500K.
Rene:
Yeah. 2024 was $111,000. Okay. Okay. 235. Okay.
Jana:
So we did have a good year 25. Okay. Yeah. Okay.
Financial Director Eric Harris:
.... much for the last ten years. Yeah.
James:
Wow. Okay. So, yeah, just wanted that number in my head to to bang against, you know, what we could potentially save if we did the repairs or the replacement of those lines sooner rather than later.
But thank you. Thank you very much.
Eric:
And just one thing to add that we did on effective, I think it was the last board meeting we split out and repairs and maintenance section of the budget to actual water distribution, repairs and then repairs emergency response as well. But we don't split it out by materials and labor within that, just to be explicit.
We don't have that tract at that detail level within the accounting system.
James:
That's fine. Like I said, I was just looking at the big number kind of thing and. Perfect.
Jana:
Yeah. Also, so even just for the three years. I got it down. Are those all in the same area? Yes. Yeah. Cool.
Eric:
We'll speak to that here shortly in the budget.
Jana:
No, I saw that we were going to discuss that. So that's good to put some numbers to that.
James:
And thank you guys appreciate it. Great.
Jason:
All right. Now we'll move on to reviewing the budget.
Molly:
Okay. We can just skim over the summary pages and focus in on the line item. Or do you want to.
Eric:
Just very quickly.
Same process as we've done in prior years under state statute. We have to send you a draft budget as a local government by October 15th. That's why you received it last Thursday. And then the purpose of this is the review and the detail level to, take it to a board, a budget hearing next month, of course.
Right now we're targeting the Monday before Thanksgiving for that board meeting. We can bring it back for an additional work session topic when we have all the board members here. Of course, we may want to actually consider that again in November. So we have more feedback going into this. And then this will lead into the certification ability again by December 15th.
So it's the background behind what we have right now. So what we want to do is discuss really what changed year over year, as we all are fairly well versed in the operations of the district will certainly talk to the operations of the district. But I think that's what we want to address tonight. Okay. Okay.
Molly:
So we'll start with the general fund.
So on page 13 and of your packet, just going through and just reminding everybody that the general fund is typically the easiest fund to predict revenues and expenditures, with the primary revenues being property taxes, specific ownership taxes, some indirect cost revenue that comes in from the water fund and the wastewater fund, interest earnings and then some miscellaneous revenues.
You will notice that, focusing in on change changes from year to year. Our oil royalty revenues. We are projecting that downward a little bit, just looking at what we had in the budget, where we're at. What we're projecting for this year is going to be a little bit less than we budgeted. I did go back to, I can't remember the name of the firm that helped us do some analysis of, of that revenue.
And it is it was projected to go down. We had 1 or 2 years that were really high with cash flow from those, but it is projected to go down. Before I go move into expenditures. Any questions on revenues? You can see, the column on the right provides comments so that you can see where those numbers come from.
Again, this one is pretty easy to project. You will see that we did remove, the city of Castle Pines IGA reimbursable cost. We believe we're still on track to conclude the personal transfers from the district over to the city this year. And in that case, then, we would not we? Those costs should be ending, so. And we won't be billing them.
They've been providing half of the resources to, to fund those costs. And the main cost was to. Was to Level Engineering? One of the. Yeah. That have been helping with the parcel transfers. So you can see that that goes away. Any any questions before we move on to expenditures? No. All right. Yep.
Salaries and benefits. So here we have included, obviously Nathan, Rene, Jan and Kim, Susan are all included in the dollar amounts. Troy is is funded out of the enterprise fund, so he's not included in this. We'll talk a little bit more when we get to the enterprise, folks, about some other ideas for salaries and benefits there, but this one is pretty straightforward.
You can see that, you know, we're, we're, we're estimating to be just slightly over what, what we're projecting for 2026. Our employer rate, the parent employer rate does go from 15.8% this year to 16.84% next year. So that rate increases. And that's just a calculation of gross wages times that percentage. And that gets remitted to PERA every every month or every payroll.
Eric:
If I can just interject just to mention that. So the district's employees are excluded from Social Security wages. And so they have to opt in the same as teachers. Okay. I just want to make sure everyone was aware that.
Molly:
So that is it for salaries and benefits moving down into some of the other categories, professional services.
You can see start counting and payroll. We are projecting budget less than 2026. Eric, I don't know if you want to jump in on that.
Eric:
And this is the these are all the budgets right now. Nathan has requested all the contracts for all your professional services agreement, so he's going to bring those back to the board for discussion review at the upcoming work session.
Is that correct, Nathan? Yep. So this is a to all your professional service providers. I guess us included in this number. You will see more details of that number coming up.
All right. And then moving on. Some, so audit the next line item communications. Decided since this category is a professional services, to try to just limit what goes into this line item to those vendors that just provide the professional services so Sigler, EnLive, DTC print brokers, Castle Pines Connect and pulling out. We were kind of using this line item as a catch all for thinking of events that you have and buying things for public outreach PR so we just because this category is professional services, didn't want to kind of skew what we were looking at as services versus other items.
So, there was a communications, public outreach, under office and other that would capture all those different things. Try to keep this just strictly professional services. Otherwise, I think you'll see that the numbers tie a fairly closely to what we're expecting for this year.
Yeah, that's about it on that category.
Moving on to property and liability insurance. We are estimating a 6% increase that's based on some information that you had Eric.
Eric:
Right. So the district is a member of the Colorado Special Districts liability pool. So we get kind of a good premium, if you will, on, I mean, roughly speaking, a good market for insurance. So we've gone through and done an audit last year, and this year we're actually just in process right now.
So we were able to last year carve out all of the assets that are responsible for the city. So we feel very solid of what our premium is right now, at least a scope of all the assets. There's still some ongoing discussion on more of what should we or should we not, you know, insure should we ensure actually distribution of lines, you know, things of that nature as well.
So those are some further questions that we'll bring up in accordance with the board. Once we get more of an opinion associated with it from a, from a district liability perspective, things of that nature. But there's just a lot of things that with that. But right now, the same schedules that we have right now, they are predicting, I think what do I have a list right here, 6% increases that were published by the pool to all those members for next year.
And this is across the board, whether it be special districts or homeowners association, like everyone's premiums are pretty much going up right now, as you all know.
James:
Question. Yes. I understand going across the board 6%, but the significant reduction of assets that we've transferred to the city. I know you're talking globally, 6%, but will our payments or our fee go down for insurance due to the reduction in assets?
Are you still predicting it's going up?
Eric:
It is still predicting it's going up to assets we're already taking into account this year. Okay. Gotcha. Yeah. So the parks IGA, we weren't we're not insuring any parks or any sidewalks or any of that nature. That was all the city's responsibility. So that's why you had, the $125,000 this year going to $133,000.
James:
Okay. All right. Thank you.
Eric:
And we do expect that policies typically paid at the end of December. Pretty much. So we'll know what that number is. We potentially may know even before the budget is adopted, considered for adoption. What? The final amount is.
james:
Okay.
Thank you Eric.
Eric:
Of course.
Molly:
And moving on to office and other, Most of these again will align with what we're what we're seeing in 2026. You'll notice that we did bump up that software support line item we had had reallocated. Software was included in several different lines of last last year preparing for the 2026 budget. We tried to include all of those software items in this line item, so we missed that budget a little bit, but we bumped it up for next year so that it will align more closely with the costs.
Other than that, there's anything else. I think that was about it in that category. The next category, staff support. We did relabel, I can't remember what we called it before professional conferences or something. Yeah. To capture more what what was really going into that line item. Call that employee enrichment now.
Eric:
You want to speak to that a little bit.
Nathan.
District Manager Nathan Travis:
Yeah. So the we've used that professor that conferences in education really capture a lot of things. We pulled our Christmas party or end of the year celebrations came out of that. If we did, like, like a staff lunch or meals that came out of that. So it wasn't just like realistically, just fully conferences and education, so we just wanted to give it a name that was less restrictive to be more accurate .....
Molly:
And then finally the operation support, small tools, snow removal, underground utility locates and uniforms. We did because, SCADA?
Yeah, that that there were a few things that we had included in general fund. But really though, that those costs were moving over 100% to the enterprise funds between the wastewater and water. So that's why when it goes away, then with the firm commitments, we have the 1.5% of property taxes that the county collects. And then you'll see again, the IJA city of Castle Pines, those two line items going away, because we anticipate to be done with that this year.
And then our so you can see that we are projecting to start the year with a balance of $491,873, projecting an ending fund balance in 2027 of $476,523 so basically $15,000 use of fund balance, which is especially with this fund where it's very predictable, we could easily be $15,000 over at the end of next year depending on how things come in.
So very minimal use of amounts. We still feel like this is a good adequate fund balance in this fund.
Eric:
So the major changes year over year is we'll have the intergovernmental agreement that will be considered at an upcoming board meeting with Hidden Point to capture the Delta difference in property taxes, tax base, which will be captured in property tax collections in 2028.
So that's one of the big differences. And so we'll have the difference in the 125% factor in the water rates that won't be captured this next year for Hidden point. So that's the timing difference that we associated would have been enterprise funds down to general funds if that makes sense. But now you're in a pretty regular cadence of what the operations are anticipated to be for the district right now.
So we're only recommending the three and a half mills out of the seven mills right now as we related to this. It is not there was not over a 10.5% growth over the last two years. So there's no kind of a revenue limitation associated with it. But it's just it's just an ongoing consideration for this board is a do you need three and a half just a 3.15 or somewhere around there.
Just another consideration. But right now with the service plan that Paul has been submitting through the county and seeking approval. We are limiting at seven mills with a preserving three and a half mills capacity. And ultimately, I think the three and a half mills which has been in we've been doing for several years right now. So that's what's rolling into this general fund today, right?
Jana:
What I don't have a problem with it, but what's the main reason employee enrichment went up $30K?
Nathan:
There are so one inside of like, personnel reviews of trying to encourage staff to take more training opportunities. So historically, Susan and Troy. haven't really been doing anything. So I want to get them to conferences. And the other big driver is in partnership with, MSU Denver Special District Association is putting the program for specifically, Management of Special Districts Associations ..... and then, conferences that I haven't made and able to go to the last couple of years.
Jana:
Totally. Fine. Just curious. So the, I know training budgets at Aurora have gone barebones and and so when I see that one go up, I think that's it's great. I mean, it's important sharpness off. So yeah.
Molly:
Yeah. And that's a good point. So Rene and Nathan and Eric and I have met several times to kind of go through each line item and have incorporated the input from them. Obviously into this budget. So.
So moving on, again, because of anticipating that we will no longer, be eligible for Conservation Trust Fund because once the service plan is amended, we will have to notify the state that we are no longer eligible to receive those funds. And so if the way their agreement with the city has worked is since our service plan had not been amended, we were still directly receiving those funds, but then just transferring them over to the city.
So we will no longer need to do that since the service plan will be amended. So this budget will go away for next year.
Describer:
James was on the Zoom call. He arrives in person.
James:
Yeah. My next. Really?
Good timing.
I didn't want to get close. It was already feedback.
Eric:
So welcome. Moving on to the next page. We have the Water Enterprise Fund. Again, just want to focus in on what changes year over year. Again, we have the water operating revenues less operating expenses plus a non operating revenues plus a non operating expenses which is mainly capital expenses. So that's the kind of the cadence if you will that we go through this starting at the top collectively across the water services revenue.
What we did was we have implemented the proposed rate increase with the district's cost of service study that we did last year, that was completed last year, and that is a 4% increase related to water service charges at the associated rates with that. And the same thing with the customer charges. So really year over year, that's the only main difference related to the water operating revenues right now.
There's one that a little bit of dynamic revenues that reimbursable costs. That's purely what we invoice based on costs that are incurred from developers. Develop our reimbursement costs. So as we get those expenses, we rebuild out to develop ourselves a 1 to 1 relationship. So that's that's the main difference when we look at the 2026 adopted operating revenues in the proposed 2027 budget, is the 4% proposed water increased rate based on cost of service study?
Moving down. And now we get to look at this budget in those sections that we get limited over the last year annual charges really no material difference related to this. These are more or less, what the district's obligations are. The centennial capacity readiness charge, we get that of the year in the first part January of this charge.
Annual operating assessments for Chatfield, which Nathan should have may have this number before the end of the year, but it's assessed by the CRMC Chatfield reallocation mitigation company. Okay. Wonderful. So we'll get that updated number and it's just on pro rata share with Chatfield. And again maintenance obligations at Rueter Hess that are through Parker. So all these are more or less either by IGA or their dues that are related to performing services.
Centennial delivery charges. Again, this is the seventh month, seven month deliveries that we get during the winter. A lot higher this last year, obviously with the water treatment plant. And we expect seven months until the break for 2027. So that's what we're seeing this year.
Jana:
Wait can we go back to that. So it was 900.
Eric:
It's projected to be 900. Yes.
Jana:
Oh wait I thought the column on the right is what we're projecting.
Nathan:
Correct. Well so this is projected this is 2027.
Eric:
Yeah. And then 2026 budget is that second column.
James:
Okay I thought it was normally like 400.
Nathan:
That's the capacity readiness charge for hundred thousand.
All Speak:
Okay. Yes. It's just projected actually. Yes.
Jana:
Okay then.
But we do always pay the 400 that Jim was referring to.Correct. I was familiar with. But then in 2026, we did have to pay the 900 additional and then. But so I guess what my question is for me, but how come we're not projecting 900 again then for 2027
Nathan:
The true find something wrong.
Jana:
Cool. Easy answer. Okay..
Got it. Yes. That's correct.
Nathan:
And don't hang your hat on those numbers. We've got some moving parts. Let's make a change in terms of what we're taking deliveries and we're not. I found out about ten minutes before this meeting that we may not have access to our renewable water for, like up to six weeks, due to some repairs on the ditches that transfer water from Chatfield into the reservoir that we're actually picked up, we'll have that.
Jana:
But that wouldn't equate to 550 over. Okay. Gotcha. Yeah.
Jason:
So this will stay online through later here in the fall or is it again on the spring?
Nathan:
I will give you a comprehensive update on Monday.
James:
So I mean we're just stuck with that charge because we can't get access to it or.
Nathan:
Yeah, I mean if we take any water at all during the year, if we want to take any water, we're stuck in the $400,000 charge and we will have.
James:
No, no, I wasn't talking about that. But you talked about a six week potential delay.
Nathan:
No. So that we don't pay the there's a $400,000 charge and then everything after that is volume entering, so there won't be any deliveries. We have to pay for.
Eric:
So like $350,000 security Polly mentioned. We get a bill from Ila transfer. Yeah. Wonderful.
Moving down, you have the operations section here. A couple different things. Driving changes within this category. Some going up, some going down, some are pretty standards such as chemicals and things of that nature to we have our operations staffing contract within here as well. We have a decrease in water meters. We have $100,000 budget for water meter replacement this next year.
But of course the next big thing is the water program, if you will. It's like kind of like the radios and things of that nature that's that increase that the board considered for the $220,000.
Professional services. No real changes related to that as far as this year to, to next year. You have your back full engineer and allowance for engineering services with Kennedy Jenks, water rights consultant with Jane Water consultants, your water accountant. And then a decrease associated with the water treatment site plan and own and manual development.
So you'll see that go down.
Jana:
So on the reimbursable we're saying that that's offset by we're putting it as a separate line item because it's offset by renewable observed reimbursable cost.
Eric:
Yes the $36,146.
Nathan:
So those are largely design review and inspections performed by Kennedy Jenks for new construction. Okay. So Kennedy Jenks still bills us, but then we bill the responsible
Jana:
and pay it back.
Molly:
And that's why you see that dollar amounts exactly the same for the revenues and expenditures.
Eric:
Right now no markup is just a dollar for dollar. Okay. So that's the professional services related directly to the.
Jana
Should you mark it up I mean you're doing the bookkeeping for it. ...
Molly:
Something to think about.
Jana:
Yeah I mean it’s a pass through but I mean you guys are having to do the bills for it, even a small percentage just to pay time.
Anyway, something to consider.
Eric:
It's it's been a long time. There's some original developer agreements that we'd have to go back. And the way that you invest to get a little bit more, but that's something we probably should do anyway, so we'll take a look at that.
Repairs and maintenance. This category is all too well. We're all too well.
Jana:
I'm sorry. I'm still on the above one water resource study at 100. Can we touch on that? What the plan is for?
Eric:
This is a reference to the regional water opportunity.
Nathan:
What would be separate from that? So it would ultimately be a, let's say this open meeting.
So at this stage it would be, money that we could put towards a feasibility study for partnerships. For water partnerships.
Jana:
Okay, okay got it.
James:
Is there anything like Castle Rock just recently announced which coupled along with Parker impacts us at all. I don’t think so. Yea I don’t think so. okay.
Jana:
But you're budgeting for it thinking it, so. Okay. Yeah. Okay. Wait. Hold on. And then I think that was my last one. Okay. Yeah. Okay.
James:
Jana Sorry. I keep butting in. I apologize.
Jana:
It's a casual meeting. That's why I work session. Yeah. It doesn't. No worries.
Eric:
The next category repairs and maintenance. Collectively, we had a budget of $1.6 million within this this last year.
Again, we we split out this $750,000 that we had in this year's budget to $500,000 to distribution, repairs and then distribution repairs of emergency response, another $500,000 in next year's budget proposed. So that's $1 million projected repairs and maintenance that we have within this budget for next year, for this next year. Correct. So that's what may drive the allowance based on history that we have here.
James:
Okay. Just I mean, everybody thinks that feels right. Okay. Yes. It’s just a heck of way to spend your money I guess.
Eric:
Hopefully I'll bring the good news. And once we get done with the capital projects with that, salaries and wages, feel free to step in here. So we did have an a hiring plan to Nathan will eventually propose an operations manager. So right now we have that hiring plan starting in March for a new operations manager. So .... that or not?
Jana:
And if it's not? Now, do you plan on talking about that at another study session more in depth where we get to read a scope or what would you even call it, like a job description?
Nathan:
Yeah. So we did this stage. We just want to make sure we've got it identified in the budget. That's all. We'll follow-up with financial
Controls plan to before anything. This isn't an approval for the position. ...But then yes we'll do a job description business case.
Jana:
And that's built into where? Because to me, I don't see enough money for it's it's a first salary.
Eric:
Scroll down Nathan.
Molly:
It's 50% water and 50% wastewater. And again, not for the entire year. Kind of looking at it starting later in the year.
So the first line item...
Jana:
Right now is for salaries.... So 40,000 for every person that's salary.
Nathan:
Well so my like we're largely paid out of the general fund. Like we're kind of split around.
Jana:
Oh so these are pieces and parts of a whole. And this is the water park. Got it. Okay.
Nathan:
So the total the total salary we're looking at about 140.
Jana:
Okay.
I follow.
Molly:
Yeah. The only two individuals right now directly charged to water wastewater would be this new position.
James:
And then charge would be 100% wastewater,
All speak:
or 50% water..... 50/50 ....Okay.
Molly:
Where Troy's is 80/20. Okay. So.
Eric:
Great. So that's the update to the salaries and wages. Again not seeking. It's just numbers at this point based on that perspective. By moving down to utilities. No no new utilities if you will. Related to this. We do. We did implement the new rate structure for the wells and some of the accounts. Nathan did a big study this last year.
We had some increase, some nominal decrease in our rates based on the hours of day. And so some new great codes for some of our stuff working with core. So it's kind of it's very volumetric, you know, essentially more water that's we have to draw the ground, more water that's actually built. So the revenues, there's some sort of offset of correlation there if we don't have that detailed data, but we do have some history from the dollars and census.
So that's that's what's drove this budget. That makes sense.
James:
Yeah. I have a question though with the offset. What do you mean by offset. Is that leakage in the system or is that just the numbers don't match up or.
Eric:
They do match up would just be more more water is drawn on the ground is more water that would be billed to the customer.
Yeah. That's that's all I'm saying.
James:
I've got it. No problem.
Eric:
Right. So at the end, same as last year's budget, we are we are projecting around a $2 million operating loss within this fund. Last year, we had a $1.8 million operating loss. And we'll get into why that is in the next section.
Jana:
Okay. I have a full of questions. I'm sorry. Okay. But at a million for electricity, can I bring back the concept of solar panels like would you do we want to look into that because per say we pay, we look into solar panels.
We could still be paying them off $1 million a year with what we're paying now, and we'd be on the same level, but then we'd be paying down towards being more self-sufficient with that. So I don't know if that is a ton of electricity, and I realize that. So I don't know. Can I look into it? Can I?
Nathan:
Yeah. I mean, we can we can look into it.
Jana:
Is there some reason it's just.
Nathan:
I think the and I'm not an expert to be honest with you.
Jana:
None of us are. I’m not an expert.
James:
Don’t say that. I design design solar for spacecraft, you’re on to something.
Jana:
So none of us are even, you meant that.
Nathan:
The ground where you put it is really going to be a our largest limitation.
Jana:
The real estate to put solar.
James:
Yeah. Large installation like that.
Jana:
Jim, is there any creative opportunity here then. So instead of just throwing a million to like paying for something.
James:
I mean, solar works, but, the biggest problem you have is you don't produce in the winter because of snow. Oh, and you have to pay maintenance to clean them.
And since it's a above ground installation, generally, like if we had some big ass buildings, we could we could completely cover. That's still only going to get you like 15, 20 kilowatt hours.
Jana:
It's not going to give us $1 million.
James:
It'll take a bite out of it. Like you said, I think there's some goodness there that we should at least see from a how much area we would have to place solar.
Like, I don't know what we own anymore. We gave pretty much all the flat space back to the city, right?
Nathan:
I mean, there's the person trail system. There's not really a lot of flat space to work with. Anyway, it was all trails.
James:
To do it effectively, you need obviously a southern exposure, southwest exposure, and you need a big flat area to lay them out.
And you're probably talking, you know, ten acres, five acres to kind of replace that one for one. But, you know, we could talk about 20%, something like that, but you still would then you would you would build in the expense of maintenance, purchasing, maintenance, installation. And it would probably be several hundred thousand dollars that we'd be paying off in 10 to 15 years.
So you may not see that. That's the whole problem I see with terrestrial solar is by the time you pay it off, it's worn out and you got to go buy another. It's almost like, okay, you know what I mean? You really have to work the numbers and that the margins are pretty small, okay? Because of environmental effects and having to clean it.
Nathan:
Interesting. In the run power table down.
Eric:
Nathan I have some contacts for you so.
Jana:
I mean we don't have to look into it. I think that that is.
Eric:
It's a sizable cost.
Jana:
And then the other
James:
I'll do a spreadsheet analysis for you. It'll be like ten lines.
Jana:
It'll be million dollars. And so it's worth the ask. Yeah.
Rene:
It's so one of the things you'll responsible, with the bigger tank, that should allow us to phase our timing of when we pump.
Which are we on time of day before we will? Yeah, we'd be able to. So we'd be able to gain that system a little bit by you.
Jana:
We can change the time that we're pumping to vary our need.
James:
And that's the beauty of getting a larger tank, right?
Nathan:
Yeah, yeah. And the big the biggest thing is demand charges when we start the wells.
So what we'd really we wouldn't necessarily change the time of day that we're pumping. But the idea is you start your wells at low demand time and then they never shut off until you turn them off and decide you want to switch to a different well so. Okay. Because that, that start up like physically starting the well is a significant portion of that cost.
So that's why we’re cycling the wells now, with a larger tank we don’t have to do that.
Jana:
Okay, so might I see a difference next year?
Nathan:
It’d be a couple years we’d have to build a tank first.
James:
We took $1 million and made a bigger tank.
Jana:
No sorry I'm thinking of the treatment plant. Sorry okay.
Eric:
Starting the wells with ran through SCADA. Is that correct? Yes. Okay. Okay, okay. Okay. So. Yes. A sizable cost? And that's we try to put some focus in on that. Right now the district has how many different power accounts, Molly. It's roughly like 25 to 30 different accounts that pay monthly. So it's.
Just do the location and accounts and how they were dedicated to us and the rate codes associated with each as well. So it's quite a bit.
Nathan:
Well .... booster stations, wastewater stations.
James:
And can you send me the total power that we use per year.
Jana:
You do not have to make a spreadsheet.
James:
But it's literally easy because I mean you can.
Typical panel on Earth. I mean, it's 1500W/m². So you get this area sizing in like two seconds. And then if you know how much total power you need.
Jana:
Nathan send him.
James:
And then the other the other bad portion of it is that we do any pumping at night. Obviously we're going to be pumping at night. You would need a storage system for power.
Eric:
Those are pricey.
James:
Yeah, batteries are expensive.
Nathan:
Well, and there may be with the battery storage, there might be some opportunity there. CORE is looking for sites that they can stash grid backup batteries power, battery storage we talk through at at their executive meeting. So that's a that's a conversation.
James:
And a lot of other places out west, some small communities are pumping water to elevation and then just running a turbine at night as their battery system.
Yeah. So they basically just dropped a water through a turbine, generate electricity from it. So it's like a mini dam. But they're basically just filling up and dropping in 30 to 50ft to get electricity out of it as their electrical storage.
Nathan:
So, you know, interesting. Like you can go check out the reservoir does.
James:
Yeah. But you know, again, that's an alternative thing that, you know, as a water utility might consider versus chemical battery. You know. But again there's maintenance issues with all this stuff. But pretty low for spinning Turbine is pretty minimal. That's why it's nice.
Rene:
Yeah. We just don't have anywhere to pump into.
James:
That's what I say.They've got a tank up there nearly 5 times the size down.
Alright. Doesn't have to be clean water.
Eric:
Next section is the water. Non-operating revenues. One of the big drivers to backfill that deficit over the last few years of the operating income was just the amount of investment earnings that were receiving last year's audit in 2025 is $1.8 million, $1.85 million. This year we're projecting $1.5 million. We're projecting about a million next year in revenue, looking at our kind of cash balance, roughly where it's at right now.
Granted, interest rates are going up right now, but we are having a pretty large drawdown associated with those monies as well as we all know. So basically, this non-operating revenue, $3.3 million is meant to backfill a little bit of that operating revenue. So it was always intended to invest in earnings, which is a non-operating revenue would always kind of equalize that if that makes sense.
We're slightly eating into those capital improvement fees a little bit, which are those fixed charges if you will. Now that's I put that qualification in and then I want to jump down and discuss capital down, Down below. In this year's budget, we had $13.1 million in capital expenditures. We're projecting roughly three $13.9 million based on timing associated with some of the projects that we've discussed before, mainly like the change in scope on the Castle Pines water line project that we've discussed as well, driving that next year's budget for 2027 that we have proposed is $9.6 million.
If we go to the next page, let's look at this breakout. Keep going to the capital summer. You don't mind? It's past. Yes. Right here. So we prepared this the schedule last year. When you look at this, this is a, across the top axis. You have by year down below, you have kind of bucket term the capital projects to extent of how we the district manages those.
The top section is what would be considered like a professional engineer maintains that the districts engineer Kennedy Jenks. So you can see some familiar projects associated there. Further down what you have is what we're calling non-operating or maintenance capital, which is essentially projects that are intended to be ran in house. Right now at this time. And so, you see kind of a list of those projects like the, well, programs, you know, well, integrity program, well, electrical program, some of the meter replacements, those type of projects as well.
So now we have the district has Rene on staff. So that opens up some capacity to potentially manage some more of these projects internally versus having a full scope of a professional engineer or rather an engineering firm. Manage those projects if you go to the top, Nathan, real quickly. So I want to focus in on what? Yes.
James:
Do we have a plan for that?
Or are we just talking about it?
Eric:
Mainly it's around the Wells replacement projects going to be managing those projects right now.
James:
But right now, is there a take out from one place and give it, you know, put it back into our management and we're taking it away from some of the Kennedy Jenks or is that. Yes. What you're talking about?
Eric:
Sorry. Thanks. So this is we had this plan last year presented, so I want to change. Like that was in our cost of service study. So what I want to briefly discuss is what changed from last year's three, 3 to 5 year capital plan that you saw and vetted considerably to what changed this year. And this is not only looking at 2027, but also 2028 and beyond.
So in the water tank project for tank three, we saw this budget increase by $500,000. And that's what the but that's overall projecting some cost savings with the overall capital project system, mainly eliminating the need for a pump station. Is that correct? Nathan? Rene, is there anything else you would like to add to that project? So that brings a total project to $6.1 million for the water tank.
Three. Okay. In addition, there are some rehab costs in there. Associated with tank one of removal. Is that correct? So that's what kind of changed in scope from last year, this year as a component of those costs. In addition, you see the Wellington Place 12 inch water line connection for $550,000 in this year's budget. Nathan and Rene I don't know if you would like to speak to that.
Nathan:
Yeah. I mean, Rene gave a kind of a brief overview. I think the last board meeting talking through the alternative, larger tank location and then the connection that we would need to make to provide the redundancy of not having a tank on our side.
And the South district, that's the Wellington connection.
James:
And That's what you need to control that work. Yeah. Okay. Sounds good to have those conversations because meeting the meeting I lose context.
Jana:
No. And I forgot to and I'm trying to go back to my notes. But. So tank one and tank two exist. Tank three does not exist. Right. Okay. So then this, these projected costs.
Rene:
Okay. Larger tank three at the.
Jana:
But then the cost for 2027. The $750 is that for design services for it or $750 what?
Rene:
Large Largely design.
Jana:
Then how come that's not on a professional services?
Rene:
Because it is a project.
Jana:
Oh it is technically it's capital project. So it's okay. And then, then the 575 for tank one and tank two for Kennedy Jenks is what what are we proposing?
Rene:
That would be the rehab. And and these numbers reflect taking out tank one right.
Nathan:
So that's the rehab of tank two.
Jana:
So we did since I've been on the board, we did rehab A we lined a tank.
Nathan:
What did we have done several process tank rehabilitations at the water treatment.
Jana:
And that's just small tanks in the thing that get cleaned.
And that is not a water storage tank. Okay. And then, okay. Then we when we get to the million and 2028, are we starting to advertise for a bit?
Rene:
That would be beginning of construction. Yes, in the winter.
Jana:
So you're you're going to start making pay application apps to the contractor and that's your millionaire okay. And then you'll finish paying it off in 2029.
You got it. You. Yeah. Okay, I think I follow. Thank you. I'll forget again. Thanks. Okay,
Eric:
So that those are the main updates to the capital projects on the water side. While we're on this page, I'll just briefly mentioned the wastewater lift stations. Those numbers are just updated for timing that we have right now. So that we'll get to the wastewater side here shortly.
Moving down to what would be considered the maintenance capital. This is a new project that was not identified in the cost of service study this time last year, which were called HOA1 one, pre-1994 construction. So, due to timing, talking to Rene and Nathan about this, this was $1.5 million in 2027 and then nine, $9.5 million in 2028.
The idea is that that entire project would need to be financed. Associate. So roughly, looking at debt service numbers, we were looking with current interest rates for and three quarters to 5%. We did a 20 year, 20 year bond on this rate back bond. We're looking at about $880,000 in annual payments associated with that for a 20 year.
We went up to a 30 year. It was $731,000. Timing for that. We'll have to get a little bit more nailed down on the construction and use of project proceeds associated with that. Either way, it could be issued next year. Those funds will be sitting in escrow, earning some sort of interest earnings, you know, roughly 3.6%.
So the district will be paying a differential between 4 and 3 quarters versus that percent. And then we draw down on those funds. Or we could issue it later with any interest rate risk. And then just reimburse the district's project funds as well. But the idea being is the district would have to work with a financial advisor.
That would probably be roughly about $30,000 worth of cost of issuance associated with that and getting it through a bond council and everything as well.
Jana:
And does any of that invoke a vote to the public?
Yeah, because we'd be working through the enterprise fund. Would we ever put it out to vote?
Nathan:
Only if we were going to pay for it.
Jana:
That's what I do. And we don't want to do that.
Nathan:
No, there's no for us to. Okay. I think I think, I mean, we could. I like my and this is just my personal preference to. I like pulling money in through rates and fees when you can just because that's a lot more transparent.
Jana:
And you gonna model options.
Eric:
Yes, we'll have model options as well. We're not financial advisors, so the district would have to engage with a financial advisor that would give would shop the market as well for you as well.
James:
Yeah. I'm just talking like as far as you know, a 10 or 15 thing.
Eric:
We'll play options in that present value and all the metrics associated with each.
Nathan:
The, the really good news on that project.
So the, the proposed expenditure, the kind of assumed expenditure, you're actually has an opportunity to go down. We've been working through the pipe condition assessment. So we had the pipes that we knew were bad. And we've had a bunch of like a few neighborhoods. We identified 12 or 13 physical potholes we were gonna do, just because we weren't sure the condition so far across the board, those involved in properly installed wrapped pipe.
So the area that we need to replace and getting continually smaller, we would have had that all wrapped up this week. We're actually late last week, except we found a pipe. We checked the pipe last week on Friday. That I was absolutely positive we were going to find unwrapped and in normal condition, and it is one of the best pieces of pipe that I’ve seen for is, so we need to kind of expand our pothole, that specific neighborhood, and trying to piece together what is wrapped in and the condition it was. It’s kinda a head scratch right now.
So we're going to need less invasive potholes, with more of them still on track to have the overall condition assessment prior to budget. Then I can kinda put together a quick little interim this is where we’re at for the board meeting.
Jana:
Have we done a bond in past decade?
Eric:
You do have one right now. It's out of the way. Center is the Chase loan.
Jana:
And that's covering the cost of what
Eric:
The PCWRA expansion. That was roughly going back to memory.
This is ten years ago doing, you know, $5 million. Yeah.
Jana:
And on a 25 year?
Eric:
That is on a 15 year.
Jana:
I don't I'm just kind of thinking our debt. So. Okay.
James:
It sounds right. I just had to look at it now. Yeah. But you know, essentially all our repairs are done in the specific areas, you know, mostly.
And then, you know, we could potentially recover that money that we're allotting for replacing pipes piecemeal. Right. So our budgetary. Yeah. We're going to pay for one lump sum to do a sort of a larger repair of it in future years. Do we perceive that we would need to reserve the same amount of money for other areas?
Nathan:
No it would drastically go down.
Yeah. So, okay. Ductile iron pipe, has properly installed ductile iron pipe that gives you 100 or about 150 years.
So it really is just the install condition of these feet, filing these first few filings with the rest of the. I think it would make sense to put some level of like reserves so we can kind of build that up over the next 20, 30 years. But in terms of like actual line breaks, those things will fall off.
a Cliff, once we get them installed.
Jana:
Ductile iron pipe is supposed to last us
100 years? 250. Then why are we putting in PVC?
Nathan:
We also I mean, PVCs got a similar lifespan. Yeah, it's a little bit less ductal iron. Part of it is that you've seen ductile iron, where we have iron pipe in the ground for 150 years. We can confidently say that.
Jana:
And we haven't put in PC for 100. I get it.
We don't have the background. Okay. Thank you.
Rene:
And I just want to add to that number that I gave the $200K that we spent so far. I think it's the latest items, but that's only identified pipe repairs. We also have valve repairs. And the valves in those areas are also bad.
James:
The other. The other thing is, is there any training or at least awareness, like, because you guys are doing repairs and I know you said you're like, barely turning the valves on very slowly and we're still blowing out stuff in adjacent sections of pipe.
Will that be mitigated as well?
Nathan:
It would be. Yeah. Okay. One of the ideas that we have even moving as early as next year, once we kind of have this, I kind of find an actual replacement schedule in places to actually stopped maintenance in that area. If we're going to replace the next couple of years anyway.
James:
There's no there's no going.
You could just break more stuff. Yeah.
Nathan:
Yeah. So, we're going to kind of just hold off on we'll still do a hydrant maintenance just because virus. But in terms of like valve, and system major maintenance. Larger blow off or larger flushing we’ll just not do that in that area.
James:
Just let it stay the way it is for awhile.
Nathan:
Yea kind of be nice to it, we pull it out and that's okay. Once we get into it and actually start replacing the night. But I mean, it's it's reasonable to expect to have a significant number of some kind of emergencies to play through while we go through that process.
James:
Is that factored in into the replacement costs as well. I mean, you're going to have on site.
Nathan:
We've talked about it. You have some level of emergency, like actual inventory on site. And then, whether that's, you know, we have to if we have a project large enough like that, I guess the way that I see that in my mind is maybe we can get two construction crews working, which will allow us to replace stuff a lot faster.
But then also, if something breaks one of them being stopped, move over and do a quick repair.
James:
Okay. I mean, I think it's probably a certainty, right? Yeah.
Eric:
Great. Moving down one item, we just wanted to explicitly call this out. The district has three different types of wells. One of two lower Dawson wells are available for you seven, two, seven you know, that are available to be used Arapahoe Wells and then to Denver Wells as well. So really looking at the type of costs that are involved with this is associated with like the the well electrical program.
So within. Well a four, a seven we're let's proposes to fix the electrical motor. So that's 1.1 that we have in the budget.
Nathan:
Yes. So the 1.1 is for three Arapahoe Wells. To replace the soft parts, VFDs and some 70. So that's the and that'll give us a lot more operational flexibility too. But that's a three, a five and a one.
Eric:
And then the next one is the redrills essentially looking at that.
So you see the schedule associated with each of those going, going out .... years.
So those are the those soft starts the redrills and the the HOA one and two proposed construction time frame. And then the extra $500,000 for the tank three rehab project are the main changes associated with the capital project from last year to this year that we want to report. So within the the 2027 column, that's what you have in this year's capital budget.
You have an abbreviated pages. So what we'll do is we'll work with staff based on anyone's input, but we'll keep refining these numbers going into the next several weeks to bring them back to you all. But, but please. Of course, provide us feedback on that going forward.
Nathan:
And I'll have a broader update on where we're at with the current well situation and plans.
Eric:
So, all that being said, this year's budget, we're projecting to be roughly $32.7 million and ending funds balance available in the water, going up pages. I think that will be good. We are projecting to be at $24.3 million this next year, which is a little bit under where we expected to be with the cost of service study, based on what we have in those differences that we talked about before.
So it's roughly 500,000 to 750,000, some of that ballpark range based on last year's cost of service study so we wanted to report that.
James:
Really eating into things.
Eric:
Yeah, there is quite a bit of capital obviously that's being spent right now. Right. So the best part is it's kind of a little bit of a little bit of the K shape. We were anticipating these cost of services.
And then the reserves build back up again over time based on what is necessary. Great. But then I'm going to pause. I'll move it back over to Molly to talk about the wastewater. Molly.
Molly:
Alright. So wastewater. Page 17.
The operating revenues again we've built into the projection for 2027 the rate increase identified in last year's rate study, which was 6.5% for this fund.
Coming down into expenditures.
We have the PCWRA sewer fees for estimating an increase of 5% right now. Can we get down into operations? Most of these line items, we budgeted an increase of 4%. The SCADA of line item. You'll see that it's a little bit more, just moving some of those general fund costs over. Get down into engineering.
Pretty, not a very substantial line item in this fund, but rejecting 4% increase there and we get down into repairs and maintenance. Looking at what we're spending this year, we do expect to spend a lot less next year. So you'll see that a big difference between what we're projecting this year in that $693,000 proposed budget, $345,000.
I don't know if you want to talk to that a little. I know you have quite a bit.
Nathan:
Yeah, a little bit. So the kind of went back and forth a little bit. I'm going to do with this $250,000. It's similar to where we've carried it before, this kind of reminding the board the $600,000, we just did a bunch of manual repairs that we weren't anticipating, but we got our system to a really, really good place.
My intention here is really to kind of level set this line item. I don't expect us to even come close to necessarily hitting this $250,000. We've just never had our system in this good of condition. So I'm not really sure what to predict that at. So our expenditure or actual expenditure this year will help us kind of reset that level going forward.
But we'll definitely we'll be well below the $600,000. And I don't think we'll get to this $250K unless something catastrophic happens.
Jason:
It's been a rough couple of years.
Nathan:
Not as rough as the couple before that though.
Molly:
All right then moving down salaries and benefits, wastewater specific again, including 50% of an operations manager starting a little bit into the year and then 20% of choice costs included in this line item or in this category.
Moving down to utilities, roughly $167,000. They're just keeping a moderate increase of 4%. And then coming down into wastewater. We are projecting a transfer in from the Water Enterprise Fund of $3 million. And to cover some of the lift station, project. And we'll be talking more about that, this year and next year. And then do you want to talk about the capital projects?
Eric:
I can talk about that. Again. I kind of we had discussed this is going to be your money's coming out of the water fund into the wastewater fund, and then it's going to be a promissory note between the two, if you will, to get eliminated on the whole. But that was projected in our cost of service study as well, just due to the fund balance that was in our wastewater fund going forward, mainly due to the drawdown for all the lift station rehabilitation projects that were occurring.
So again, we're finishing up phase two project this next year for the wastewater lift station. So you see that pretty large expenditure proposed of $5.965 million and everything else. It's it's really just that debt service piece is associated with that. We had the debt service on the first line item related to the JP Morgan Chase on a $346,000. The $202,000
Is the repayment back, depending on timing of that. But we'll have an amortization schedule for that. It's just it's money's coming out of this fund going back in the water enterprise fund, just doing that for a budgetary purpose. And then down below we have the, the debt service component. It's not the district debt service is just assessed by a fee of $393,717.
And that's based on our share of the that reuse pond down at PCWRA. So we just call it out separately you know it’s really just going to be a fee assessed by PCWRA. So it is debt service but it's PCWRA’s debt. So that's really the number of those costs right there. And then change in funds for a roughly $4 million or sorry, $2.6 million for this to a ending fund balance is $2.5 million on budgetary basis for the wastewater fund again, combined with the Water Enterprise Fund is roughly about $500 to $750,000 less than what we had in our cost of service fund cost of service study.
Excuse me. So a lot of moving parts with this, but really that non-operating expenditure section is to capture capital expenses as well as debt service.
So with that, if you have any questions, I know we address them throughout this time frame, but we're taking a comments back and get through a final revision and draft over the next couple of weeks, and we'll bring us back to another work session. And then we'll bring it to a budget hearing at the end of November.
Jana:
Have we been spending 5 million on Lift Station renovations every year for.
Nathan:
No, it's just a budget. So we didn't we. It's it's a yeah, it's a budget I carried for a long.
Jana:
Then how come. Can I see the top of the column here? Yes. I'm sorry. Okay. So then how come on the actual. It doesn't say zero since it wasn't used.
Nathan:
Because we had some expenditures that came out of there.
So like Lift Station three, and I'd have to go back
Jana:
And I lost it. Where is it? Sorry. Okay. So then...
Nathan:
So this is also so 2025
Jana:
I don't know. It confuses me because the way I'm reading it. Yeah. So 2020 did spend 5 million actual in 2026
Eric:
Capitalized expenditure. Yes. You had roughly $11 million project.
Jana:
But we did.
So we did in 2020. Yes I follow and then we're going to do the next. Yeah okay. Then it is written clearly. Sorry about that.
Eric:
Yes. So at that point you essentially have all new assets associated with the outside of the collection in the correct. Yeah. On your wastewater. Thank you guys. Way to look. What we'll do is we'll do a slightly different presentation.
Keep the headers. So we might give you an Excel document. Nathan. The reference between that way we can maintain the integrity of the data. Right now you have just the prior year audit, current year budget rejections and proposed budget for 2027 right there. So we'll have a little bit more data available.
Or easily readable.
With that, I just really wanted to focus on the changing changes right now year over year. But there's any other questions? We'll take the now, obviously, but don't just write back those changes.
James:
They get asked why, if it was just a look into the modeling of whatever we're talking about taking the course, do that big project just to see what makes sense.
Jason:
Have any questions?
James:
You were on fire today. That's great.
Jason:
All right. I think we can close out this section. Been a lot of information. All right. We'll close that item two and we'll move to item three. Legal items Paul.
Use your quota.
Describer:
On screen. MEMORANDUM
TO: Castle Pines North Metropolitan District
FROM: Seter, Vander Wall & Mielke, P.C.; Paul Polito, Esq.
DATE: October 19, 2026
RE: Legal Status Report for the October 19, 2026 Study Session
MATTERS IN PROGRESS
MATTER: HIDDEN POINTE METRO DISTRICT – MILL LEVY EQUIVALENT
PAYMENT AGREEMENT
Status: The Inclusion Agreement with the Hidden Pointe Metropolitan District (HPMD) contemplates that, if the inclusion becomes effective before December 15, 2026, the District will certify its uniform mill levy for tax year 2026 (for collection in 2027) against property within the HPMD territory, and that the twenty-five percent (25%) surcharge on water and wastewater charges currently applied within that territory will cease upon inclusion. Under C.R.S. § 39-1-110(1.5), however, a special district may not levy a tax against newly included property for the year of inclusion unless the court order of inclusion is recorded before July 1 of that year. Because the inclusion election will not be held until November 3, 2026, that
deadline cannot be met, and the Douglas County Assessor has advised that the District’s mill levy will not apply to the HPMD territory until tax year 2027 (for collection in 2028). Absent a further agreement, the District would serve the HPMD territory during 2027 without the benefit of either the surcharge or property tax
revenue from that area.
To close this gap, counsel drafted a Mill Levy Equivalent Payment Agreement under which HPMD will pay the District, in lieu of the tax year 2026 levy, an amount equal to the District’s 2026 mill levy applied to the final 2026 assessed valuation of the HPMD territory, together with the apportioned specific ownership taxes attributable to that territory. At the District’s anticipated levy of 3.500 mills
and the preliminary 2026 assessed valuation reported by the Assessor, the payment would be approximately $62,900. HPMD will remit the payment monthly, within twenty days after it receives the underlying tax revenues, and may prepay all or any portion at any time from lawfully available funds. If a payment is not made when due, the Board may reinstate the surcharge following notice to the HPMD Board
and a five-day opportunity to cure. The Agreement terminates automatically if the inclusion is not approved at the election, and otherwise upon the District’s receipt of the full payment.
Counsel circulated the draft to HPMD’s board president, legal counsel, and management on September 22, 2026. HPMD’s counsel returned limited comments on October 5, 2026, clarifying the monthly payment timing and adding the notice and cure period described above, and HPMD’s management and the District’s financial consultant confirmed their approval of the draft. Counsel accepted those
revisions and circulated the final Agreement on October 6, 2026. The HPMD Board is scheduled to consider the Agreement at its October 20, 2026 meeting.
Action: None required at this meeting. The Agreement will be presented for the Board’s consideration and approval at its October 26, 2026 regular meeting, following HPMD’s approval.
Paul:
Buckle up because it's about to be another hour and a half. Now it was nothing. So so so we've got I'm going to have that mill levy put on payment agreement for you guys next Monday for Hidden Point. They have a meeting on the 20th, which is tomorrow. They'll be approving it. So bring to you for final approval. And assuming the election goes through and people vote for Hidden Point to be included within the district, it will take effect.
Okay. Right. And if they don't, then it's just everything. All of it just ceases to have any effect. The the inclusion agreement and the levy equivalent payment agreement, it's all dependent on the election passing in worst case all the time, I'm sure.
Turn on.
The within the same vein, the Hidden Point metro district inclusion election timeline is moving smoothly. People should be receiving their their questions, and we can put a little sticker on the back. After we talked with Jeff Huff, the president, over in Hidden Point, he said apparently people drop their ballots in at the county ballot box all the time, so there's even a little sticker.
Hopefully they don't do that. You let them know.
Jason:
Because this is a separate bill. This is not.
Paul:
That's right. This isn't part of the consolidated election. We purposefully did this as a mail about election. I did a soft spot for talking with Jeff. He was he was adamant that, you know, a lot of people tend to vote no down these consultative elections.
You just have said people just vote no. So by putting this on its own mail ballot, hopefully it gets them to look at it and hopefully read it, we''l see.
Jason:
They can probably get 50 votes back.
Paul:
Yeah, that would be a good number.
James:
What is the total. There's like 170 in hidden point there.
Nathan:
Well there was over a little over two.
Jason:
Oh there's 200.
Yeah like 20, 10%. Yeah.
Paul:
Yeah that's about right.
James:
I mean 30% are good year, right.
Paul:
Yeah. Yeah. Okay. Other than that, service plan amendment is moving smoothly with the county. I went to their planning commission meeting on October 5th. They, they were very happy with it. They approved it of county commissioners. They, one of the, planning commissioners even had a comment that this is what good governance looks like.
So that was nice to district got a little shout out there. I'm still waiting to hear back from the city as to the lease revisions, just haven't got anything back from them yet. And happy to report that Layne accepted all of the revisions within that addendum agreement that we were talking about. Yeah.
Jason:
So what does it go to Casper?
Paul:
Well, it also it'll go. Well, the board will execute it next Monday. And then we'll line up on who we want to select. Right.
Nathan:
So yeah, Emily's got a couple different programs ..... So it's not our representative. Yeah, yeah. So we'll select one of those and then it's just a matter of getting the scheduled.
Yeah I like her. She can present anytime. She's good.
Paul:
But she knows her stuff is fantastic. Yeah. She's been a huge help. So. Yeah. Happy to report that. Obviously, I let you know. You move along with with Layne. We'll we'll see what the root cause analysis tells us.
Nathan:
Not to step on your toes. And it's not an official response.
But I did talk to Marcus Graves and he is the parks and open space facilities director. He said that the city has looked at the lease and that they don't have any issues with the way that we presented it. So without comment.
Paul:
Okay. And that's, that's about it for the legal report. Does anybody have questions on the report before him? On to the minutes. I don't think so.
Paul:
So easy enough.
Jason:
Let's move on.
James:
Jana said no. (Laughter)
Jana:
My son is texting by seven and I'm typing yes.
Paul:
I will try to get you there. So your minutes start on page 24. That's the work session minutes. The regular meeting minutes are on page 28. If there's any questions, comments, concerns. Have you addressed them.
James:
I don’t think I went through them yet.
Paul:
Fair enough. Well, I'll be presenting them for approval next Monday. They'll be on the consent agenda, but you can always pull them off if you'd like. So, so we'll have another chance. Okay. Other than that, on the agenda, the mill levy payment agreement was there, but I just talked about it. The only change that Hidden Points Counsel had was a very small non substantive change regarding a cure provision for nonpayment.
They want to be able to have five days to cure any nonpayment. So I was happy to accept that. So I'll be presenting this agreement to you on Monday. I I've already gone through this in detail with you in the last meetings. I won't do it again unless anybody wants me to.
All right. And that is the end of the legal court.
Jason:
All right. Thank you, Paul. We will close out item number three, the legal items, and move to item number four adjourn the meeting. Thank you everyone.