PROJECT INFORMATION | July 6, 2017

The Town’s Mission is Quality of Life

Reliable infrastructure is the foundation for a strong economy, and maintaining high quality of life for residents in Eagle. Therefore, it is important that the Town invest in maintaining its infrastructure, especially the water system.

Background

Currently, the Town of Eagle has a single water treatment plant located on Brush Creek. Peak water usage occurs in the summer months when outdoor watering greatly increases water demand. This outdoor water use has a positive impact on the look and feel of both residential homes and the community at large.   

Why Do We Need a New Water Plant?

A single water treatment plant does not provide for system redundancy, which means that service reliability is at risk in the event of Brush Creek blockages or contamination. With respect to capacity, future residential and commercial growth will increase demand. The growth rate over the next 20 years is estimated at 3.4%. Peak water demands in the summer already approach the maximum capacity of the plant, even with 90% of customers complying with odd-even day watering restrictions.

The Proposal

Building a new water treatment plant has been on the Town’s radar screen since it began investigating the need for a new plant in 2007. The Town completed the design of the plant in 2012. Given the economic recovery, current and projected demands for water, and the need for water-service redundancy, the Town believes the time is right to move forward with building a new plant. The proposed location is east of the existing Wastewater Treatment Plant at the confluence of Brush Creek and the Eagle River. In Phase 1, the new plant will produce 2.5 million gallons per day of high-quality potable water, providing redundancy and the capacity to serve the Town over the next 20-year period.

Benefits of Moving Forward with the New Plant

• Creates redundancy in water supply and water service that will protect the Town in case of a natural disaster such as a forest fire, landslide, or mining incident in the watershed above the current water plant by allowing the Town quick access to the flow of the Eagle River.
• Increases treatment capacity and allows the Town to utilize new legal and physical water rights.
• Creates environmental benefits by increasing the flows in the upper Brush Creek.
• Ultimately provides highly reliable water service, environmental benefits, and allows the Town to pursue its vision for smart economic development and growth.

The Costs and Financing of the Plant

The estimated cost of constructing the new plant is approximately $23 million. The Town is working with its consulting firm and other experts to finalize the cost of the plant and minimize costs to the consumer.  Since 2011, the Town has been collecting prepayment of water tap fees at the approval of new development projects. This pre-payment structure, plus past increases in water rates, has built up a reserve of $5 million toward the cost of funding a new water plant. The remaining cost will be financed with a Colorado State Revolving Fund (SRF) Loan. The State administers these low-interest loans to fund the construction of new water and pollution-control infrastructure.

Proposed Surcharge

To repay the principal and interest on the SRF loan, the Town is proposing a monthly surcharge that will be applied to each water bill. This surcharge is estimated at approximately $30. The final amount of the surcharge is anticipated to be be known in Fall 2017 and will be based on the final design and construction costs of the plant and additional analysis of cost sharing.

Project Timing and Outreach Activities 

Public outreach and informational meetings on the new water plant will be held with community leaders, the development community, and community at large. This outreach will start this summer and extend into the fall. Updates on the construction costs and the proposed surcharge will be shared during this outreach process. The final decision by Eagle’s Trustees on the plant funding and surcharge will occur in January 2018. Construction will begin in the spring of 2018. The plant will be built in phases, with Phase 1 complete in 2020.

The Costs of Delay

Delaying construction of the new plant means that Eagle residents will continue to be subject to the reliability risks of a single water treatment plant, and the Town will not be able to execute its vision and plans for smart growth. Furthermore, plant construction costs are projected to be higher in the future.

Independent of proposing a new water plant, the Town is recommending an increase in water Tap Fees.

Proposed Increase in Tap Fees

The Town ensures that it has the financial resources to make investments in water system infrastructure by imposing water Tap Fees on new customers. These fees offset the cost of the Town’s common infrastructure that all customers rely on for water service. Tap Fees also cover a new customer’s permanent reservation of water plant capacity and right to use water from the water system.

The current Tap Fee is $7,000 per Equivalent Residential Unit (EQR). An EQR is based on the water demand for a single-family residential unit. The current level of these fees does not cover the replacement cost of the Town’s existing common water infrastructure. The proposed new Tap Fee is $12,265 per EQR, which is calculated based on the replacement cost of the infrastructure in 2017 dollars ($61.28 M), and assuming 5,000 equivalent single-family home connections at build out. The Tap Fee will be increased each year based on inflation. Note: The $61.28 M does not include the cost of the new water treatment plant, which will be funded with the SRF loan and proposed monthly surcharge.

New Tap Fee Ordinance – Vote on August 8^th 

The Board of Trustees will review and discuss the staff proposal to increase the current water tap fees to $12,265 per EQR on July 25^th.  The public is invited to attend this meeting and provide comment.  The vote on an Ordinance to increase the Tap Fee is planned for the August 8^th meeting.

For more information regarding the Lower Water Basin Treatment Plant, or the proposed increase in Tap Fees, please contact Jenny Rakow at 970-328- 6354 or jenny.rakow@townofeagle.org.