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Castle Pines Metropolitan District Agenda Item 29b May 9,2014(Updated May 23,2014) Page 3 of 7 Background The District is located between Denver and Castle Rock in the unincorporated community of Castle Pines Village in Douglas County. The primary functions of the District are to provide street repair and maintenance, snow removal,road right-of-way maintenance, water treatment and distribution, sewer collection and storm drainage management services to the property owners of Castle Pines Village. The District's facilities include two water treatment plants, eight potable wells, one irrigation only well,two storage tanks, one potable water pump station, one irrigation/raw water pump station, and over 59 miles of pipeline. The District's service area is approximately 80%developed from a demand perspective, with a projected average annual demand of 1,634 AF at full build out. Annual produced water demands have averaged approximately 1,056 AF the last five years. The District's entire water supply comes from non-tributary groundwater, which is considered a non-renewable source. The District's Water Conservation Plan was approved by the CWCB in February 2010. Loan Feasibility Study Sue Mantz, District Accounting Supervisor, and Paul Dannels, District Manager, prepared the Loan Feasibility Study titled"CPMD Participation in the Chatfield Reservoir Reallocation Project," dated April 2014, with support from Gina Burke, Vice President, Jelin Water Consultants, and legal review from Scott Clark, Esq. with Burns Figa& Will. The study was prepared in accordance with CWCB guidelines and includes an alternative analysis, cost estimates, and financial statements. The feasibility study relies on the FR/EIS prepared by the Corps, and the Fish, Wildlife and Recreation Mitigation Plan(FWRMP)prepared by the Relocation Participants in accordance with C.R.S. 37- 60-122.2. Borrower—Castle Pines Metropolitan District The District was organized by a court order on June 14, 1973, following an election by the property owners in the District. The District serves Castle Pines Village which has approximately 4,500 residents and a total of 1,700 water taps. District funds are divided into its General Fund and Enterprise Fund. General Fund revenues are primarily derived from property taxes and the Enterprise Fund revenues are primarily derived from fees charged from services. A five-member Board of Directors governs the District and is empowered to levy a property tax on real and personal properties located within its boundaries. Through its water activity enterprise,the Board can authorize the District to incur debt and set water rates as required to cover operating expenses. Water Rights The District's water rights portfolio includes Denver Basin groundwater rights and Plum Creek and South Platte surface water rights. Currently, all water supplies come from non-tributary groundwater wells. Storage rights are held by the District in Plum Creek Reservoir(not yet constructed). In anticipation of the Project, the District, in conjunction with Castle Pines North Metropolitan District, obtained a 1,000 AF conditional storage right in Chatfield in Case No. 04CW308. CHATFIELD REALLOCATION DESCRIPTION THE GOAL OF THE REALLOCATION IS TO HELP ENABLE WATER PROVIDERS SUPPLY WATER TO LOCAL USERS IN RESPONSE TO RAPIDLY INCREASING DEMAND.THE STATEWIDE WATER SUPPLY INITIATIVE 2010 REPORT(SWSI 2010)HAS IDENTIFIED THE PROJECTED GAP IN MUNICIPAL&INDUSTRIAL(M&I) AND SELF-SUPPLIED INDUSTRIAL(SSI)USE IN THE METRO BASIN ALONE WILL BE BETWEEN 180,000 AND 280,000 AF PER YEAR BY THE YEAR 2050. THE CHATFIELD REALLOCATION PROJECT IS IDENTIFIED IN SWSI 2010 AS AN IDENTIFIED PROJECT AND PROCESS(IPP)FOR THE METRO AND