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Town of Firestone Agenda Item 14a November 16-17, 2016 Board Meeting (Updated November 17, 2016) Page 2 of 5 Background The Town of Firestone's municipal boundary encompasses approximately 14.2 square miles and has a planning area of approximately 26 square miles. The Town is generally located east of Interstate 25 between Highway 66 and Highway 52, north of the Denver Metro area, with a smaller municipal area situated on the west side of 1-25. The Town operates a water distribution network of approximately 58.5 miles of pipeline and associated facilities to provide services to approximately 12,000 residents. Currently, the Town's sole source for potable water is derived from its C-BT Project shares, which are transferred annually to the Central Weld County Water District (CWCWD) through the Northern Colorado Water Conservancy District (Northern). The amount transferred is equal to 120% of the Town's water usage in the previous year plus additional water to meet anticipated growth in the coming year. CWCWD treats the water for potable use and delivery to the Town's infrastructure via 11 points of connection, each consisting of a master meter vault and SCADA appurtenances. The Town uses this water to supply both potable and non-potable irrigation needs. To meet the needs of its member entities, and to prevent speculative water purchases, Northern has set limits on the amount of C-BT water each entity can own in relation to its water demand. Since the Town owns sufficient C-BT shares to meet demand, its allowable C-BT ownership, based upon demand associated with its committed taps, has been exceeded. Because of this fact, the Town is "capped" and cannot purchase additional C-BT supplies through the open market. Accordingly, the Town must rely on additional C-BT acquisition through dedication from developers annexing into the Town. This Northern requirement requires the Town to seek out other sources of domestic supply, since it cannot purchase additional C-BT water to meet its needs. Current C-BT supplies are sufficient to meet the Town's water demands, and to-date, there have not been any potable supply shortages. However, it should be noted that the C-BT system was originally designed as a supplemental supply to native water rights. Each year, the amount of water delivered by the C-BT system is set, based on demand, and an adequate supply is not guaranteed. Due to high demand and high cost of C-BT water in the area, development in the Town has slowed and water costs have increased. The Town seeks to secure a non-potable water supply to be used for the irrigation of parks, rights-of-way, and other areas, thus freeing up the Town's C-BT supplies for existing potable needs and diversifying the Town's water rights portfolio. Loan Feasibility Study Steve Nguyen, P.E. of Clear Water Solutions prepared the Loan Feasibility Study titled "CWCB Feasibility Study for The Town of Firestone Carbon Valley Resource Pit", dated October 2016. Audited financial statements were prepared by Anton Collins Mitchell LLP. The feasibility study, prepared in accordance with CWCB guidelines, includes an analysis of alternatives, preliminary engineering design, and construction cost estimates. Borrower - Town of Firestone The Town is a statutory town in Weld County, which was incorporated in 1908. The Town operates a separate Water Department as a Water Activity Enterprise, which invoices residents and businesses for water service. The Town adopted a Water Conservation Plan in June of 2007, followed by a formal update in 2015, which is currently in compliance with CWCB requirements.