July 27, 2006 ECCV H2’06

ECCV H2’06 PIPELINE AND RENEWABLE WATER SUPPLY ONLINE, ON TIME    

July 27, 2006

Colorado’s first such collaborative project brings renewable water to South Metro area

Arapahoe County, CO — The East Cherry Creek Valley Water and Sanitation District (ECCV) Board of Directors today marked the completion of the first phase of a major water project that now brings a long-term supply of renewable water to the District’s nearly 50,000 customers.

The Northern Project, publicly identified as “H2’06”, delivers surface water from the South Platte River that will supplement ECCV’s aquifer resources and reduce the District’s dependency on non-renewable groundwater. Now complete, Phase I of the project included the acquisition of water rights and the construction of a 31-mile underground pipeline, storage tanks and two pumping stations to carry water from the Beebe Draw near Barr Lake to ECCV’s tanks, which are located near Smoky Hill Road and E-470. Officially announced in December 2003, the multi-phase project also will include the purchase of additional water rights and a future water-treatment facility.

“ECCV is proud to tell our customers that their renewable water has arrived,” said E. Peter Elzi, Jr., ECCV Board Chairman.
In addition to serving ECCV’s customers, members of the South Metro Water Supply Authority (SMWSA) partnered in the project by paying the costs to build a larger-than-planned pipeline with capacity to move water to their communities. This collaborative effort enables participating districts to purchase their own water rights and use ECCV’s waterline to bring the resources to their customers. SMWSA members buying pipeline capacity in the pipeline include Arapahoe County Water and Wastewater Authority, the Town of Castle Rock, Centennial Water and Sanitation District, Cottonwood Water and Sanitation District, Inverness Water & Sanitation District, and Stonegate Village Metropolitan District.

“This is a partnership that benefits all of the participants by providing opportunities for future water planning,” said Ray Waterman, SMWSA Chairman. “Sharing the costs of this waterline during a time of rapidly rising material and energy costs was the right move at the right time for us all.”

ECCV’s H2’06 project involved the purchase of South Platte River water rights in a three-way arrangement between ECCV, Farmers Reservoir and Irrigation Company (FRICO) and the United Water and Sanitation District (United). In Phase II of the project, ECCV paid $45 million for 3,000 acre-feet per year of surface water rights from United, another Colorado Special District. The renewable water is now diverted from the South Platte River near the Adams-Weld County border and exchanged through the FRICO system into the Beebe Draw, a shallow natural aquifer system near Barr Lake. Under the agreement, United provides wells in the Beebe Draw and the basic infrastructure to bring ECCV’s water to its H2’06 pipeline.

ECCV recently completed construction on two booster pump stations and the new 48-inch-diameter pipeline that sends the water southward to the District’s storage tanks. When future phases are complete, the pipeline is expected to carry up to 40 million gallons of water per day for the District’s customers. Northwest Pipe manufactured the pipeline for this project, and ECCV secured its costs at 2005 prices. ERS, a pipeline division of TIC based in Steamboat Springs, Colo., was the contractor for the H2’06 pipeline, and Garney Construction, the contractor for the booster pump stations. Camp Dresser McKee served as the design consultant and provided construction management services for the pipeline and pump stations.

The Phase II water rights portion of the project involves the purchase of an additional 3,000 acre-feet of water from the shareholders of mutual ditch company FRICO, who unanimously approved this type of plan in 2002. “Cooperating with ECCV and United was a win-win for FRICO shareholders and ECCV customers,” said FRICO General Manager Manuel Montoya.

Overall, ECCV spent approximately $150 million for the water rights and Phase I construction. ECCV is using a variety of means to finance the H2’06 project. In 2003, the District paid about half of the initial water rights costs ($18.5 million) through the sale of enterprise revenue bonds. The remaining cost of the water rights and a portion of the infrastructure costs are funded by increased tap fees, which are paid by homebuilders on a per house basis to connect to ECCV’s system. Currently, ECCV’s water tap fee is $17,750 and the amount is anticipated to increase up to $1,250 each year until the District is fully developed. In addition, ECCV customers pay a $22 monthly fee into the Northern Project Construction Fund (NPCF) to finance the new infrastructure. The fee will remain in effect until the 30-year bonds are completely paid.

“Securing renewable water has been of paramount importance to ECCV for years, as the District has relied on wells tapping finite water supplies in underground aquifers for the past 40 years,” said David Kaunisto, ECCV District Manager. “Groundwater supplies will be more expensive in the future, as additional wells become necessary to provide the same amount of water flow.”

Partnership has been a cornerstone in ECCV’s operations, and today the District also plans to award a contract for the construction of an interconnection from the H2’06 line to Denver Water’s system at Denver International Airport (DIA). The selected contractor will build the four-mile interconnect, which is expected to be completed by the end of the year. The connection will enable ECCV to bring permanently leased water from Denver to its customers, further adding to ECCV’s renewable supplies. In addition, the link allows DIA to resolve a troublesome water-circulation issue that had forced the release of water from Denver Water’s system to maintain compliance with potable water standards.

About East Cherry Creek Water & Sanitation District:
The East Cherry Creek Valley Water and Sanitation District serves approximately 50,000 people in the eastern portions of the City of Centennial and unincorporated Arapahoe County. ECCV is a Colorado Special District governed by Colorado Revised Statute Title 32. As such, the Board of Directors is elected by the registered voters of the District. For the most up-to-date information on the District and the H2’06 water project, please visit ECCV’s Web site at www.eccv.org.