ACWWA Flow Frequently Asked Questions

Q: What is the ACWWA Flow Project?

A: It’s a new water supply project to better serve the Arapahoe Water and Wastewater Authority (ACWWA) service area. Upon completion in 2012, it will result in an annual average delivery of 4,400 acre-feet of water (1 acre-foot generally serves 2 households annually) to the ACWWA service area to supplement current water supplies. This will provide a secure and high quality water source for current and future ACWWA customers. The components of the project are:

• Renewable water rights from the South Platte River Basin
• Regulatory water storage
• Easements, alluvial wells and storage and delivery infrastructure to deliver water rights to the East Cherry Creek Valley (ECCV) Water Treatment Plant (to be constructed near Barr Lake)
• Water Treatment capacity in the ECCV Water Treatment Plant
• Additional capacity in the existing ECCV Northern Pipeline, a 48” pipeline that travels from the Barr Lake area South to the ECCV Service Area
• Water storage reservoir to be constructed at E-470 and Chambers Road
• Interconnect line to deliver water supplies from the ECCV service area to ACWWA’s service area

Q: Why does ACWWA need additional water?

A: ACWWA’s current supply primarily consists of deep groundwater wells and shallow alluvial wells along Cherry Creek River. There are two major components as to why ACWWA needs additional water supply.

1. The reduction of our existing supplies, as has been widely reported on the Front Range. Groundwater levels have been diminishing due to the mining of groundwater (pumping the groundwater faster than it is recharging). ACWWA is seeing evidence of this. Due to this issue, our current supplies may not be adequate to supply current demands over time.
2. While ACWWA has long been developing various water supplies, including renewable water rights, due to the limitations of our physical location we cannot simply find all the water supplies we need within our service area; hence the reason for looking beyond our borders for additional water supplies.

Q: What is renewable water?

A: Renewable water is a source that is continuously renewed within reasonable time spans by the hydrological cycle. An example of this would be annual snowmelt from the mountains or rainfall that feeds into the Colorado rivers, which feed irrigation ditches where our water rights are located. Groundwater connected to surface water sources could be considered renewable if it is replenished as described above. However, the Denver Basin Aquifers can be several thousand feet below ground surface where hydrologic activity does not replenish these aquifers (for practical purposes).

Q: Where is the water coming from?

A: The water rights are located in irrigation ditches within the South Platte River Basin. This water will be delivered to the Beebe Draw by pipeline or exchange on the South Platte River. It will be stored in the Beebe Draw until it is pumped out and delivered to the ECCV Water Treatment Plant for treatment and delivery to ACWWA.

Q: What is the Beebe Draw?

A: The Beebe Draw is a shallow underground aquifer system once a historic stream channel of the South Platte River. It is an ideal location to store water because of its geology - filled with sand and gravel.

Q: How much will this project cost?

A: The overall project costs are approximately $153 million, which include:

• 4,400 acre-feet of water rights and associated retiming/storage/delivery facilities - $94 M
• Capacity in the ECCV Water Treatment Plant - $ 10 M
• Capacity in the ECCV Northern Pipeline and Pump stations - $ 9 M
• Storage Reservoir and outlet structures by Chambers Road and E-470 - $16M
• Easements in Well Fields, alluvial storage and delivery pipeline - $19M
• 500 acre-feet of Northern Storage - $2M
• Interconnect Line from ECCV Northern Line to ACWWA service area - $ 2.5M

Q: How will it be paid for?

A: There are three distinct mechanisms being used to fund this project.

1. ACWWA Bonds – ACWWA sold $96 million in bonds in 2009, in two series:
   1. Taxable water and wastewater revenue bonds (Build America Bonds)
   2. Tax exempt water and wastewater revenue bonds
   The bonds will be paid back over 30 years. A Water System Investment Fee of $26.50 per ¾” tap has been allocated to ACWWA customers to assist in the financing of this project.
2. ACWWPID Bonds – The ACWWPID is a Public Improvement District funded by property tax revenue in Arapahoe County. A $53 million bond was sold in 2009 using the two types of bonds:
   1. Taxable GO Direct Pay Build America Bonds
   2. Tax Exempt GO Bonds
3. Existing Funds from ACWWA – initially about $10 million in capital reserves will be used to fund aspects of this project.

Q: Who are the parties involved in the transaction?

A: This is a regional project that involves ACWWA working with East Cherry Creek Valley Water and Sanitation District (ECCV) and United Water and Sanitation District (United) to develop and operate the components of the project.

Q: What is East Cherry Creek Valley Water and Sanitation District (ECCV) and why are we working with it on this project?

A: ECCV is a neighboring water District that serves a portion of the City of Centennial and unincorporated Arapahoe County. It is located north and east of the ACWWA service area. In 2004, ECCV built a large pipeline from the Barr Lake area to its service area. At that time ACWWA saw the benefit of buying capacity in this pipeline and did purchase some capacity for future use. ACWWA strongly believes in the benefits of regional projects. Some partnerships already in place include the Joint Water Purification Plant (JWPP), a partnership between ACWWA and Cottonwood Water and Sanitation District, and the Lone Tree Creek Reuse Facility, a partnership between ACWWA and the Inverness Water and Sanitation District. For the ACWWA Flow Project, joining forces with ECCV and United allows large projects to be built that benefit all three entities for much less cost than any one entity building them on their own.

Q: What is United Water and Sanitation District (United) and why are we working with it on this project?

A: United is a Colorado Special District in Elbert County. Its role in this transaction will be to acquire the water rights to be transferred to ACWWA, build the necessary infrastructure to deliver the water to the ECCV Water Treatment Plant and to also build a storage facility near Chambers Road and E-470. United has developed extensive relationships with entities such as ECCV and bring a lot of experience to the project.

Q: Aren’t we already building our own Water Treatment Plant? Why are we buying into another one?

A: Yes, we will complete construction of the Joint Water Purification Plant (JWPP) in the spring of 2010. ACWWA is partnering with Cottonwood Water and Sanitation on this project, which will greatly enhance ACWWA’s ability to provide high quality water to our customers. By “buying into” another water treatment plant, ACWWA enhances the flexibility of its system, which ultimately translates into efficiencies by having a choice on how to best manage its sources and system. ACWWA is only buying a portion of its water treatment needs in the ECCV Water Treatment Plant. It will supplement the rest of the Authority’s needs with JWPP’s operations.

Q: This is such a big deal, why haven’t I heard about it earlier?

A: You are right, this is a big deal. It essentially puts the necessary pieces in place to provide a high-quality reliable water supply to meet ACWWA’s current and future water needs. Although ACWWA has been pursuing renewable water for many years, this project in its current form was only seriously developed in 2009. After it was determined that the project worked conceptually, then the hard part started – working out the details. This was a highly complex and time intensive process.

Q: I’ve read articles about the reducing groundwater levels, how does that effect ACWWA?

A: Groundwater levels have been decreasing in the South Metro area for many years. ACWWA has experienced these same issues with the Denver Basin Aquifer wells, our current water resource. For this reason, ACWWA has developed strategies to find alternative water resources since eventually our Denver Basin Aquifer wells will become too costly to use, as the water levels decline.

Q: I don’t like the taste of my water right now, will this project make it better?

A: ACWWA is well aware that some of our customers are not satisfied with the taste and/or hardness levels of our current water supply. Although such issues were not the sole reason for building the Joint Water Purification Plant (JWPP), a new reverse osmosis water plant being built on Jordan Road, the treatment of that water will result in better tasting, less hard water for indoor household use. The water supply and treatment in the ACWWA Water Flow Project will have water quality very similar to that of the JWPP through reverse osmosis technology at ECCV’s Water Treatment Plant.

Q: Would we need this project if the ACWWA service area stopped growing?

A: Yes, as explained previously, the groundwater wells in which ACWWA currently relies on for much of its water supply are a diminishing, non-renewable water source. If not even a single new user was brought into the ACWWA service area, existing customers would still need to address this issue.

Q: Will other water districts benefit from this project?

A: The ACWWA Flow Project was developed to meet ACWWA’s current and future water demands, however by partnering with ECCV and United, all three parties have benefited in this transaction. ACWWA is also part of several regional water organizations and will continue to participate with these organizations.

Q: If renewable water is so important, why didn’t ACWWA acquire some before?

A: ACWWA has been acquiring renewable water rights for many years. Most of these renewable water rights are on Cherry Creek and its tributaries. To acquire additional renewable water rights ACWWA had to look beyond its service area. In doing so, other issues and costs are associated with such water rights, including delivery, storage and even treatment can be necessary. It was to ACWWA’s advantage to wait until other entities were ready to partner on such facilities such as ECCV and United, which allowed ACWWA to take advantage of economies of scale.

Q: Will the project only serve new development?

A: No, the renewable water derived from this project will serve the demand from existing customers as well.

Q: Does the additional water from this project mean an end to watering restrictions at ACWWA?

A: Although the additional water rights acquired in this project will secure a long term reliable water supply, it does not change the fact that we live in a semi-arid climate where severe droughts like what was seen in 2002 can happen. Water supply availability and sometimes operational issues can require watering restrictions. ACWWA’s water supply will still be managed as efficiently as possible in order to keep costs down. As this project and others develop, and climactic conditions are assessed, ACWWA will evaluate the issues and make determinations as necessary.

Q: When will the ACWWA Flow Project be completed?

A: With many of the project components in progress, the construction of the major elements of the project are anticipated to be completed by 2012 with the ability to start piping in water to the service area. Additionally, full utilization of all the water supply provided by this project will not be needed by ACWWA for many years, and ACWWA will phase the remaining components of the project to meet future demands as needed.

Q: How will this project impact my property value?

A: Obviously ACWWA doesn’t have direct control over property values in the area, however, with increased discussion in the legislature regarding how a secure water supply or lack thereof can impact property values, ACWWA’s ability to secure a water supply for its customers will likely reflect positively on property values.

Q: Will this project help us get through a drought?

A: Yes, the project increases the diversification of ACWWA’s water portfolio. ACWWA will have water rights in middle and lower South Platte River area, Cherry Creek, groundwater and multiple storage reservoirs. Since the severity of drought conditions generally vary by river basins in Colorado, having a diverse portfolio will give us the best opportunity to weather drought conditions.

Q: How will this affect ACWWA’s rates and fees?

A: Starting January 1, 2010 your water bills will reflect a Water System Investment Fee of $26.50 per month per tap equivalent. Rates will remain the same. The use of a water fee is common practice among water districts across Colorado to retire project costs. There may be periodic rate and fee adjustments in the future, however, by securing a renewable water source now, ACWWA customers will not be exposed to the potential higher prices for renewable water acquisition in the future.

Q: Will the investment fee go away after 30 years? Will it go up over time?

A: The Water System Investment Fee is not anticipated to increase in the future, and will be removed when the bonds that were purchased to finance the project are paid off in 30 years.