Stonegate Village Metropolitan District

(“SVMD”)

Community Meeting

Options Going Forward

July 27, 2011

Tonight’s Presentation• Purpose

– Describe the Inclusion Process– Present the Proposed Ballot Question– Review the Board’s Study Information– Discuss the 2 Options and the pros/cons of

each– Inform you of the facts as best we know them

• So that you have the information to make an informed decision

Rules of Participation

• Civility and respect for all participating

• Commitment to the meeting purposes

• Interruptions not permitted except by facilitator

• Questions will be written on index card provided to facilitator during presentation

• Questions will be answered following the presentation

What’s Next?• July 27, 2011 -- Community Meeting • August 1, 2011 -- Community Advisory Group applications due and

members notified.– Thursday August 4th, 6-9 pm,– Tuesday August 9th, 6-9 pm,– Thursday August 11th, 6-9 pm,– Tuesday August 16th, 6-9 pm,– Tuesday August 23 community meeting

• August 11, 2011 – PWSD Public Hearing and Consideration• August 23, 2011 -- Present Findings at Community Meeting• TBD – SVMD Special Meeting for possible action• September 2, 2011 -- Last date to certify a ballot question for a

November election

Ballot question for SVMD Service Area currently under consideration:

“Should SVMD include in Parker Water”

• IF YES:– Parker Water serves entire SVMD Service Area

• IF NO:– SVMD continues water/wastewater service to entire

SVMD Service Area (SVMD, LPMD, Compark & Dove Ridge)

Actions to date by SVMD Board• Resolution to proceed to a vote on inclusion

– Passed 5 - 0 (February 16)

• Resolution to support affirmative vote on inclusion– Failed 3 - 2 (June 15)

• Board Member proposal to Cease Negotiations with Parker Water (“PWSD”) - Tabled to August Meeting

• Board Member proposal to reconsider support of affirmative vote on inclusion- Tabled to August Meeting

What is SVMD?

• C.R.S. Title 32 Special District• Formed on July 20, 1983• Provides water, wastewater and parks and

recreation services• Funded through fees and property taxes

(mill levy)• Board of Directors (5 person board of

property owners)• Managed by Contract (Mulhern MRE, Inc.)

SVMD Service Area

• SVMD Boundaries

• Outside Service Contracts

- Compark Business Campus Metro District

- E-470 Potomac (Dove Ridge)

- Lincoln Park Metro District

Water Supply

• Deep Ground Water (non-renewing)

• Reuse of Treated Wastewater Effluent

Water Treatment and Distribution

• Deep Groundwater Wells

• Water Treatment Plant

• Storage Tanks

• Potable Distribution System

Wastewater Collection and Treatment

• Wastewater Collection System

• Wastewater Treatment Plant

• Treated Effluent Storage

• Non-potable Water Distribution

Parks and Recreation

• Greenbelts and Parks– Maintenance– Improvements

• Pool– Operations & Maintenance– Improvements

• Community Center– Scheduling– Upkeep– Improvements

Major Issues

1. Renewable Water Supply

2. Wastewater Treatment Plant

3. Cost of Service

Issue 1- Water Supply

• South Metro Water Supply Study (2003)“Deep Groundwater Likely Not Viable as long term

supply”

• Those relying on Ground Water should:– Conserve use of existing supplies– Reuse to the extent feasible– Develop local renewable supplies– Participate in the import of renewable water

Why do we need Renewable Water?

Ground Water Pumping – Early SVMD Development

600

ft3 0

0 ft

regional head

Ground Water Pumping – Today’s Conditions

50 f

t3 0

0 ft

regional head

SVMD Renewable Water Actions

• Participated with 15 others South Metro in the SMWSA– Pursued possible water import projects

• Established water conservation plan

• Reduced common area watering

• Initiated Renewable Water Fund

• Purchased storage in Rueter Hess

• This fall consideration of purchase of initial component of renewable water (

Issue 2 - Wastewater Treatment

• Treatment Plant constructed in 1984, expansions (1994 and 2001)

• Treatment Violations occurred in 2007 – 08

• Study Indicates need for an Extensive Upgrade

• Upgrades need to be soon (costly)

Issue 3 – Cost of Service

• South Metro Water Rates high in general (SVMD included)

• Current Mill Levy substantial

(SVMD: 27.4, LPMD: 50, Compark: 45.4, Dove Ridge: 47.7)

• Customers express rate concerns

• Increases coming (rates & mills)

District Board Investigates

• How to approach future most efficiently and cost effectively

• What are the available options for:– Water Supply– Wastewater Treatment– Financing

Two Primary Options

• Continue as SVMD

• Include in Parker Water and Sanitation District (PWSD)

Continue as SVMD

• Purchase initial increment of renewable water import through WISE (Aurora and Denver Water)

• Fund additional water delivery infrastructure

• Pursue additional renewable water over time

• Fund/construct wastewater treatment upgrades

• Finance through reserves, rates and mill levy

Include in Parker Water and Sanitation District

• SVMD gains a share of existing PWSD renewable water

• PWSD participates in further renewable water import (includes water for SVMD)

• SVMD gains a share in existing PWSD wastewater treatment facilities

• PWSD increases wastewater capacity with growth (includes SVMD)

• PWSD finances future improvements (with rates and mills from all customers)

SVMD Board Studies Options• Costs and Benefits of a Proposed

Regionalized Water and Wastewater Utility (by StepWise Utility Advisors)

• Forecasted Statement of Sources and Uses of Cash (by Simmons & Wheeler, P.C. Certified Public Accountants)

• Stonegate Village Metropolitan District Inclusion Analysis Peer Review

(by SAIC Energy, Environmental & Infrastructure, LLC)

Study Limitations

• Best Current Assumptions for the Future

• Financial Information provided by the Districts

• Property Tax Valuations today

• Assumes inflation factor

• Uses existing capital plans, master plans

Bill Comparison

YEAR SVMD Alone PWSD Alone Consolidated Cost Difference2011 $41.27 $33.12 - -2012 $44.57 $36.37 $33.12 -25.69%2015 $56.15 $44.71 $35.18 -37.35%2020 $82.50 $52.70 $40.91 -50.41%

Water Bill Alone Based on Winter AverageBased on 3,000 gallons usage per month

Bill Comparison

YEAR SVMD Alone PWSD Alone Consolidated Cost Difference2011 $44.49 $37.76 - -2012 $48.05 $41.46 $37.76 -21.42%2015 $60.52 $50.97 $40.11 -33.72%2020 $88.93 $60.06 $46.64 -47.55%

Water Bill Alone Based on Winter AverageBased on 5,000 gallons usage per month

Bill Comparison

YEAR SVMD Alone PWSD Alone Consolidated Cost Difference2011 $52.00 $44.72 - -2012 $56.16 $49.10 $44.72 -20.37%2015 $70.74 $60.37 $47.50 -32.85%2020 $103.94 $71.14 $55.22 -46.87%

Water Bill Alone Based on Winter AverageBased on 8,000 gallons usage per month

Bill Comparison

YEAR SVMD Alone PWSD Alone Consolidated Cost Difference2011 $85.25 $75.61 - -2012 $92.07 $83.02 $75.61 -17.88%2015 $115.99 $102.08 $80.32 -30.75%

Water Bill Alone for the Summer MonthsBased on 17,000 gallons usage per month

Bill Comparison

YEAR SVMD Alone PWSD Alone Consolidated Cost Difference2011 $26.03 $32.62 - -2012 $32.88 $32.62 $32.62 -0.79%2015 $53.23 $32.62 $32.62 -38.72%2020 $62.58 $32.62 $32.62 -47.87%

Sewer Bill Alone Based on Winter AverageBased on 3,000 gallons usage per month

Bill Comparison

YEAR SVMD Alone PWSD Alone Consolidated Cost Difference2011 $29.09 $48.62 - -2012 $36.75 $48.62 $48.62 32.30%2015 $59.49 $48.62 $48.62 -18.27%2020 $69.94 $48.62 $48.62 -30.48%

Sewer Bill Alone Based on Winter AverageBased on 5,000 gallons usage per month

Bill Comparison

YEAR SVMD Alone PWSD Alone Consolidated Cost Difference2011 $33.68 $72.62 - -2012 $42.55 $72.62 $72.62 70.67%2015 $68.87 $72.62 $72.62 5.45%2020 $80.99 $72.62 $72.62 -10.33%

Sewer Bill Alone Based on Winter AverageBased on 8,000 gallons usage per month

Bill Comparison

YEAR SVMD Alone PWSD Alone Consolidated Cost Difference2011 $67.30 $65.74 - -2012 $77.45 $68.99 $65.74 -15.12%2015 $109.38 $77.33 $67.80 -38.01%2020 $145.08 $85.32 $73.53 -49.32%

Combined Water & Sewer Bill for the Winter MonthsBased on 3,000 gallons usage per month

Bill Comparison

YEAR SVMD Alone PWSD Alone Consolidated Cost Difference2011 $73.58 $86.38 - -2012 $84.80 $90.08 $86.38 1.86%2015 $120.01 $99.59 $88.73 -26.06%2020 $158.87 $108.68 $95.26 -40.04%

Combined Water & Sewer Bill for the Winter MonthsBased on 5,000 gallons usage per month

Bill Comparison

YEAR SVMD Alone PWSD Alone Consolidated Cost Difference

2011 $85.68 $117.34 - -2012 $98.71 $121.72 $117.34 18.87%2015 $139.61 $132.99 $120.12 -13.96%2020 $184.93 $143.76 $127.84 -30.87%

Combined Water & Sewer Bill for the Winter MonthsBased on 8,000 gallons usage per month

Bill Comparison

YEAR SVMD Alone PWSD Alone Consolidated Cost Difference2011 $111.28 $108.23 - -2012 $124.95 $115.64 $108.23 -13.38%2015 $169.22 $134.70 $112.94 -33.26%2020 $233.00 $152.93 $126.02 -45.91%

Combined Water & Sewer Bill for the Summer MonthsBased on 3,000 gallons usage with 17,000 gallons of water use per month

Bill Comparison

YEAR SVMD Alone PWSD Alone Consolidated Cost Difference2011 $145.43 $152.13 - -2012 $162.40 $162.27 $152.13 -6.32%2015 $217.77 $188.36 $158.57 -27.18%2020 $302.51 $213.30 $176.48 -41.66%

Combined Water & Sewer Bill for the Summer MonthsBased on 5,000 gallons usage with 23,000 gallons of water use per month

Property Tax Comparison

Year 2011 2012 2015 2020

Stonegate Village 27.402 31.402 31.402 31.402

For Residents of Stonegate Village Metropolitan District

Projected Mill Levies

Stand Alone

Year 2011 2012 2015 2020

Stonegate Village - 17.602 17.602 17.602

Parker Water & San - 11.200 10.700 10.000

Total - 28.802 28.302 27.602

Mill Levy increase - decrease - 2.600 3.100 3.800

Included with Parker Water & Sanitation

Projected Mill Levies

Property Tax Comparison

Year 2011 2012 2015 2020

Stonegate Village $756 $875 $901 $947

Property Taxes Paid

For Residents of Stonegate Village Metropolitan District

Stand Alone

Year 2011 2012 2015 2020

Stonegate Village - $490 $505 $531

Parker Water & San - $312 $307 $302

Total - $802 $812 $833

Property Tax increase - decrease - $73 $89 $114

Property Taxes Paid

Included with Parker Water & Sanitation

Property Tax Comparison

Year 2011 2012 2015 2020

Lincoln Park $1,379 $1,393 $1,435 $1,508

Stand Alone

Property Taxes PaidFor Residents of Lincoln Park Metropolitan District

Year 2011 2012 2015 2020

Lincoln Park - $1,393 $1,435 $1,508

Parker Water & San - $312 $307 $302

Total - $1,705 $1,742 $1,810

Property Tax increase - decrease - $312 $307 $302

Property Taxes Paid

Included with Parker Water & Sanitation

Property Tax Comparison

Year 2011 2012 2015 2020

E470 Potomac $1,262 $1,274 $1,313 $1,380

Property Taxes PaidFor Residents of E470 Potomac Metropolitan District

Stand Alone

Year 2011 2012 2015 2020

E470 Potomac - $1,274 $1,313 $1,380

Parker Water & San - $312 $307 $302

Total - $1,586 $1,620 $1,681

Property Tax increase - decrease - $312 $307 $302

Property Taxes Paid

Included with Parker Water & Sanitation

Property Tax Comparison

Year 2011 2012 2015 2020

Compark 2,443 2,467 2,542 2,672

Property Taxes PaidProperty Owners in Compark Business Campus MD

Stand Alone

Year 2011 2012 2015 2020

Compark - $2,467 $2,542 $2,672

Parker Water & San - $609 $599 $589

Total - $3,076 $3,142 $3,261

Property Tax increase - decrease - $609 $599 $589

Included with Parker Water & Sanitation

PWSD and SVMD Debt• PWSD debt

– Total Debt (12/31/10) $215,288,309– Est. Debt per residence $13,000– Debt to Assessed Value Ratio 0.43

• SVMD debt– Water/Sewer debt (Debt 12/31/10) $18,000,000– Est. Debt per residence initially $6,900– Est. Debt per residence in 2015 $16,000– Debt to Assessed Value Ratio initially 0.23

• Combined Debt after inclusion– PWSD $210,915,654– SVMD $11,100,000– Est. Debt per residence $11,600

Pros for SVMD Intact

• Maintains greater degree of local decision making (debt, rates, contracts, etc.)

• Less water/sewer debt per residence initially

• Larger sewer users pay about 20% more for sewer in 2012 and 2013

• SVMD Board decides cost saving measures

• More oversight of day to day operations

Pros for Inclusion in Parker Water

• Lower future costs

• Takes advantage of cost efficiencies of scale in water and sewer industry

• Increases options available for renewable import projects because of purchasing power

• Gains share of Parker Water’s water and wastewater assets (potential sale of RH storage)

Terms of the Proposed Inclusion

• PWSD owns and operates SVMD system• PWSD funds lift station/pipeline for sewer• PWSD acquires SVMD Rueter Hess Storage in

exchange for irrigation water over 20 years• SVMD shares in all PWSD assets (including

Rueter Hess)• SVMD pays down debt• SVMD pays PWSD rates and mills and their own

reduced mill

How does this work?• Parker Water can serve SVMD with existing

infrastructure• Parker Water can serve SVMD with low marginal costs

of service• Parker Water has invested in major renewable

infrastructure like Rueter Hess, a Water Plant, and renewable water

• SVMD pays portion of Parker Water general obligation debt

• SVMD pays portion of Parker Water revenue debt• SVMD receives services plus renewable water assets

plus wastewater treatment capacity for their contributions• Everyone benefits from cost efficiencies of scale going

forward