Donala Water and Sanitation District, April 17 – Workshop covers finances, water supply

• Financial strategy to remain unchanged
• Water supply and projects
• Well 7-DR update
• Well field management
• Plan to improve public outreach
• “Integrated project delivery” resolution

By James Howald and Jackie Burhans

On April17, the Donala Water and Sanitation District (DWSD) held a workshop and a regular board meeting. At the workshop, General Manager Jeff Hodge presented the district’s financial policy. Brett Gracely and Helen Malenda-Lawrence, both consultants with LRE Water, addressed several technical issues, including DWSD’s ground and surface water assets, the four large capital projects the district has underway, and techniques to manage the district’s well field. Board President Wayne Vanderschuere discussed ways to improve public outreach.

At its regular meeting, the board considered a resolution that authorizes “integrated project delivery” by pre-approving three contractors and heard a progress report on well 7D-R from Hodge.

Financial strategy to remain unchanged

Hodge told the board that DWSD’s financial strategy was built on four funds: the Bond Reserve Fund, the Strategic Reserve Fund, the Capital Reserve Fund and the Operating Reserve Fund. The district also maintains a Water Fund and a Wastewater Fund that are used for monthly expenses.

The Bond Reserve Fund is established as a condition of the bonds the district has issued. The district’s bonds were refinanced in 2020, saving the district $170,000 per year in debt service. The funds are protected by bond covenants and can be used only in the event of a default or to pay down principal. It has a balance of $1.25 million, Hodge said.

The Strategic Reserve Fund holds property tax revenues beyond what is needed for operating costs and capital expenses. Strategic Reserve funds are used to acquire water rights, build storage capacity and take advantage of conveyance opportunities. Wells, which typically cost around $2 million to drill, are financed with money from this fund. The balance in this fund fluctuates depending on buying opportunities; the balance is currently $4.44 million, according to Hodge.

The Capital Reserve Fund is established from capital revenues and is used for large-scale projects such as the upgrades installed at the Holbein Water Treatment Plant to remediate radium levels and the repair of water storage tanks. The fund’s balance is $3.6 million.

The Operating Reserve Fund has a balance sufficient to operate the district for six months and is used to protect the district from unforeseen cost increases such as increases in water costs, treatment costs, and emergency repairs. The balance is $3.2 million.

The total of all four funds is about $12.5 million, Hodge said. That amount was confirmed to be adequate by Raftelis, a company that does financial modeling and rates studies for local governments and utilities. Hodge said he recommended making no changes to the four funds.

Water supply and projects

Gracely and Malenda-Lawrence reviewed DWSD’s groundwater and surface water supplies.

The district operates 13 wells, nine of which produce water from the Arapahoe aquifer and four from the Denver aquifer. One of the Arapahoe aquifer wells is out of production and one of the Denver aquifer wells is currently being redrilled. The Arapahoe wells are permitted by the state to provide a maximum of 1,513.7 acre-feet of water per year; actual production is less than that amount. The Denver aquifer wells can provide a maximum of 1,141 acre-feet per year.

DWSD’s maximum groundwater supply totals 2,671 acre-feet per year; actual production is less. Groundwater is a finite resource; as aquifer levels decline, groundwater becomes more expensive to produce until it is no longer a viable resource.

Water from DWSD’s wells is treated at two treatment plants: the R. Hull Water Treatment Plant and the Holbein Water Treatment Plant (HWTP). The two plants together deliver 820.7 acre-feet of water to customers each year.

In addition to its groundwater supplies, DWSD has rights to renewable surface water from the Willow Creek Ranch, which is in Lake County near Leadville, as well as to water from the Laughlin Ditch, which originates in Stratmoor, an unincorporated community near Fountain.

DWSD’s Willow Creek Ranch water rights are 1890 senior irrigation rights converted in water court to municipal uses. The district has rights to a maximum of 280 acre-feet of water per year from the ranch. Currently, this water is stored in the Pueblo Reservoir and then treated and delivered to DWSD customers by Colorado Springs Utilities (CSU) at a high cost that increases with each contract renewal. DWSD has plans to deliver this water to its customers using the Loop water re-use project, without incurring the CSU charges.

The district’s Laughlin Ditch water rights are 1860 senior irrigation rights, originally used to irrigate a pasture, that were converted to municipal uses in 1975. DWSD leases this water to the Arkansas Groundwater and Reservoir Association. (Arkansas in this instance refers to the Arkansas River, not the state.) The district is considering plans to exchange this water to the confluence of the Monument and Beaver Creeks, thereby making it available to district customers.

Gracely and Malenda-Lawrence gave the board an overview of four projects the district is working on:

• Well 7D replacement: Expected to cost $2 million to $2.5 million, well 7D, which failed in 2020, will be redrilled and renamed well 7D-R. The failure of well 11D in late 2024 left the HWTP with no access to water from the Denver aquifer. Well 7D-R will restore HWTP’s access to Denver aquifer water and should be in production by late summer 2025.
  
• The Loop water re-use project: A collaborative water supply initiative involving DWSD, Woodmoor Water and Sanitation and the Town of Monument, the Loop will divert water, including reuseable effluent, from Fountain Creek, and treat, store and convey it to customers in the participating entities. The Loop is a large-scale, long-term project expected to be completed in 2030 or 2031. The Loop received $4 million in start-up financing from the Biden administration’s American Recovery Plan Act and is currently in design phase. Preliminary estimates for the project’s cost are close to $160 million.
  
• Aquifer Storage and Recovery: This pilot study will use well 9A to recharge the Arapahoe aquifer, using the aquifer to store treated water for later use without any loss to evaporation. It is partially funded by the Colorado Conservation Board’s Water Plan Grant, with a $2.4 million match from DWSD.
  
• Direct Potable Reuse: This project will begin the establishment of a system to deliver treated effluent to customers without first returning it to a river or stream. This project does not have an estimated cost.
  

Well 7-DR update

Hodge told the board that a retaining wall for the well, which is adjacent to the district’s offices at 15850 Holbein Dr., should be started by April 21. The next step is to build a sound wall to protect the nearby homes from the noise of drilling as much as possible. Following the drilling, electrical work, pump installation and approval of water samples will take place. The well could be in production by August, Hodge said.

Well field management

Malenda-Lawrence discussed the ways DWSD’s wells can be managed as a well field to extend the life of the underlying aquifers and to remain within the maximum amounts the district is allowed to pump from the Arapahoe and Denver aquifers. She cautioned the board that maximum amounts permitted does not ensure that wells can produce that amount of water. Well age and condition affect well production and the district may choose to run some wells at a throttled rate to avoid deterioration. “Low and slow” is the best way to operate a well for aquifer health, she said.

Hodge commented that the well field study and a dashboard developed by Malenda-Lawrence were helpful in predicting the impact of decisions about how to run individual wells.

Malenda-Lawrence said she used aquifer testing data, sustainable pumping rates, water blending scenarios, and water rights to help water operators make strategic decisions about how to use wells.

Steve Ravel, a project manager with Merrick & Co., reported on a Geographic Information System he developed that maps the district’s distribution and collection systems and provides a database operators can use to make decisions and maintain the infrastructure.

Plan to improve public outreach

Vanderschuere said public outreach builds trust and confidence in the district’s customers and said more needed to be done in that arena because the board relies on customer support. He suggested developing a packet of information that could be given to new residents that would help them understand the special districts that deliver services to them. He also proposed using open houses to build relationships with district customers.

“Integrated project delivery” resolution

Hodge asked the board to consider Resolution 2025-3, which pre-approves three contractors—Lando Excavation LLC, Iron Woman Construction and Environmental Services LLC, and RJ Gleeson Construction—to provide services in urgent situations without going through a typical bidding process. Pre-approval aims to increase efficiency, fast-track design and construction, and provide more quality assurance. The board voted unanimously in favor of the resolution.

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The next board meeting is scheduled for Thursday, May 15 at 1:30 p.m. Generally, board meetings are held the third Thursday of the month at 1:30 p.m. and include online access; call (719) 488-3603 or access www.donalawater.org to receive up-to-date meeting information. The March meeting was delayed by one week to allow adequate notice of a public hearing. The district office is located at 15850 Holbein Drive, Colorado Springs.

James Howald can be reached at jameshowald@ocn.me. Jackie Burhans can be reached at jackieburhans@ocn.me.

Other Donala Water and Sanitation District articles

• Donala Water and Sanitation District, Mar. 27 – New water and sewer rates take effect (4/5/2025)
• Donala Water and Sanitation District, Feb. 20 – Voters remove term limits (3/1/2025)
• Donala Water and Sanitation District, Jan. 16 – Board passes housekeeping resolution (2/1/2025)
• Donala Water and Sanitation District, Nov. 21 – State signs off on radium remediation (1/4/2025)
• Donala Water and Sanitation District, Nov. 21 – Board hears rate and groundwater supply studies (12/5/2024)
• Donala Water and Sanitation District, Oct. 10 – Board receives preliminary 2025 budget, considers rate increase (11/2/2024)
• Donala Water and Sanitation District, Sept. 19- -Board continues term limit debate (10/5/2024)
• Donala Water and Sanitation District, Aug. 15 – Board debates waiving term limits (9/7/2024)
• Donala Water and Sanitation District, July 18 – Board considers request to exclude property (8/3/2024)
• Donala Water and Sanitation District, June 20 – Loop water reuse project discussed (7/6/2024)