FIRESTONE — When it comes to water, Firestone’s glass is more than half full. More like almost full.
The months of May and June have seen the town achieving significant advances in its water portfolio.
- It settled its long-running lawsuit with the Central Weld County Water District.
- It authorized the retirement of $20 million of water bonds years ahead of schedule.
- It cranked up, after months of delay, its new water-treatment plant.
Those things have resulted in millions of dollars of savings and/or expansions in its water supplies, as well as creating redundancy in its ability to treat and deliver water to residents as the community grows.
As BizWest reported this month, the years-long dispute over how much Central Weld charged Firestone for water taps ended with a new agreement that sets a temporary lower price for water taps, establishes a lower water-dedication requirement when new developments come on line, and establishes where new customers will be placed — within the Central Weld system or within Firestone’s system.
“The Sixth Addendum (the agreement memorializing the settlement) is very good for the town. It provides for a period of reduced tap fees to the district, which represents about $900,000 in value to the town,” Firestone town manager A.J. Krieger said. “Perhaps most importantly, by curbing the longstanding practice of over-dedicating water, the town realizes a significant gain in the value of its water portfolio. Previous district requirements meant that the town had to dedicate 120% of the water needed for any particular development/user. The Sixth Addendum reduces the town’s dedication requirements to 112%. Reducing the dedication requirement to 112% represents about a $30 million benefit to the town.
“… The Sixth Addendum also sets the stage for the town and district to potentially discuss treatment and distribution of NISP (Northern Integrated Supply Project) supplies, which are important to both entities,” he said.
Krieger said that the settlement agreement required good-faith efforts on the part of Central Weld and the town. He especially called out Frank Jimenez, mayor pro tem, and trustee Don Conyac for their roles in negotiating the settlement.
“They were really integral in getting to the agreement. The care they took to be familiar with the (town’s) water plan combined with the long days of mediation were important to reaching the agreement,” he said.
In addition to the $30 million benefit gained through settlement of the lawsuit, Firestone also took two other steps to shore up its water portfolio.
In December 2022, the town board authorized the issuance of $20 million in water bonds — a private placement with Vectra Bank. The 10-year bond at 3.89% interest contained a provision that permitted the town to retire those bonds without penalty any time during the 10-year period. It needed only about six months to pay them off.
June 14, the board authorized the town to notify Vectra that it would be retiring the bonds early, probably next month.
As Krieger explained, the town had a need for an infusion of cash at the end of last year in order to take advantage of a couple of transactions:
First, it bought 390 acre feet of Last Chance Ditch water. Then, it bought future storage space from LG Everist Inc. in order to store 5,400 acre feet of water once Everist has completed mining gravel.
Revenue from developers for native water credit sales and from infrastructure fees has enabled the town to retire the bonds much earlier than anticipated, thus saving about $4 million in interest expenses, Krieger said.
“Both of these actions (the settlement and the debt retirement) strengthen our Water Fund. Nobody likes litigation and ideally it could have been avoided. But as we look to the future, we know we have bolstered town internal procedures and financially strengthened our Water Fund.”
The plan for future water use in Firestone has also called for building a water-treatment plant so that the town could become less reliant on Colorado-Big Thompson water supplies and treatment by Central Weld water.
Competition for C-BT water has caused share prices to escalate to upward of $73,000 per share. To diversify its supply, Firestone chose to develop native supplies and build its own treatment plant.
Together with the Little Thompson Water District, it began construction in September 2020 of the St. Vrain Water Treatment Plant, a 1.5 million gallon per day treatment plant that was expected to begin operations in April 2022.
The plant was delayed; it began operations June 15 this year.
“We ran into inflationary and supply-chain problems,” Krieger said.
The plant delivers just 7.5% of the water needs in Firestone, making it supplemental to the town’s primary water-treatment source with Central Weld.
“Our intent was to give ourselves an opportunity to expand. The cost and scarcity of C-BT supplies limits our growth. The intent of our water action plan is to scale up on the non-C-BT side. We needed alternative supplies and redundancy in treatment,” Krieger said.
“This is not a competition with Central Weld or C-BT but meant to complement our portfolios.”
The plant was built to be expanded, and the town expects that neighbors might seek to be involved so that they, too, can have an alternative-treatment source.