City staff outlines plan to replace Arvada Water Treatment Plant; estimates $330 million, phased bonds

City of Arvada utilities staff presented a plan at a study session to replace the Arvada Water Treatment Plant, describing the facility as out of date, operationally constrained and at risk of failing within about five years unless replaced.

Mary Stahl, utilities engineering manager, said the city’s 2020 treatment master plan and follow-up work, including a 2024 pilot plant, led staff to conclude the Arvada plant’s “capacity should simply be replaced.” She told councilmembers the city needs two treatment plants to meet peak summer demand and resilience needs and that the Ralston Water Treatment Plant alone cannot carry the system if Arvada fails.

The presentation laid out technical findings, a budget estimate and a financing path. Staff gave a Class IV project estimate of roughly $330 million for replacement of Arvada treatment capacity and related distribution and intake work and noted that preliminary site-specific rebuild costs at the existing Arvada location could be higher (staff cited an illustrative $346 million figure for a constrained rebuild). Chris (finance staff) said the city plans a phased revenue-bond approach: an initial issuance of up to about $90 million to fund design and near-term work and later bond issuances of roughly $150 million in 2027 and $150 million in 2029 to fund construction, with an estimated project completion in the first quarter of 2030.

Why staff says replacement is needed

Staff said the system met drinking-water safety requirements overall but recorded four regulatory violations in 2024 tied to how the Arvada plant is designed. Bethany Kolb, utility engineer, summarized operational limits: Arvada is a seasonal plant permitted at 16 million gallons per day (MGD) but rarely produces that amount continuously; Ralston is permitted at 36 MGD and is the year‑round workhorse. The city’s summer maximum-day demand last year reached about 40 MGD, meaning both plants must operate to meet peak needs. Kolb said the Arvada plant “will only last another 5 years before failing” (estimate based on condition assessments) and staff warned that losing Arvada would leave Ralston with no practical way to be taken offline for repairs without risking supply interruptions.

Staff described multiple single points of failure, unsafe or non‑compliant spaces (including electrical equipment lacking required clearance and steep/icy access routes), equipment that is obsolete or no longer manufactured, and a pump station at Arvada that had two fires in recent years. Photographs and a video excerpt shown to council highlighted deteriorated concrete, aging filter media and cramped spaces that restrict safe operation and maintenance.

Site constraints and alternatives

A major reason staff recommended replacing Arvada capacity at a new, larger location rather than rebuilding in place is the existing plant’s proximity to dam structures. Bethany Kolb explained that excavation near the “toe” of the dam can risk hydraulic fracturing of dam material; Colorado law requires state engineer approval for construction near a dam. Staff reported the current Arvada site offers roughly two acres for new construction, would require demolition while building (likely enforcing watering restrictions for roughly four years), and might not even receive state engineer approval for deep excavation because much of the replacement facility footprint would fall within 200–400 feet of the dam toe.

Staff also presented alternatives: defer/do‑nothing (deemed risky because of likely mandatory outdoor watering restrictions and potential loss of production), major repair (not feasible given regulatory nonconformance and obsolete equipment), buying full supply from Denver Water (staff said it would transfer control to Denver Water and raise water-quality compatibility and cost concerns), and building additional Ralston capacity (limited by the city’s 1965 contract terms tied to delivery through the Ralston intake). The city’s siting study evaluated 38 candidate locations and narrowed them to two finalists; staff said a formal land decision point will come in the third quarter of the year and noted council had earlier directed site selection work.

Process, technical checks and procurement

Staff described a 2024 pilot plant test that demonstrated higher-rate filtration concepts acceptable to staff and intended to support Colorado Department of Public Health & Environment (CDPHE) acceptance of a Basis of Design Report. Mary Stahl said staff expects to meet with CDPHE on the Basis of Design Report and then proceed to detailed design. The recommended construction method is a construction-manager/general-contractor (CMGC) model with an owner’s advisor to manage complex procurement and long‑lead equipment purchases; staff said a CMGC will provide earlier cost knowledge and mitigate risk on long‑lead items.

Contracts and council action items

Stahl and staff noted two contracts on the meeting consent agenda: the engineering design contract and an owner’s‑advisor contract, and they said CMGC proposals were also submitted for council consideration. The transcript did not record council votes on those items; staff marked them as consent‑agenda contracts to be considered by council.

Financing and customer-bill impacts

Staff presented estimated program costs and financing scenarios and emphasized uncertainty at the current (Class IV) estimate level. The $330 million figure includes contingencies staff described (a roughly 30% budget factor was noted as a program contingency at the Class IV stage). Chris (finance staff) said the city plans phased revenue-bond issues tied to project stages rather than issuing the full amount at once; he said revenue bonds are the current proposal while federal and state funding sources will be evaluated for later phases. Staff projected bond terms of about 30 years for the revenue bonds and said federal/state grants or loans would carry different constraints.

Councilmembers asked about impacts on typical single‑family utility bills; staff presented a 10‑year CIP allocation graphic and warned that, under the presented funding scenario, the portion of an average annual bill tied to water capital and debt rises substantially during construction years. Councilmembers characterized the forecasted rate increases as substantial (one councilmember said water bills could roughly double over about seven years under the current scenario) and asked staff to present the bill‑impact graphic in clearer dollar terms (staff agreed to revise the chart for future workshops).

Timing and next steps

Staff said the city expects to seek initial design and advisory contract approvals (items on the consent agenda), to return this spring with a revenue‑bond authorization and reimbursement resolution for earlier project costs, and to issue the initial debt in early summer. Major construction packages would follow; staff estimated construction completion and replacement capacity online in the first quarter of 2030, subject to budget, permits and design updates.

What was not decided or recorded

The study session was a staff briefing and discussion. Council had not recorded a final, binding vote on construction contracts or bond issuances during the transcripted portion of the meeting. Staff flagged key remaining approvals (design contract awards, owner’s‑advisor contract, CMGC agreements, state engineer approvals for any site near the dam) and additional council direction requests (final site decision timing, rate/fee scenarios for funding).