Statement of Qualifications. RFQ No. 2011-001WR

Statement of Qualifications Alternative Source of Water Supply Procurement RFQ No. 2011-001WR June 24, 2011

September 7, 2011 Mr. Ron Redd, Utilities Director Ms. Heather Beasley, Water Resources Engineer 175 Kellogg Court Castle Rock, CO 80109 RE: Request for Proposals for Alternative Source of Water Supply Provider RFP No. 2011-05 ( RFP ) Dear Mr. Redd and Ms. Beasley: Renew Strategies LLC and Front Range Resources, LLC are pleased to submit this Alternative Source of Water Supply Proposal to the Town of Castle Rock to support Castle Rock s renewable and reusable water supply project for its citizens. Our renewable, reliable and high-quality water supply and related infrastructure will provide Castle Rock the sustainable, consistent and low-risk water supply it needs to support Castle Rock s citizens and community today and in the future. Renew Strategies and Front Range Resources currently own nearly 4,000 acre-feet of renewable water located in the Lost Creek Designated Groundwater Basin ( Lost Creek Basin ) and have successfully changed the use of that water for municipal purposes. This Lost Creek Water is currently available to Castle Rock for export and can be used by Castle Rock as a complement to and firming supply for WISE or as a stand-alone water supply system to meet its stated goal of 6,000 acre-feet per year. The team we have assembled for this RFP has the experience, expertise and capacity to support Castle Rock s renewable and reusable water supply project. Our Team is multi-disciplinary, including: Renew Strategies/Front Range Resources Short Elliott Hendrickson Inc. Hydro Construction Company, Inc. North Slope Capital Advisors Buchanan and Sperling, P.C. Ramey Environmental Compliance, Inc. Deere & Ault Consultants, Inc. ERO Resources Our team looks forward to working collaboratively with Castle Rock to establish the best overall, most reliable and lowest risk water supply system for Castle Rock in terms of water resources, infrastructure, delivery, timing, management and financing. I am the lead contact person and have the authority to sign and negotiate all contract documents with Castle Rock. Renew Strategies address, telephone and facsimile numbers are listed below. My e-mail address is msullivan@renewstrategiesllc.com and my direct number is 303-376-9705. Also available to answer questions are Bill Owens (bowens@renewstrategiesllc.com), Jack Hibbert (jhibbert@renewstrategiesllc. com) or Margaret Medellin (mmedellin@renewstrategiesllc.com). We look forward to working with you. Sincerely, RENEW STRATEGIES LLC Mark Sullivan, Chief Executive Officer Renew Strategies LLC 999 18th Street, Suite 270 North Tower, Denver, CO 80202-2499 Phone: 303-376-9700 Fax: 303-376-9720

1.0 Introduction The Town of Castle Rock has planned to ensure infrastructure and services are in place to support its existing and future residents and businesses. The Town s Strategic Plan recognizes that development of a renewable water supply system is key Renew Strategies and Front Range Resources (collectively, referred to herein as Renew Strategies ) currently own and control water rights that annually yield 3,886 acre-feet (AF) of fully consumable, renewable water (the Lost Creek Water ). The Lost Creek Water is produced from the Lost Creek Designated Ground Water Basin (LCB) alluvial aquifer, which is located northeast of downtown Denver. The Lost Creek Water is available for export to Castle Rock. The 3,886 AF of annually renewable water will meet 100 percent of Castle Rock s water supply objectives for 2017, plus an additional 1,386 AF of Castle Rock s 2025 water supply objective. If selected to provide an alternative source of water to Castle Rock, Renew Strategies will immediately begin acquiring additional water rights located in the LCB to provide the remaining 2,114 AF of annual water yield for Castle Rock s renewable water project. Renew Strategies has already identified numerous potential water acquisition opportunities and has had discussions with potential sellers to ensure availability of the additional 2,114 AF of annual yield water supply. Renew Strategies will obtain third-party financing to purchase the additional 2,114 AF of annual yield water rights and pay the costs related to the change of use of that water for municipal purposes and export to Castle Rock. Thus, Castle Rock would not expend funds on the additional 2,114 AF of water until after the change of use process has been completed and the water is available for export to Castle Rock. The Lost Creek Water Supply is Sustainable and Consistent 1.0 Renew Strategies to a sustainable economy and identifies securing a reliable long-term source of water as an essential component for Castle Rock s high quality of life. A recent Community Survey indicated that a majority of citizens agree with the Town s vision and concur that securing a long-term renewable water supply should be a high priority for the Town of Castle Rock. Lost Creek Designated Basin Renewable Ground Water The Lost Creek Water will provide Castle Rock the sustainable, consistent and low-risk municipal water supply Castle Rock seeks to obtain through the RFP.» The Lost Creek Water is a renewable and sustainable water supply, demonstrated by maintenance of water levels in the LCB during 50 years of use and backed by a 2010 USGS study, and each acrefoot delivered to Castle Rock annually may be reused by Castle Rock and is fully consumable;» 3,886 acre-feet of the Lost Creek Water has already been adjudicated for municipal use and approved for export, which eliminates Castle Rock s financial and other risks relating to locating, purchasing and adjudicating a significant portion of the water supply;» The Lost Creek Water allows for year-round pumping and includes firming storage, which provides flexibility to deliver water to Rueter-Hess Reservoir and reduces Castle Rock s costs because Castle Rock does not need to purchase additional storage north of the north end of the Aurora Prairie Waters or ECCV pipelines;» The Lost Creek Water is a firm dry-year yield water supply. It is not a 60 percent average-year yield water supply, which means 100 percent of the Lost Creek Water is available each year; and» Because the Lost Creek Water does not require exchanges, augmentation, storage and/or temporary supply plans, Castle Rock s costs and risks are reduced from a delivery, operational and financial standpoint. Renew Strategies Introduction 1-1

The LCB Project Complements Castle Rock s Existing Portfolio of Water Assets and Will Enhance Castle Rock s Expanded System Castle Rock is actively diversifying its water portfolio by planning, acquiring and constructing infrastructure for its long-term water supply needs. By taking a proactive approach to secure its future, Castle Rock now has the ability to incorporate flexibility and diversity in its water acquisition plans. The Lost Creek Basin Project water rights proposed by Renew Strategies complement and supplement Castle Rock s strategic planning goals, existing portfolio of water assets and infrastructure, and will provide flexibility and other benefits to enhance the Town s plans for system expansion.» Strategic Planning Goals Castle Rock s Water Resources Strategic Master Plan from January 2006, provides the vision for Castle Rock s water resource system: A community-endorsed strategic plan establishing feasible water resource development opportunities to assure a long-term sustainable water supply for the Town of Castle Rock. Lost Creek Basin ground water is a sustainable, renewable water supply, demonstrated by maintenance of water levels during 50 years of use, and backed by a 2010 USGS study, which found that continued operation of wells for either agricultural or municipal purposes is sustainable in the future.» Regional Programs The South Metro Water Supply Authority/WISE provides a forum for Castle Rock to participate in the development of an innovative regional water supply concept. Participation in this group not only provides Castle Rock with water from the WISE system, but also gives Castle Rock access to large water systems infrastructure that can be used to provide additional water to Castle Rock s water portfolio. As discussed in more detail below, Renew Strategies water supply has considerable flexibility, whether delivered directly to Rueter-Hess Reservoir or in combination with another project, such as WISE. The LCB water project would supplement and firm WISE supplies. The other advantage of the Lost Creek Water is that it is available year-round and includes storage in the LCB alluvial aquifer, which could provide Castle Rock with cost savings through use of the lower cost off-peak capacity in the Aurora Prairie Waters pipeline and flexibility in integrating its water supply system with WISE.» ECCV Pipeline Castle Rock s ownership of 1.4 million gallons per day (mgd) of capacity in the ECCV pipeline provides the ability to deliver treated water to a master meter location at C470 and Smoky Hill Road. The Lost Creek Water is available year-round and includes storage in the LCB alluvial aquifer. These attributes of the Lost Creek Water could provide Castle Rock with cost savings by allowing Castle Rock to use lower cost, offpeak capacity in the ECCV pipeline. The Lost Creek Water s flexibility complements existing Rueter-Hess storage either independently or in combination with WISE. Purchase or construction of new storage is not required. Purchase of Lost Creek Basin water provides storage in the aquifer it is not an EXTRA cost. Lost Creek Basin ground water takes advantage of existing investments in Rueter- Hess Reservoir and the ECCV pipeline, as well as providing Castle Rock with either firming or peaking water.» Rueter-Hess Reservoir Castle Rock owns capacity in Rueter-Hess Reservoir to improve flexibility in the delivery of its water supplies. Lost Creek Basin ground water can be delivered to Rueter-Hess year-round. This flexibility will work well with both the proposed WISE system, as well as Renew Strategies water rights. Renew Strategies water rights include storage and year-round delivery. These water rights can supply water as and when needed which benefits Castle Rock both operationally and for drought protection. The Renew Strategies water supply can be delivered to meet Castle Rock s needs on a daily, weekly, monthly or annual basis. Renew Strategies Introduction 1-2

Figure 1 Regional Infrastructure Regional Infrastructure Sterling 25 Cheyenne Lost Creek Pipeline (Proposed) WELD COUNTY 76 Lost Creek Well Field Lost Creek Basin Prairie Waters Pipeline East Cherry Creek Valley Pipeline ADAMS COUNTY DOUGLAS COUNTY E-W Pipeline 70 ARAPAHOE COUNTY Chatfield Reservoir 25 Chambers Pipeline (Proposed) Rueter Hess Reservoir Rueter Hess Pipeline (Proposed) ELBERT COUNTY N Renew Strategies Introduction 1-3

Summary of Project Attributes and Benefits The Lost Creek Water has numerous positive attributes that make it an unique and reliable municipal water supply. The following table summarizes these attributes and discusses their benefits in further detail. Table 1 Summary of Project Attributes and Benefits Attribute Renewable Water Supply Firm Yield Supply Year-Round Pumping Banking Storage No Augmentation Plan Required No Exchanges Required Ownership of Water No Gaps in Delivery Infrastructure 3,886 AF is approved for municipal use and export Remaining 2,114 AF of water does not require investment by Castle Rock until the change-ofuse is final Delivery Flexibility Located Within a Well-Managed Designated Basin Comment The water level in the LCB alluvial aquifer shows upward trends over past 50 years. Recent studies indicate the volume of water in the aquifer may be up to 2.0 million AF 100 percent of the Lost Creek Water is available each year (versus 60 percent average-year yield water available from South Platte and its tributaries) Castle Rock can pump water when it wants or when it needs water The Lost Creek Water rights include decreed rights to store Lost Creek Water in the LCB aquifer for up to 3.2 years The Lost Creek Water does not require an augmentation plan The Lost Creek Water does not require exchanges on the South Platte River or its tributaries Castle Rock will own the Lost Creek Water in fee title The Lost Creek Water delivery system does not have any gaps or unaccounted for future costs The Lost Creek Water is ready for delivery Renew Strategies will pay for costs to purchase and adjudicate the remaining 2,114 AF and will change the use to municipal use before Castle Rock incurs any costs relating to the remaining 2,114 AF The Lost Creek Water provides Castle Rock tremendous flexibility for the delivery of the water The Lost Creek Groundwater Management District and the Groundwater Commission promulgate rules and regulations to protect water levels in Designated Basins Benefit and/or Reduced Risk to Castle Rock Reliable and consistent supply means less risk Reduces risk in average and dry yield years and reduces project costs because storage not required to firm up supply Provides flexibility to deliver water to Rueter-Hess Reservoir and reduces project costs because storage not required to allow for year-round pumping Storage allows flexibility to deliver water to Reuter Hess Reservoir and reduces project costs because storage not required to firm up supply, allow for yearround pumping or for flexibility in delivery Not having to develop an augmentation plan to deliver water reduces Castle Rock s project costs and its risks for delivery, management and operations of water supply Not having to develop and rely on exchanges to deliver water reduces Castle Rock s project costs and its risks for delivery, management and operations of water supply Reduces risks of future interruption of water supply and gives Castle Rock control of its water supply Reduces risk of future interruption or delivery problems and reduces future costs Reduces risks of obtaining water supply, identifying water supply, and costs related to adjudication Castle Rock reduces its initial costs and reduces its risk of paying for water before it can be used for municipal purposes Castle Rock can deliver the water when it wants, which reduces costs and enhances its use of the Rueter-Hess Reservoir Castle Rock will have an added layer of security in managing and maintaining water levels in the LCB, which ensure the long-term reliability of the LCB Renew Strategies Introduction 1-4

The Renew Strategies Team Renew Strategies has assembled a robust team of dedicated and experienced professionals to provide a renewable and sustainable water supply to Castle Rock. Our Team has a successful track record of supplying water to Front Range communities and businesses and has dedicated their careers to finding sustainable and renewable water supplies for communities. Our Team will be directed by Mark Sullivan and Bill Owens. Mark and Bill will ensure that the Team s resources are committed to working with Castle Rock over the course of the project. Team members have successfully worked together for more than five years; some members have worked together for over a decade. The key management of Renew Strategies are:» Mark Sullivan, J.D., Managing Director and Chief Executive Officer» Bill Owens, Managing Director» Jack Hibbert, P.E., Senior Vice President, Water Resources Development» Margaret Medellin, P.E., Vice President, Water Resources Development» G. Paull Nation, Jr., AICP, Director of Land Resources» Thomas J. DiRito, Director of Development and Construction The Organizational Chart in the Appendix, Firm Resumes, shows the Team members responsibilities during the project. Renew Strategies has worked with some of the best professionals in the industry on successful projects in the past and, at the Town s discretion, would add these valuable resources to the Team. Detailed resumes are provided for key personnel in the Appendices under Firm Resumes and Team Resumes. The other Team members include the following professionals: Engineering Short Elliot Hendrickson, Inc. (SEH) is a full service firm with more than 550 professionals. SEH and a firm recently acquired by SEH, Jacobson-Satchell Consultants, Inc., have worked successfully with Renew Strategies team members on multiple projects. They completed a preliminary design of the well field, collection system, water treatment plant and the conveyance system to deliver water from the LCB to the Aurora or ECCV pipeline. Deere & Ault Consultants, Inc. (D&A) is an engineering firm specializing in water resources, civil, geotechnical, and tunneling engineering. D&A staff have participated in over 200 water rights cases, provided expert witness testimony in over 50 cases, and supported the Renew team on the change of use proceedings for the 3,881 AF. In cooperation with Renew Strategies, D&A would be responsible for water rights engineering work, including change of use applications submitted to the Colorado Ground Water Commission. Construction Hydro Construction Company, Inc. is a Colorado-based firm in business for 45 years, specializing in water, wastewater and related facilities. Operations Ramey Environmental Compliance, Inc. will ensure that all Lost Creek system components are fully maintained and operated. Ramey is a Colorado-based company, which specializes in contract operation and maintenance of water and wastewater facilities, collection and distribution systems. During their 25 years in the water treatment industry, they have earned numerous awards, including national recognition for excellence from the USEPA. This Project involves a master meter concept and a strong operator is required to ensure delivery of the water. Legal Buchanan and Sperling, P.C. have been working with Renew Strategies on water rights, easements and other related issues in the Lost Creek Basin for more than five years. Tim Buchanan has worked in the Lost Creek Basin since 1989, and is an expert in Colorado Designated Ground Water Basins. Renew Strategies Introduction 1-5

Financing Stephanie Chichester and Bill Dougherty with North Slope Capital Advisors are responsible for financial duties, including bond advice and modeling, if necessary, and will assist Renew Strategies in structuring the financing for the water and infrastructure needed to deliver the renewable and sustainable Lost Creek Water to Castle Rock. Environmental and Permitting ERO Resources has consulted on water resource and environmental issues throughout the Intermountain West since 1981. With offices in Denver, Durango, Hotchkiss, and Boise, Idaho, ERO strives to balance development with the natural environment within a framework of legal requirements, agency compliance, and public involvement. q Renew Strategies Introduction 1-6

2.0 Renew Strategies Lost Creek Project Renew Strategies owns water rights located within the Lost Creek Designated Ground Water Basin, which can provide an annual yield of 3,886 AF of fully consumable, renewable water. The location of the Renew Strategies Lost Creek Project Designated Ground Water Basin is shown in Figure 2. The following discussion describes in detail the Lost Creek Designated Ground Water Basin (LCB) and the Renew Strategies Lost Creek Project. 2.0 Renew Strategies 104 30' Sou th Platte River 34 104 15' Riverside Reservoir Masters Empire Reservoir Figure 2 Location of the Renew Strategies Lost Creek Project Designated Ground Water Basin 40 15' Box Elder Creek Box E lder Creek Keenesburg Lord Reservoir Prospect Valley L ost C Roggen Sand Creek reek 76 Kiowa Creek 52 MORGAN COUNTY Denver Front Rang e urban corridor Map area L ong D raw 40 00' Prospect Reservoir Olds Reservoir WELD COUNTY ADAMS COUNTY C O L O R A D O Sand C r ek Horse Creek Reservoir L ost C reek 0 5 10 MILES Box E lder C reek West San d Creek 79 0 5 10 KILOMETERS Legend Lost Creek Designated Ground Water Basin administrative boundary Comanche C reek Lost Creek drainage basin boundary Bennett 36 Ephemeral stream 39 45' Box E lder C reek 70 Kiowa Creek ARAPAHOE COUNTY Base from U.S. Geological Survey digital data, 1:100,000 Streams and reservoirs modified from Schupbach and Lewis (1996a, b). Roads modified from Colorado Department of Transportation. Designated basin extent modified from Lewis (1996). North American Datum of 1983 Renew Strategies Renew Strategies Lost Creek Project 2-1

The Lost Creek Designated Ground Water Basin Alluvial Aquifer: The Water Supply for the Lost Creek Project The Lost Creek water supply for Castle Rock will be delivered from the LCB alluvial aquifer, which is located approximately 25 miles northeast of Denver. The basin is about 40 miles long from north to south, and 10 miles wide from east to west. The LCB alluvial aquifer has been used for agricultural irrigation since the early 1900s, and currently has a total of approximately 287 producing wells, from which approximately 50,000 AF of water can be pumped annually. At the time of designation in the 1960s, the LCB aquifer contained an estimated 1.3 million AF of water. Recent studies indicate the LCB aquifer may contain as much as 2 million AF of water. The Colorado Water Conservation Board evaluated and identified the northern two-thirds of the LCB (where Renew Strategies wells are located) as both the first and second best alluvial storage locations along Colorado s Front Range. Alluvial Aquifer A shallow aquifer formed by geological sediments deposited in a stream channel or on a floodplain. It replenishes itself annually from natural precipitation and runoff. There are two types of water in the LCB: (1) water within the alluvial aquifer (see Designated Basin Rule 5.2.5), and (2) water within the Denver Basin Bedrock Aquifers (see Designated Basin Rule 5.3). The water in the alluvial aquifer is primarily located within approximately the first 200 feet below the ground surface and a portion of the water is annually pumped from the 287 producing wells and then naturally recharged. The LCB is analogous to a surface water reservoir and responds to annual changes in water supply conditions, such as precipitation and runoff, but without the water losses from evaporation that surface water reservoirs experience. All the water rights offered to Castle Rock by Renew Strategies withdraw water from the alluvial aquifer, not the Denver Basin. In 2006, the South Adams County Water and Sanitation District acquired ownership of water rights in the LCB alluvial aquifer that annually produce 1,225 AF of water. Designated Ground Water Basins Colorado statues define designated ground water as water which in its natural course would not be available to and required for the fulfillment of decreed surface rights. It also includes ground water in areas not adjacent to a continuously flowing stream wherein ground water withdrawals have constituted the principal water usage for at least 15 years prior to initiation of a Designated Ground Water Basin. There are currently eight Designated Ground Water Basins on the eastern plains of Colorado, as established by the State Legislature in 1965. The Colorado Ground Water Commission issued its Final Order designating Lost Creek Basin as a Designated Ground Water Basin on May 1, 1968. Renew Strategies Renew Strategies Lost Creek Project 2-2

The LCB Alluvial Aquifer is a Sustainable Water Supply The LCB alluvial aquifer has been extensively monitored over the past 50 years and the water table data for the LCB demonstrate that the LCB is a sustainable, renewable water supply. The following Figure 3 illustrates the historical water levels in the LCB alluvial aquifer as measured by six monitoring wells during the period from 1960-2011. Figure 3 Lost Creek Basin Ground Water Trends The locations of the six monitoring wells represented in Figure 3 are provided on Figure 5 (see page 2-10), and the numbering of the monitoring wells generally proceeds from the northern to the southern end of the LCB with GS-1 to the north and GS-6 to the south. The dotted lines on Figure 3 are the trend lines for water level measurements for each of the six monitoring wells. The trend lines indicate that since 1960, water levels continue to increase, which means that more water is recharged to the alluvial aquifer than is withdrawn. USGS Study Verifies Lost Creek Basin as a Sustainable Water Supply In 2010, the US Geological Survey (USGS) published Scientific Investigations Report 2010-5082, Hydrogeology and Steady-State Numerical Simulation of Groundwater Flow in the Lost Creek Designated Ground Water Basin, Weld, Adams, and Arapahoe Counties, Colorado, based on approximately five years of study of the Lost Creek Basin. The USGS developed a ground water model of the basin using MODFLOW-2000 to evaluate the steadystate operation of the LCB. One of the key findings of this study was that inflow to the LCB exceeded the outflow for the period of record used for study (1990-2001). This finding shows that continued operation of wells for either agricultural or municipal purposes is sustainable in the future, thus providing a renewable source of water supply. (Source: Table 9, Simulated steady-state ground water budget of the Lost Creek Designated Ground Water Basin model representing conditions for 1990 2001.) Renew Str ategies Renew S trat e g ie s Los t C re e k P roje c t 2-3

Lost Creek Basin Regulation and Management The Renew Strategies water rights are located within the LCB, which is managed by the Colorado Ground Water Commission and the Lost Creek Ground Water Management District ( District ). Colorado Ground Water Commission The LCB was created pursuant to the Ground Water Management Act of 1965, Section 37-90-101, et seq., C.R.S. ( Ground Water Act ). The Ground Water Act created the Colorado Ground Water Commission ( Commission ), and the Commission is empowered to create designated ground water basins and determine rights for use of the water. Through the Designated Basin Rules, the Commission has established terms and conditions for implementing the statutory requirements for administration of ground water in designated basins. The State Engineer s office administers the water rights on behalf of the Commission (see Section 37-90-110, 111, C.R.S.). The Commission has standardized the procedure for changes of use and has promulgated rules and regulations for the change of use proceedings (see 2 CCR 410-1 the Designated Basin Rules ). The change of use proceeding seeks to determine the annual amount of water historically withdrawn from the alluvial aquifer and the amount of the water that was consumed by the crops. Lost Creek Ground Water Management District Senate Bill 2010-052 Protects Lost Creek Basin In addition to protection by the Colorado Ground Water Commission and the Lost Creek Ground Water Management District, the basin well owners were afforded additional protection by recent legislation. Senate Bill 2010-052 addressed the legal status of ground water in Designated Ground Water Basins and was signed into law on March 31, 2010. This important legislation reaffirms that the legal status of ground water in a designated basin cannot be challenged after the date of the Final Order that designated the basin. The Colorado Ground Water Commission issued its Final Order designating Lost Creek Basin as a Designated Ground Water Basin on May 1, 1968. As a result of this legislation, the legal status of the LCB as a designated basin is protected. The Lost Creek Ground Water Management District was created pursuant to the procedures of the Ground Water Act. The Lost Creek District is authorized to regulate the use, control, and conservation of the ground water in the District, (see Section 37-90-130, C.R.S.), and the District also promulgates rules for the use, control, export and conservation of ground water in the District. The Lost Creek District is responsible for management of the water supplies within the alluvial aquifer and is also authorized by Colorado law to review and approve the export of water out of the Lost Creek Basin. The water within a designated ground water basin is not subject to a call for water by surface water rights located within or outside of the designated ground water basin. This means that no augmentation plan is required for the use and export of the LCB water. All of the water rights that are currently owned by Renew Strategies have been changed by the Commission from agricultural irrigation to municipal and other uses of the water (see Designated Basin Rule 4.2.17). The Renew Strategies management team has extensive experience in successfully changing LCB water rights from agricultural use to municipal use. Currently 3,449 AF of annual water diversions owned by Renew Strategies have been approved for export from the Lost Creek District, and the export approval for the remaining 437 AF of water is pending before the Lost Creek District. The water rights that produce the annual yield of 3,886 AF proposed as part of this transaction are fully owned in fee title by Front Range Resources. Renew Strategies manages Front Range Resources assets and has control of and the authority to sell the water. As noted above, these water rights have been changed from irrigation use to municipal use and are immediately available for export to Castle Rock for its municipal use. Each well has: Renew Strategies Renew Strategies Lost Creek Project 2-4

1. Final well permit, which authorizes the removal of water from the LCB alluvial aquifer; 2. Final decree from the Commission, which changes the use of the LCB water from agricultural irrigation to municipal and other uses; and 3. Export approval from the District (for 3,449 AF, the remaining 437 AF of water is pending before the District, as stated above). As discussed above, the additional 2,114 AF of water rights identified in the RFP will be acquired and its use changed by Renew Strategies prior to sale to Castle Rock. Banking Storage Included with the LCB Water Rights The Banking Storage provision in the Final Orders for the LCB water rights provides delivery flexibility, operational storage and firming storage at no additional cost above the purchase price of the water rights. The Banking Storage provision is structured so that if a well is not pumped during any given year, the water remains in the LCB alluvial aquifer in storage and can then be pumped during a subsequent year. This provision allows an individual well to be pumped either each year, or stored up to approximately three years before being pumped. This allows the Town to meet municipal needs, The Lost Creek Basin s Banking Storage provision eliminates the extra costs required to provide firming storage north of Aurora s Prairie Waters pipeline and the ECCV pipeline, which would be required if agricultural water rights are acquired from the South Platte River. By not having to separately develop operational and firming storage, Castle Rock could save between $10,000 to $15,000 per AF of firm water supply. such as drought relief, or to supplement intermittent deliveries from other water supplies, by pumping water out of the LCB wells when it is needed and by being able to bank unused water for use in later years. The Banking Storage provision eliminates the extra costs required to provide firming storage north of Aurora s Prairie Waters pipeline and the ECCV pipeline, which would be required if agricultural water rights are acquired from the South Platte River. By not having to separately develop operational and firming storage, Castle Rock could save between $10,000 to $15,000 per AF of firm water supply. This is a significant benefit when comparing LCB water to surface water from the South Platte River and other potential water supplies. The cost savings of using Banking Storage, compared with operational storage, as may be required with other water rights, illustrates the benefits of LCB water rights. Operational storage with respect to South Platte River water rights is required because the water rights can only divert water during the late spring and summer months. However, the water supply needs of Castle Rock are not limited to only the spring and summer, and water must be available for delivery to Castle Rock throughout the year. Operational storage requires a storage reservoir that can store water diverted from the South Platte River in the late spring and summer months for later delivery to Castle Rock. In general, a municipal user of South Platte River water rights will require at least one acre-foot of storage for one acre-foot of water yield (i.e. 6,000 AF of water would need 6,000 AF of storage). If evaporation losses are considered, the amount of storage needed will increase. In order for Castle Rock to ensure that water demand and water supply are fully utilized, storage capacity is required with any South Platte River rights. Additionally, firming storage is needed to firm average year water rights. Typical numbers to firm South Platte River water rights may run one to two acre-feet of storage for each acre-foot of yield firmed. Therefore, if Castle Rock purchases South Platte River water, it may need to acquire 12,000 AF to 15,000 AF of storage to actually net 6,000 AF water supply. Recent storage costs along the Front Range have ranged from $3,000 to $10,000 per AF of storage. Renew Strategies Renew Strategies Lost Creek Project 2-5

The Costs of the Lost Creek Project Water Rights The costs developed below are based on two different project scenarios the Base Project and the Proposed Project.» Base Project this project assumes a treatment system is designed to deliver the 3,886 AF currently owned by Renew Strategies and available to Castle Rock. The collection and conveyance system for the Base Project will deliver more than 8,000 AF in any year, which allows utilization of Banking Storage. If Castle Rock decides to take further advantage of the Banking Storage, infrastructure costs will need to be adjusted to reflect the additional capacity requirements.» Proposed Project this project is designed to deliver 6,000 AF annually. The unit costs are Although our costs are estimates, all capital shown in Table 2. They were calculated using cost infrastructure items are included. costs that were developed at a conceptual design level for the Base Project, and increased pro rata for the Proposed Project. Table 2 Project Unit Cost Factors ($ per AF) Project Unit Cost Factors Base Project Proposed Project deliver 6,000 AF Well System ($ per AF) Engineered for permit capacity The Existing Lost Creek Project Well System Collection System ($ per AF) Engineered for over 8,000 AF Treatment System ($ per AF) Engineered for about 3,886 AF Conveyance System ($ per AF) Engineered for over 8,000 AF Same as Base 110% of Base Same as Base 110% of Base The Lost Creek Project Well System presently consists of 35 wells located throughout the LCB. These wells are of varying age and condition. In general, the wells and well houses are typical construction for irrigation systems in agricultural areas and utilize an 18-inch plain steel casing with a perforated screened interval within the saturated water zone. The currently existing well houses are generally of low-grade wood and corrugated metal construction and would not be considered weather-proof structures. Electricity for the wells is provided by the local electricity provider. Renew Strategies owns an easement of approximately 300 feet around each well to re-drill the well and provide sufficient construction space for any new well that may be required. The Proposed LCB Well Improvements The 3,886 AF will be delivered from 35 existing wells. It is anticipated the existing wells will need to be either rehabilitated or replaced as part of the Project. For purposes of developing costs estimates for the Project, we are assuming that 50 percent of the wells will need to be rehabilitated and 50 percent replaced. Rehabilitation will consist of removing the existing pumping equipment, video surveying the well and installation of a new 12-inch steel casing and steel screens. Replacement wells will be considered for those wells for which rehabilitation is not feasible due to the condition of the well. Replacement well tasks will include drilling, installation and development of a new 12-inch well. Existing easements are available around all the wells to drill new wells generally within 300 feet of the existing well location. Figure 4 shows a schematic of a typical well system arrangement. Each well will have a screened interval with a depth and screen-opening size that is optimized using specific local hydrogeologic data captured during the drilling process by the on-site geologist. A 12-inch steel casing will be utilized above the screened interval and connection will be made to a pitless adapter unit that penetrates the ground surface and is sealed. A submersible pump/motor combination will reside within the well to deliver the water to the raw water collection system and treatment. The well house will contain the electrical control panel, VFD, and SCADA equipment. Renew Strategies Renew Strategies Lost Creek Project 2-6

Figure 4 Typical Well System Renew Strategies Renew Strategies Lost Creek Project 2-7

The Estimated Costs of the Proposed LCB Well Improvements Table 3 contains estimated well improvement costs, and assumes 17 wells will need rehabilitation and 18 wells will need to be replaced. The costs are based on using either a Design/Build or Construction Manager at Risk delivery method. Fixed costs include a new well house, new pumping equipment, new piping and appurtenances, new discharge piping, site civil, variable frequency drives and SCADA controls. Because the design was to have the flexibility to deliver more than the required AF, there may be some unit cost savings for the Proposed Project during final design. Table 3 Well Improvements Estimated Capital Costs Item Quantity Unit Cost Well rehabilitation 17 wells $511,500 Well replacement 18 wells $2,058,100 Fixed Costs 35 wells $2,362,800 Construction Total $4,932,000 Overhead and Profit $493,000 Engineering $384,000 Total Design/Build Cost $5,809,000 Total Design/Build Cost per AF for Base Project $1,500 Total Design/Build Cost per AF for Proposed Project $1,500 The Proposed Lost Creek Project Well Collection System The well collection system is a network to link the wells to a central location. The well collection system was conceptually designed to gather the water produced at the wells and deliver the water to the water treatment facility through a network of pipelines. The design of the collection system was developed for the Base Project, which allows the water collection of more than 8,000 AF. The collection system was designed assuming uniform collection of water throughout the year. Base loading this water and requires smaller infrastructure requirements than peak loading. The well collection system in the LCB will gather the water from the 35 wells. The collection system is a relatively simple network of pipelines ranging in diameter from 6 to 20 inches. The well collection system is designed to deliver water from each well to either a treatment facility located in the LCB or to a conveyance pipeline that will deliver the LCB water rights out of the LCB to either the Prairie Waters pipeline or the ECCV pipeline. The major considerations in the design of the well collection system include well and water treatment plant locations, pumping rates, pumping pressures and pipe routing. Each well has permitted pumping rates, including a maximum allowable rate of pumping and a maximum annual rate of export. The lowest maximum pumping rate well is 500 gallons per minute (gpm), while the high maximum pumping rate well is 1,200 gpm. The export use permitted for each well ranges from a low of 23.2 AF up to 219 AF. Assuming a constant pumping rate over the year, these export rates equate to a low of 14.4 gpm to a high of 136 gpm. The sizing of the well collection system piping for the Base Project assumed a future capacity of the water treatment plant (WTP) of 7.7 mgd (this includes a 10 percent service factor). This design criterion delivers 8,500 AF per year to the WTP. The 8,500 AF capacity allows for the use of the Banking Storage discussed above. The pressure within the pipeline sections includes the static pressure (or elevation difference) and the dynamic pressure (or friction losses, along with minor losses attributed to bend, fittings and other appurtenances). In determining the static pressure, it was assumed clear well storage would be constructed at the WTP with a maximum storage height of 40 feet. In the layout of the well collection system, it was assumed the pipeline will be located in the roadway or section rights-of-way. Figure 5 shows the well locations and the location of the proposed WTP. This figure shows that most of the wells are located north and east of the WTP, while a few are located south and west of the WTP. Thus, there are two collection system main pipelines: one located north of the Renew Strategies Renew Strategies Lost Creek Project 2-8

WTP and another located south of the WTP. For the northern collection system, a main header has been designed for a maximum flow rate of 5,350 gpm allowing the future WTP capacity to be pumped from any set of wells. The piping from each individual well to the main lines is sized for 400 gpm, while the various collection piping sub headers are sized for 400 gpm per connected well until the design capacity of 5,350 gpm (approximately 14 wells) is reached. Three pipe materials are typically used for water piping of the size and pressure of the proposed collection system. These are ductile iron pipe (DIP), high-density polyethylene (HDPE) and polyvinyl chloride (PVC). The PVC pipe is manufactured according to the requirements of ASTM C-900 or C-905, depending upon diameter. There are elevation changes between the ends of the collection system and the WTP. The elevation change between the most northern well and the WTP is approximately 225 feet (or 97.4 psi), while the elevation change between the most southwestern well and the WTP is approximately 15 feet (or 6.5 psi). In addition to the elevation change or static pressure, the friction loses were also determined for each pipeline section. Renew Strategies Renew Strategies Lost Creek Project 2-9

Figure 5 Well Collection System and Location of the Water Treatment System Renew Str ategies S chedule 2-10

The Estimated Costs of the Proposed Lost Creek Project Well Collection System The estimated per unit costs of the well collection system are set forth in Table 4. The costs are conservative because there may be opportunities to combine well pumping locations or because the scale of the larger system that includes the additional 2,114 AF of water may create cost savings. The costs are based on using either a Design/Build or Construction Manager at Risk delivery method. Table 4 Well Collection System Estimated Capital Cost Item Quantity Unit Cost Collection System 148,000 Linear feet $8,280,000 Construction Total $8,280,000 Overhead and Profit $828,000 Engineering $452,000 Total Design/Build Cost $9,560,000 Total Design/Build Cost per AF for Base Project $2,500 Total Design/Build Cost per AF for Proposed Project $2,750 The Proposed Lost Creek Project Water Treatment Plant The RFP requires that delivered water quality not exceed 500 milligrams per liter (mg/l) total dissolved solids (TDS) to the two delivery points, which is consistent with secondary drinking water quality standards. Water quality in the Lost Creek Basin is good, but the average TDS concentration in water produced from selected wells exceeds 500 mg/l. Therefore, if the Lost Creek Water is delivered into either the Prairie Waters or ECCV pipelines, it will either need to be blended and/or treated to meet Castle Rock s 500 mg/l requirement. A Water Treatment Plant (WTP) located in the LCB using reverse osmosis (RO) is viable and Renew Strategies has prepared preliminary plans for such a facility. If a WTP is located in the LCB, because TDS is the only constituent of concern in the LCB water, it would be feasible to treat about A Source Water Protection Program using land covenants has been implemented in the LCB that protects the ground water from surface pollution. 65 percent of the total water supply and then mix it with the remaining 35 percent to meet the 500 mg/l standard. This is a unique advantage LCB water has over South Platte River water. It has been determined by the Colorado Department of Public Health and Environment that Lost Creek Basin water is not under the influence of any waste water effluent. Whereas 100 percent of the South Platte River water needs to be treated to address its many elevated water quality constituents of concern. Moreover, if a regional system, such as WISE, delivers the Lost Creek Project water through its system, it is Renew Strategies understanding that WISE participants may, in the future, consider a regional reverse osmosis plant, which would mean the costs of treatment and operations of the WTP in the LCB would not need to be incurred. Nanofiltration and reverse osmosis were considered the best options because they could treat the water for TDS, and were the most cost efficient options. Two different options using NF and RO were considered for the Lost Creek Project WTP. Nanofiltration is a low to moderately high filtration technology that ranges between ultrafiltration (UF) and RO, and is used to separate larger size solutes from aqueous solutions by means of a semi-permeable membrane. The nominal pore size of the membrane is typically about one nanometer (nm which is 10-9 m). Reverse osmosis is a filtration method that removes molecules and ions from the water by applying pressure to the water when it is on one side of a membrane. Reverse osmosis involves a diffusive mechanism so that separation efficiency is dependent on solute concentration, pressure and water flux rate. The performance of a RO system is highly dependent upon the pretreatment of the raw water, because without proper pretreatment, membranes will become fouled and scaling may occur. Typically, a UF or NF system is recommended for pretreatment. Renew Strategies Renew Strategies Lost Creek Project 2-11

The Lost Creek Project water is easily treatable to Town s less than 500 mg/l TDS requirement. Two water treatment scenarios have been considered. In both treatment options, a portion of raw water would be blended with the treated water to achieve Castle Rock s water treatment goals. Because existing water quality goals in the ECCV pipeline (less than 350 mg/l TDS) and Aurora Prairie Waters/WISE system (assume TDS between 400 mg/l and 800 mg/l) may need to be matched, we considered a more stringent and a less stringent treatment goal than Castle Rock s less than 500 mg/l TDS requirement. This range of treatment will enable the Town to maintain flexibility in considering its overall water supply infrastructure. Treatment Option No. 1 Finished TDS of Less Than 350 mg/l The first treatment option would consist of three nanofiltration skids. Each skid would have an inlet flow of 665 gallons per minute (gpm), with a permeate flow of 532 gpm. The total permeate flow would be 1,596 gpm. Approximately 435 gpm of raw water would bypass the NF skids and blend with the permeate to produce a finished TDS of approximately 350 mg/l. Thus, the effluent flow from this system would be approximately 2,031 gpm (2.92 mgd). With this option, each skid would have a reject flow of 133 gpm, or a total of 399 gpm. This reject stream would be treated with a separate RO Skid. This RO system would produce a permeate stream of 259 gpm, that would blend with the finished water from the NF system. The RO system would produce 140 gpm of waste, which would be delivered to the WTP s evaporation ponds for disposal. The total finished water flow from Option No. 1 would be 2,290 gpm or 3.3 MGD (1,596 gpm from NF permeate, 435 gpm from bypass, and 259 gpm from RO permeate). Based on an influent flow of 3.5 mgd, Option No. 1 would produce approximately 6 percent waste. Figure 7 shows the preliminary process schematic for Option No. 1. Treatment Option No. 2 Finished TDS of Less Than 800 mg/l The second treatment option would consist of three nanofiltration skids. Each skid would have an inlet flow of 420 gallons per minute, with a permeate flow of 315 gpm. The total permeate flow would be 945 gpm. Approximately, 1,170 gpm of raw water would bypass the NF skids and blend with the permeate to produce a finished TDS of approximately 800 mg/l. Thus, the effluent flow from this system would be approximately 2,115 gpm (3.05 mgd). With this option, each skid would have a reject flow of 105 gpm, or a total of 315 gpm. This reject stream would be treated with a separate RO Skid. This RO system would produce a permeate stream of 252 gpm, that would blend with the finished water from NF system. The RO system would produce 63 gpm of waste, which would be sent to the WTP s evaporation ponds for disposal. The total finished water flow from Option No. 2 would be approximately 2,367 gpm or 3.41 mgd (945 gpm from NF permeate, 1,170 gpm from bypass, and 252 gpm from RO permeate). Based on an influent flow of 3.5 mgd, Option No. 2 would produce approximately 3 percent waste. Renew Strategies Renew Strategies Lost Creek Project 2-12

Figure 6 Overall Project Schematic Renew Str ategies S chedule 2-13

Figure 7 Water Treatment Plant Option No. 1 Finished Total Dissolved Solids of Less Than 350 mg/l Renew Strategies Schedule 2-14

Figure 8 Water Treatment Plant Option No. 2 Finished Total Dissolved Solids of Less Than 800 mg/l Renew Strategies Schedule 2-15

Evaporation Ponds Renew Strategies is currently planning the use of evaporation ponds for the disposal of waste from the RO process. The evaporation ponds will be lined to protect the local ground water from contamination. The amount of waste generated at the WTP will vary, depending on what level of treatment is required. It is anticipated the amount of waste generated at the WTP will be approximately 6 percent (200,000 gpd or 224 AF per year) for Option No. 1 and 3 percent (90,000 gpd or 101 AF per year) for Option No. 2. Evaporation rates are critical to the overall design of the evaporation pond, due to the direct impact on the overall pond size requirements. The net evaporation in the Lost Creek area is 35 inches per year (Colorado Division of Water Resources, CDSS Maps). As brine becomes more concentrated during the evaporation process, the rate of annual evaporation reduces. For conceptual design purposes, a 30 percent brine reduction factor in evaporation was used. For Option No. 1, based on a net evaporation of 24.5 inches per year, and 224 AF of brine that needs to be evaporated, an evaporation pond with a surface area of 110 acres would be required. For Option No. 2, based on a net evaporation of 24.5 inches per year, and 101 AF of brine that needs to be evaporated, an evaporation pond with a surface area of 50 acres would be required. Front Range Resources currently owns the proposed locations of the evaporation pond and the WTP on Figure 5. The size of the evaporation ponds could be reduced by installing an enhanced sprinkler evaporation system. By installing a sprinkler system within the evaporation ponds, the size of the ponds could be reduced by approximately 20 percent. Thus, approximately 88 acres would be needed for Option No. 1 and 40 acres would be needed for Option No. 2. Potential Alternatives for Use of the LCB Water that May Not Require Treatment Aurora Prairie Waters/WISE Well Field Option An additional option to be considered pertains to the delivery of the Lost Creek Water to the Aurora Prairie Waters/WISE system at the South Platte River. It may be possible to incorporate the water into an augmentation plan and use the water for substitution and exchange for other water, therefore the LCB would not need to be treated. If the Lost Creek Project water is introduced into the South Platte River either directly or through percolation out of a gravel pit through an augmentation plan, LCB water would not need to be treated. Fully developing this possibility may either mitigate all or a portion of the treatment requirement. The current Lost Creek Project proposal does not consider this alternative, but could be explored at the appropriate time. Chatfield Reservoir Storage Reallocation Option The U.S. Corps of Engineers is preparing a detailed Feasibility Report and Environmental Impact Statement to evaluate alternatives on Chatfield Reservoir storage. One of the alternatives under evaluation is reallocation of 20,600 AF of storage and another alternative reallocates 7,700 AF of storage. Castle Rock would obtain about 1,013 AF under the 20,600 AF alternative. Depending on the final alternative selected, there is a potential that Lost Creek water could be delivered by exchange to Chatfield when an exchange is available. This exchange operation could resolve calls from downstream reservoirs as well as work effectively with the Aurora Prairie Waters/WISE system. As discussed above, it may also eliminate the need to treat the water for TDS. Renew Strategies Renew Strategies Lost Creek Project 2-16

The Estimated Costs of the Proposed Water Treatment Plant The estimated costs of the two treatment processes are presented in Table 5. The attainment of Castle Rock s stated goal of having a TDS less than 500 mg/l will need to consider both evaluated treatment processes, as well as the delivery method to Castle Rock through either the ECCV or Aurora Prairie Waters pipelines. Calculating the cost to provide TDS less than 500 mg/l could be prorated between the two options in the following table. However, in the final analysis, the cost may need to take into account the costs through the Aurora/WISE or ECCV treatment process or through the two pipelines and eventual blending with other waters. The costs in the following table are based on using either a Design/Build or Construction Manager at Risk delivery method. Table 5 Water Treatment Estimated Capital Costs Item Option 1 TDS<350 mg/l Option 2 TDS<800 mg/l Construction Total $12,308,700 $9,703,000 Overhead and Profit $1,231,000 $970,000 Engineering $719,000 $598,000 Total Design/Build Cost $14,259,000 $11,271,000 Total Design/Build Cost per AF for Base Project $3,700 $2,900 Total Design/Build Cost per AF for Proposed Project $3,700 $2,900 The Proposed Lost Creek Project Conveyance System The Lost Creek Project will require the construction of a conveyance pipeline from of the LCB to either the Aurora Prairie Waters pipeline or the ECCV pipeline. Renew Strategies will work with Castle Rock to identify whether Aurora Prairie Waters or ECCV is the best delivery system and whether Castle Rock should obtain (additional) capacity in one or both of the two pipelines. Renew Strategies has designed the Lost Creek Project conveyance pipelines to the Aurora Prairie Waters and ECCV pipelines with a flow of 7.7 mgd or 5,350 gpm, which allows the Town to take advantage of the Banking Storage provision of the Lost Creek water rights. Current design locates the conveyance pipeline in roadway or section rights-of-way. The location of the LCB well field provides two potential delivery options to deliver water to Rueter Hess or a Master Meter at E-470 & South Chambers Road. One option is working with the Aurora Prairie Waters/WISE system to deliver water to the northern terminus of the Aurora Prairie Waters pipeline and, from there, into the Aurora treatment Regional Figure Infrastructure 9 Regional Infrastructure 25 DOUGLAS COUNTY Cheyenne Chatfield Reservoir Lost Creek Pipeline (Proposed) Prairie Waters Pipeline E-W Pipeline 25 WELD COUNTY 76 Lost Creek Basin Chambers Pipeline (Proposed) Rueter Hess Reservoir Rueter Hess Pipeline (Proposed) East Cherry Creek Valley Pipeline ADAMS COUNTY 70 ARAPAHOE COUNTY ELBERT COUNTY Sterling Lost Creek Well Field N South Adams County W & S District owns 1,200 AF of LCB water and may participate in the conveyance pipeline. Renew Strategies Renew Strategies Lost Creek Project 2-17

facility, then to the existing East-West pipeline and finally to Rueter Hess or the Master Meter. The other option is a system that utilizes Castle Rock s capacity in the ECCV pipeline to deliver the Lost Creek water to the East-West pipeline and then to Rueter Hess or the Master Meter. Either of these options outlined could be used as a first step in the development of the WISE system. Conveyance Pipeline Delivery Option No. 1 WISE/Prairie Waters Pipeline Delivery The Lost Creek Water complements the WISE system by using currently available infrastructure capacity to firm up water to be delivered by WISE. The Lost Creek water asset makes the WISE project even more consistent and reliable as a water supply for Castle Rock. The LCB s year-round pumping capabilities allow Castle Rock to take advantage of capacity in the WISE system during off-peak periods. Banking Storage further enhances Castle Rock s involvement with WISE. The water rights in LCB can both firm up the WISE water portfolio and support Castle Rock s Lost Creek Basin storage reduces Castle Rock s infrastructure costs. operational requirements. Castle Rock has made a significant investment in storage in Rueter-Hess Reservoir, which in combination with the Lost Creek storage and delivery system, would significantly leverage the benefits from the WISE system. Leveraging Lost Creek Banking Storage with Castle Rock s existing system would be preferable to other options available to the Town such as: (1) Drilling additional Denver Basin wells to provide water for periods of interruption for existing and long-term growth, and (2) Using Rueter-Hess solely to provide water for interruptions that may amount to several years, thereby, reducing the ability to use Rueter-Hess for annual operational efficiencies. Conveyance Pipeline Delivery Option No. 2 ECCV Water Delivery In the event Castle Rock considers delivery through the ECCV pipeline, Lost Creek Water could be delivered to that location. In addition, because Lost Creek Basin ground water is uniquely deliverable year-round, variable capacity available during off-peak months in the ECCV pipeline could be used at less cost than during peak pumping periods. By leveraging the LCB s year-round pumping capability, Castle Rock will be able to optimize its system from cost, operational and delivery perspectives. Additionally, the banking provision will also allow Castle Rock to optimize its cost, operations and delivery and reduce the infrastructure size that Castle Rock would need to provide peak flows to its end users. East-West Pipeline Delivery It is our understanding the WISE group is presently negotiating to acquire the East-West Pipeline located in the 470 corridor. Depending on the outcome of those negotiations, Renew Strategies would work with Castle Rock and the East-West Pipeline s owners to deliver the Lost Creek Water through that pipeline. Again, year-round pumping capabilities and the ability to bank the water in the LCB until capacity is available provides significant potential economic, as well as operational, benefits to Castle Rock. Renew Strategies Renew Strategies Lost Creek Project 2-18

The Estimated Costs of the Proposed Delivery System To evaluate the potential delivery methods through either the Aurora Prairie Water pipeline or the ECCV pipeline, Renew Strategies considered the two delivery locations discussed above. Estimated costs for these two options are presented in Table 6 and are based on using either a Design/Build or Construction Manager at Risk delivery method. Table 6 Conveyance Pipeline Estimated Capital Costs Option 2 Item Option 1 (Delivery to Aurora/WISE) (Delivery to ECCV) Construction Total $13,998,000 $12,988,000 Overhead and Profit $1,400,000 $1,299,000 Engineering $764,000 $708,000 Total Design/Build Cost $16,162,000 $14,995,000 Total Design/Build Cost per AF for Base Project $4,200 $3,900 Total Design/Build Cost per AF for Proposed Project $4,620 $4,290 Total Lost Creek Project Cost Alternatives for Lost Creek Infrastructure and Delivery to Castle Rock In order to look at project alternatives that will fit the Town s overall objectives, we have combined all of the above infrastructure components wells, collection system, treatment and conveyance pipelines into three alternatives, as follows:» Alternative 1 - Water delivered to ECCV pipeline with a TDS less than 350 mg/l» Alternative 2 - Water delivered to Aurora/WISE with a TDS less than 350 mg/l» Alternative 3 - Water delivered to Aurora/WISE with a TDS less than 800 mg/l Alternative 1 would enable Castle Rock the ability to use the 1.4 mgd capacity that has been acquired in the ECCV pipeline. The year-round pumping capabilities and Banking Storage available with Lost Creek Water would then enable Castle Rock the ability to utilize variable off-peak capacity, which is priced less than firm capacity in the pipeline. Alternatives 2 and 3 both deliver water to the Aurora/WISE system with different TDS quality being the only variable. The year-round pumping capabilities and Banking Storage available with Lost Creek Water would then enable Castle Rock the ability to utilize variable off-peak capacity. The range of TDS for water delivered into Aurora s Prairie Waters system may be between 350 to 800 mg/l, depending on the time of year. The difference in quality is attributable to runoff conditions in the South Platte River. Renew Strategies Renew Strategies Lost Creek Project 2-19

Table 7 Infrastructure Capital Cost for 6,000 AF 1 Item Alternative 1 Delivery to ECCV TDS<350 mg/l Alternative 2 Delivery to Aurora/ WISE TDS<350 mg/l Alternative 3 Delivery to Aurora/ WISE TDS<800 mg/l Wells Design/Build Cost $9,000,000 $9,000,000 $9,000,000 Collection System Design/Build Cost $16,500,000 $16,500,000 $16,500,000 Water Treatment Design/Build Cost $22,200,000 $22,200,000 $17,400,000 Conveyance Design/Build Cost $25,740,000 $27,720,000 $27,720,000 Total Design/Build Cost $73,440,000 75,420,000 $70,620,000 Total Design/Build Cost per AF $12,240 $12,570 $11,770 1 Based on per AF unit costs developed for a 3,886 AF project. Costs are conservative because of efficiencies in a larger project. Estimated Costs of the Southern Delivery Infrastructure Options In addition to the Lost Creek Project costs shown in Table 7, Castle Rock will also need to participate in either the ECCV or Aurora/WISE systems to deliver the water to a master meter at E-470 and South Chambers Road or Rueter-Hess Reservoir. Because there are ongoing discussions with participants in the Chambers Pipeline about allocation among the participants, Renew Strategies estimated the cost of delivery to the master meter location at E-470 and South Chambers Road.» Aurora/WISE System Similar to the ECCV costs discussed in Table 9, Renew Strategies has a general understanding of the costs for delivering the Lost Creek Water from the southern terminus of the Aurora Prairie Waters pipeline to the master meter at E-470 and South Chambers Road. Final costs numbers will be the subject of negotiations; however, having the flexibility of Banking Storage and year-round pumping that the LCB water provides would allow the use of off-peak capacity anytime it is available. Although negotiations are not yet complete, the cost for Castle Rock s use of the East-West pipeline along the 470 corridor was estimated by assuming the Town would pay 30 percent of South Metro s costs for the use of the East-West pipeline. The total capital costs for the East-West pipeline are estimated to be approximately $50,000,000. South Metro s estimated costs for the use of the East-West pipeline would then be around $16,700,000 (approximately one-third of the total capital costs, if Aurora and Denver pay the other two-thirds). As shown in Table 8, Castle Rock s 30 percent of the East-West line is estimated to be around $5,010,000. In addition, we understand there may be costs to South Metro to connect to the WISE system. Table 8 shows the potential costs to South Metro and what the Town s obligation may be at 30 percent participation. Table 8 Estimated Capital Cost to Participate in WISE and Deliver Water to Master Meter Castle Rock Item South Metro Cost Participation Castle Rock Cost East-West Pipeline $16,700,000 30% $5,010,000 WISE Connection $16,000,000 30% $4,800,000 Temporary Connection $420,000 30% $126,000 Permanent Connection $35,000,000 30% $10,500,000 TOTAL SOUTHERN DELIVERY COST $20,436,000 1 1 The capital cost to carry Castle Rock s 6,000 AF of water through the Aurora Prairie Waters pipeline is not included in the estimated costs above because Renew Strategies understanding is that the WISE group has, to date, only explored costs based on delivery per 1,000 gallons. Renew Strategies also understands that WISE participants will be able to use capacity in the Aurora Prairie Waters pipeline when it is not being used by Aurora and Denver. Renew Strategies Renew Strategies Lost Creek Project 2-20

» ECCV The costs presented in this section are primarily based on the costs identified in the Intergovernmental Agreement between Arapahoe County Water and Wastewater Authority, et al, December 15, 2009. Presently, Castle Rock owns 1.4 mgd of firm capacity in the ECCV Northern Pipeline. This amount of capacity would deliver about 1,500 AF per year. We are also assuming Castle Rock already has accounted for the cost to deliver this 1,500 AF to the master meter at E-470 and South Chambers Road. Therefore, Renew Strategies estimates below do not include the costs of delivery of this 1,500 AF from the southern terminus of the Aurora Prairie Waters or ECCV pipelines to the master meter at E-470 and South Chambers Road. One of the key negotiation items that Lost Creek Water provides in connection with obtaining space in the ECCV or Aurora Prairie Waters pipelines, is that the Lost Creek Water offers year-round delivery capabilities, and its Banking Storage provisions allow Castle Rock to take full advantage of variable, or off-peak, pricing in the ECCV pipeline. Variable pricing for the ECCV Northern Pipeline was discussed in the SMWSA, Mid-Term Water Delivery Project Plan, July 2008. By using the off peak prices in that report, Castle Rock may be able to save approximately 50 percent off the peak capacity costs to deliver water through the ECCV pipeline. To be compatible with the Lost Creek Project operational plan of uniform delivery throughout the year, costs in the table below used the costs identified in the ACWWA Intergovernmental Agreement, which were then prorated for a uniform annual delivery to meet the Town s objectives. The following table shows the additional costs for the Town to deliver the remaining 4,500 AF through the ECCV pipeline to the master meter at E-470 and South Chambers Road. 4,500 AF is the remaining amount to be delivered after the 1.4 mgd/1,500 AF referenced above is delivered. For estimating purposes, Renew Strategies assumed the Town would need to acquire an additional 4 mgd in the ECCV pipeline to deliver the 4,500 AF of water. The capacity in the East-West Pipeline is discussed above, and a cost of $5,010,000 was estimated to be the Town s obligation. Table 9 Estimated Capital Cost to Deliver 4 mgd/4,500 AF/Year 3 At the Master Meter through the ECCV System Intergovernmental Agreement Item Cost Cost for 4 mgd Northern Transmission Line Capacity 1 $5,250,000 for 3.5 mgd $6,000,000 Northern Transmission Line Pumping $3,375,000 for 2.25 mgd $6,000,000 Capacity 1 Water Treatment Plant 1 $7,320,000 for 2.25 mgd $13,013,000 Brine Disposal 1 $2,500,000 for 4,400 AF/Year $3,400,000 East- West Line Capacity 2 $5,010,000 TOTAL SOUTHERN DELIVERY COST $33,423,000 1 Based on costs identified in Intergovernmental Agreement. 2 Based on understanding of WISE negotiations to determine Town s obligation. 3 Note: These costs are very conceptual and only reflect what has been made public. There may be additional considerations we are not aware of which could either reduce or increase the costs in the above table. Renew Strategies Renew Strategies Lost Creek Project 2-21

Summary of Project Attributes and Benefits The Lost Creek Water has numerous positive attributes that make it an unique and a reliable municipal water supply.» The Lost Creek Water is a renewable water supply as demonstrated by more than 50 years of data from the Lost Creek Designated Basin;» The Lost Creek Water allows for year-round pumping, which means Castle Rock does not need to purchase storage north of the north end of the Aurora Prairie Waters or ECCV pipelines;» Castle Rock does not need to purchase firming storage for the Lost Creek Water because the Lost Creek Water can be stored for up to approximately three years in the LCB;» Castle Rock may export the Lost Creek Water for municipal purposes and use and reuse the water until it is fully consumed;» The Lost Creek Water is managed to enhance sustainability of the water supply and the Lost Creek aquifer, i.e. including no new large-capacity well permits have been issued in the past 40 years or will be issued in the future;» The Lost Creek Water is protected by Colorado Law, Senate Bill 10-052, which protects designated basins such as the Lost Creek Designated Basin, from de-designation;» 3,886 acre feet of Lost Creek Water has been adjudicated for municipal use and approved for export which significantly reduces Castle Rock s risk related to locating, purchasing and adjudicating its water supply;» The remaining 2,114 acre feet needed by Castle Rock to reach its 6,000 acre foot goal will be acquired and adjudicated for municipal use before Castle Rock has any obligation to purchase the water, which reduces Castle Rock s financial and other risks relating to the purchase of water;» The Lost Creek Water is a firm yield supply 100 percent of the Lost Creek Water is available each year it is not a 60 percent average-year yield water supply;» The infrastructure to deliver the Lost Creek Water to the delivery points includes all the infrastructure necessary to deliver the water;» The Lost Creek Water does not require augmentation or, more importantly, the significant costs incurred when augmentation is required;» The delivery of the Lost Creek Water does not require exchanges in either the South Platte River or tributaries of the South Platte River to be successful which significantly reduces Castle Rock s financial, delivery and operational risks;» Because the Lost Creek Water does not require exchanges, augmentation, storage and/or temporary supply plans, Castle Rock s risks are reduced significantly from a delivery, operational and financial standpoint;» The Lost Creek Water provides Castle Rock the flexibility to deliver water to the Rueter-Hess Reservoir when Castle Rock wants to deliver water to the reservoir;» Castle Rock will own the Lost Creek Water which allows it to control the resource so vital to its community and citizens; and» At the time of designation of the LCB in the 1960s, the LCB alluvial aquifer was estimated to contain 1.3 million AF. Recent studies show the LCB alluvial aquifer may contain up to 2 million AF. Renew Strategies Renew Strategies Lost Creek Project 2-22

3.0 Project Schedule The present timeline outlined in the RFP is for the Town of Castle Rock to enter into negotiations with successful bidders during October 2011. Renew Strategies understands this and other dates may change based on the Town s needs. However, regardless of the final Notice to Proceed date, Renew will work with the Town s staff to meet the Town s schedule as it is developed. For the purpose of showing an illustrative schedule, we have assumed that a Notice to Proceed will be issued by November 1, 2011. The important observation from the schedule below is that there is some leeway and Renew Strategies can meet the Town s stated objective to have the initial tranche of water delivered to Castle Rock by 2017 (or sooner, if necessary). There are two main activities shown within the Illustrative Schedule shown in Figure 10. Tasks 2 through 6 focus on acquiring and changing the use for the additional 2,114 AF of water required by the Town, in addition to the initial 3,886 AF controlled by Renew Strategies. The schedule shows that this acquisition and change process will take about 21 months from start to completion. We have, as a Team, previously acquired water and gone through numerous change-of-use processes in a similar time frame. The second main group of tasks starting with Task 7 relate to the design and construction of facilities in and outside of the Lost Creek Basin. As is shown by the chart, design and construction is estimated to take approximately 35 months. However, utilizing an aggressive design-build process could shorten this time frame by as much as one year. The Team has already developed a preliminary design for the LCB infrastructure and is thus prepared to move forward with the final design and construction process. Renew Strategies understands the final design will be based upon discussions with and criteria from Castle Rock. 3.0 Renew Strategies Renew Strategies Schedule 3-1

Figure 10 Illustrative Schedule ID Task Name Duration (days) Start Finish 1 Notice to Proceed 0 11/1/11 11/1/11 2 Acquisition of 2,114 AF of LCB water 180 11/2/11 7/10/12 3 Change-of-use engineering 197 2/1/12 11/1/12 4 Final Ground Water Commission Ruling 0 2/14/13 2/14/13 5 LCB Export review 60 4/1/13 6/21/13 6 Export approval 0 7/29/13 7/29/13 7 Establish design criteria with Town 0 11/1/11 11/1/11 8 Conveyance design out of LCB 113 1/2/12 6/6/12 9 Conveyance construction 499 8/1/12 6/30/14 10 Well/Collection Design 200 2/1/12 11/6/12 11 Well/Collection construction 429 11/7/12 6/30/14 12 Water treatment plant design 150 1/2/12 7/27/12 13 Water treatment plant construction 501 7/30/12 6/30/14 2011 2012 2013 2014 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 11/1 u 14 Water delivered 0 8/1/14 8/1/14 u 11/1 u 2/14 u u 7/29 8/1 Renew Strategies Schedule 3-2

4.0 Financial Capacity Confidential 4.0 RENEW STRATEGIES Renew Strategies Financial Capacity 4-1

5.0 Permitting And Environmental We anticipate the Lost Creek Basin water will be delivered to Castle Rock by use of pipelines constructed in the LCB for delivery of water to several possible locations. Until the final route for the pipelines is completed, all of the 5.0 Renew Strategies legal issues pertaining to the pipelines cannot be specified. However, based on the rural location of the LCB,it is reasonable to expect that all required permits can be obtained. The following Permitting Matrix details the permits that we anticipate obtaining for this project. The wells associated with the Lost Creek Basin water rights were originally constructed for use as agricultural irrigation water supply. We anticipate the wells will be rehabilitated and/or replaced as part of development of the water conveyance system to Castle Rock. The Colorado Ground Water Act, Section 37-90-101, et seq., C.R.S., expressly provides for construction of replacement wells, which are defined as a new well which replaces an existing well and which shall be limited to the yield of the original well and shall take the date of priority of the original well, which shall be abandoned upon completion of the new well (see Section 37-90-103(13), C.R.S.). Pursuant to the Rules And Regulations For The Management And Control Of Designated Ground Water, 2 CCR 410-1 ( Ground Water Rules ), a replacement well shall be limited to the same terms and conditions as the original well permit (see 2 CCR 410-1, Rule 6.7). The Regulations For The Use, Control And Conservation Of Ground Water Within The Lost Creek Ground Water Management District ( District Rules ) also provide that issuance of a replacement well permit should be automatic, and the replacement well must be located within 100 feet of the original wells (see Designated Basin Rule 5). To the extent replacement well permits are required to replace any of the wells in question, we anticipate that the replacement well permits will be issued in accordance with the Ground Water Rules and the District Rules. For each of the wells, Front Range owns an easement for the well and replacement well, and an easement for pipelines, powerlines and access to the wells. The pipeline easements generally provide a route for water delivery pipelines from the well to a public road. We anticipate that to the extent the pipelines follow public roads, the pipelines will be installed within or adjacent to the easement for the public roads. A right-of-way permit will be required from the Colorado Highway Department or applicable county controlling the road, for the installation of the pipelines (State Highway Utility Accommodation Code, 2 CCR 601-18). We do not anticipate any significant issues associated with obtaining the right-of-way permit for the pipelines in or adjacent to public roads. To the extent a water delivery pipeline crosses county boundaries, the county may determine that it is a matter of state interest (see Section 24-65.1-101, C.R.S.). If a determination is made that the pipeline is a matter of state interest, a permit for construction of the pipeline is required, which is commonly known as a 1041 permit (see, Weld County Code, Section 21-1-10, et seq.; Adams County Development Standards and Regulations, Chapter 6; and Regulations Governing Areas And Activities Of State Interest In Arapahoe County). We anticipate that a 1041 permit will be required for any pipelines to be constructed. We do not anticipate any significant permitting requirements with respect to the laws of the United States. The primary permitting requirement with respect to the laws of the United States will pertain to pipeline locations that cross areas defined as wetlands. Wetlands are defined as follows according to 33 C.F.R. 328.3(b): Areas that are inundated or saturated by surface or groundwater at a frequency and duration sufficient to support, and that under normal circumstances do support, a prevalence of vegetation typically adapted for life in saturated soil conditions. The pipeline routes may result in crossing streams or other areas that may be considered wetlands. Permits for crossing wetlands areas are issued by the United States Army Corps of Engineers, and are commonly known as 404 permits. The Corps of Engineers recognizes that certain activities in wetlands areas should be permitted to proceed without issuance of an individual permit, and such activities are included within Nationwide Permits. Activities included within the Nationwide Permit include activities Renew Strategies Permitting And Environmental 5-1

Table 13 Permitting and Consultation Matrix for the Lost Creek Project Agency Permit / Consultation Estimated Time to Submit Application Federal U.S. Army Corps of Engineers 404 Permit 2 months 5 months Pipeline Design U.S. Department of Interior 1 month 1 month All project components Design Consultation and due diligence under the Endangered Species Act, the Migratory Bird Treaty Act of 1918 Estimated Time to Obtain Approval Project Component Project Phase Comments State Colorado Office of Archaeology and Historic Preservation (SHPO) Informal Consultation 1 month 1 month All project components Design Colorado Department of Public Health and Environment (CDPHE) Public Water System Requirements (Safe Drinking Water Act) 3 months 6 months Water Treatment Facility, Potable Wells, Pipeline, Pump Stations Construction Approval 6 months 6 months Water Treatment Facility, Potable Wells, Design Pipeline, Pump Stations Plan and Specification Approval 6 months 6 months Water Treatment Facility, Potable Wells, Design Pipeline, Pump Stations Monitoring Plan 1 month 6 months Water Treatment Facility, Potable Wells, Design / Operation Pipeline, Pump Stations Stormwater Construction Permit and related Stormwater 1 month 1 month Water Treatment Facility / Pipeline Design / Construction Management Plan (SWMP) Construction Dewatering Permit 1 month 1 month Water Treatment Facility Design Colorado Department of Transportation (CDOT) Special Use / Utility Permit 1 month 1 month Pipeline Construction Required for construction activities in state highway ROW Colorado Division of Wildlife State Endangered Species Consultation 1 month 1 month All project components Colorado Groundwater Commission Change of Use Permits 3 months 6 months Water Rights Design Already Completed for 3886 AF Lost Creek Groundwater Management District Export Approval 1 month 2 months Water Rights Design Already Completed for 3886 AF Colorado Division of Water Resources, Office of the State Engineer Permit approval for drilling new wells, if needed 1 week 2 months Potable Wells Design Local Weld County 1041 and/or Conditional Use Permit 3 months 6 months Design Building Permits / Certificate of Occupancy 1 month 1 month Pump houses, Water Treatment Facility Construction Grading Permit 1 month 1 month Water Treatment Facility Construction Erosion and Sediment Control Permit 1 month 1 month Water Treatment Facility Construction ROW Permits 3 months 6 months Pipeline Design / Construction Coordination regarding such things as weed control plan, spill 1 month 1 month Pump houses, Water Treatment Facility Design / Construction prevention, etc. Consultation with Fire Protection District 1 month 3 months Pump houses, Water Treatment Facility Design / Construction Renew Strategies Permitting And Environmental 5-2

required for the construction, maintenance, repair, and removal of utility lines and associated facilities in waters of the United States, provided the activity does not result in the loss of greater than 1 2-acre of waters of the United States (see Federal Register, February 16, 2011, page 9190, Exemption 12). A utility line is defined as any pipe or pipeline for the transportation of any gaseous, liquid, liquefiable, or slurry substance, for any purpose, and any cable, line, or wire for the transmission for any purpose of electrical energy, telephone and telegraph messages, and radio and television communication (see 33 C.F.R. 330.5(a)(12). The construction activity must also not adversely affect the water body or other interests in the watercourse (see 33 C.F.R. 330.5(b) and 330.6). If a project meets the requirements of the Nationwide Permit, no actual permit would be required from the Corps of Engineers. In addition, if the project meets the requirements of the Nationwide Permit, no permits will be required from the State of Colorado Water Quality Control Division (see Section 25-8-302(1)(f) and 5 C.C.R. 1002-18 Section 2.4.2). Although it will be necessary to evaluate the specific pipeline route, we anticipate the proposed pipelines would meet the requirements of the Nationwide Permit and no individual permit would be required. It is also important to recognize that if a particular pipeline route does not meet the requirements of the Nationwide Permit, an alternative route may be developed which meets the requirements of the Nationwide Permit. The Colorado Water Quality Control Division has also promulgated the Colorado Primary Drinking Water Regulations, (see 5 CCR 1003-1). Prior to constructing any new water works, it is necessary to submit the plans for construction to the Water Quality Control Division. The Water Quality Control Division shall review and comment on the proposed plans within 45 days after submission. We anticipate any pipelines and pumping facilities will require the approval of the Water Quality Control Division. Since the pipeline will not be installed on federal land and there will not be a significant effect on the quality of the human environment, we do not anticipate there will be any need for preparation of an Environmental Impact Statement. Environmental Impact Statements are required where there is major federal action, such as constructing a reservoir on federal land, and the permission of the United States is required, or where the proposed action will result in a significant effect on the human environment. q Renew Strategies Permitting And Environmental 5-3

6.0 Cost Proposal Water Rights 6.0 Renew Strategies Renew Strategies proposes selling Castle Rock the 6,000 AF in two tranches. The first tranche is the 3,886 AF Renew Strategies currently has available for export from the Lost Creek Basin. Renew Strategies proposes this 3,886 AF will be purchased for $23,000 per AF in 2012. The remaining 2,114 AF of Lost Creek Water will be available after it has been adjudicated and approved for export. Renew Strategies proposes that the remaining 2,114 AF be purchased in 2015 for $24,000 per AF. By purchasing the water early in the process, Castle Rock will ensure their future renewable water supplies are acquired and not subject to future risks and price escalation. Castle Rock would then have the benefit of constructing the infrastructure to deliver the water in a manner that would best fit the Town s needs. For instance, the Town may decide that by using the Banking Storage provision available for Lost Creek Water, they are able to meet the interruptible WISE operations such that some initial infrastructure prior to 2017 is all they need until after 2025. Infrastructure The infrastructure alternatives described in Section 2.0 to deliver water from the LCB to the northern terminus of either the Aurora Prairie Waters or ECCV pipelines are as follows:» Water delivered to ECCV pipeline with a TDS less than 350 mg/l» Water delivered to Aurora/WISE with a TDS less than 350 mg/l» Water delivered to Aurora/WISE with a TDS less than 800 mg/l Table 14 Infrastructure Capital Cost for 6,000 AF 1 Alternative 2 Delivery to Aurora/WISE TDS<350 mg/l Alternative 3 Delivery to Aurora/WISE TDS<800 mg/l Alternative 1 Delivery to ECCV Item TDS<350 mg/l Total Design/Build Cost $73,440,000 $75,420,000 $70,620,000 Total Design/Build Cost per AF $12,240 $12,570 $11,770 1 Based on per AF unit costs developed for a 3,886 AF project. The per unit costs above are conservative because of efficiencies generated on a larger project. As discussed in Section 2.0, in addition to the above Lost Creek Project costs, there will be additional costs to deliver water either through the Aurora/WISE Prairie Waters System or through the ECCV Pipeline. These costs are estimated to range from $20,436,000 to $33,423,000. Annual Operation, Maintenance and Management Budget Annual budgets were considered for the three water delivery alternatives discussed above. The water treatment plant budget includes power (at $0.06/kwh), acid feed, antiscalant, prefilters, membranes and cleaning. Renew Strategies Cost Proposal 6-1

Table 15 Annual Budget Based on 3,886 AF Item Alternative 1 Delivery to ECCV TDS<350 mg/l Alternative 2 Delivery to Aurora/WISE TDS<350 mg/l Alternative 3 Delivery to Aurora/WISE TDS<800 mg/l Water treatment plant $452,000 $452,000 $302,000 Well pumps $68,000 $68,000 $68,000 Conveyance pipeline pumps $303,000 $280,000 $280,000 Structures power1 $33,000 $33,000 $33,000 Infrastructure maintenance2 $200,000 $200,000 $200,000 Contract operations $150,000 $150,000 $150,000 Equipment reserve fund $90,000 $90,000 $90,000 Total O&M $1,296,000 $1,273,000 $1,123,000 District Management $100,000 $100,000 $100,000 Total O&M and Management $1,396,000 $1,373,000 $1,223,000 Total O&M and Management $ per AF $359 $353 $315 1 1995 Commercial Buildings delivered energy end-use intensities by building activity (103 Btu/sq. ft.) 2 1 percent of initial capital cost on equipment, buildings and infrastructure. 0.5 percent for piping and appurtenances. Proposed Town of Castle Rock Financing Plan Description This Proposal and the Appendix, Financial Models and Supporting Information, provide three financing scenarios for water rights acquisition in 2012 and 2015, and the first phase of infrastructure financing in 2017. All three scenarios assume annual growth in assessed valuation of four percent and one percent in reassessment and non-reassessment years, respectively beginning in 2013 and leveling off in 2026 per rating agency structuring guidelines. The first scenario, or Base Case financing scenario, assumes a 35-year traditional fixed-rate certificate of participation issue (COP), sold in July of 2012 with six months of capitalized interest such that the COP issue is self-supporting until calendar year 2013. The Base Case also assumes level annual COP payments and current market interest rates. The true interest cost for this traditional fixed-rate financing alternative is approximately 4.70 percent in the current market. The second financing scenario assumes variable rate COPs, also structured over a 35-year year term with level annual payments. The detailed debt service schedules in the Appendix assume an average variable rate of 2.65 percent which is the 20-year historic average for the SIFMA variable rate index, a widely published index comprised of a basket of highly rated tax-exempt variable rate bond issues. In addition, this financing scenario assumes 100 basis points for variable rate support costs either in the form of a direct pay letter of credit with a bank, or in the form of a credit spread for a privately placed variable rate index note. Together the 20-year historic average variable interest rate and assumed support costs produce a cost of capital of 3.65 percent. It is worth noting that current market variable rates are significantly lower than the assumed historic average. In today s market, variable rate financing offers an all-in borrowing cost of approximately one percent, but for planning purposes and debt service projections we have instead assumed the historic average rate for tax-exempt variable rates and support costs. Variable rate financing offers a lower expected borrowing cost than traditional fixed-rate debt and unparalleled flexibility to prepay and/or restructure debt as needed. The third financing scenario contemplates a synthetic fixed-rate COP offering that would include the issuance of variable rate COPs and the execution of a long-dated interest rate swap. Under this approach, the Town would issue variable rate COPs in 2012, 2015 and 2017 and would swap the variable rate to a fixed rate for the life of the financing to remove interest risk and lock in a lower fixed rate than Renew Strategies Cost Proposal 6-2

is available in the traditional fixed-rate municipal market. The LIBOR swap market offers lower fixed rates by virtue of its size and close relationship with the US Treasury market. Under this approach, the Town could lock-in an all-in borrowing cost of as low as 3.25 percent for 35 years and could also hedge against future increases in interest rates by locking in a rate on the 2015 and 2017 proposed borrowing in 2012 for a small premium. There are various risks associated with synthetic fixed-rate financing including tax risk, basis risk and counterparty risk. Additional information on this financing alternative, its benefits and risks, and risk mitigation techniques are available upon request. Renew Strategies Cost Proposal 6-3

Key Personnel Thomas J. Di Rito Education BFA, Architecture, University of New Mexico Key Qualifications Mr. Di Rito is the Director of Development for Renew Strategies and brings more than 35 years of successful residential and commercial real estate development experience including land acquisition, planning, zoning, engineering, budgeting, development, marketing and sales in six western states. He has extensive experience in: Planning, development, marketing and sales of planned communities and in the formation and administration of Metropolitan Districts (Past Board Member) Profit and loss responsibility/accountability on a statewide basis Real estate analysis with a strong educational background and practical experience in surveying, engineering, architecture, land planning, project management and control. Professional Experience Director of Development JF Companies and Partner, Gateway American Properties. Responsible for managing a staff of six in Denver, Colorado and Scottsdale, Arizona. Directed planning, engineering, municipal liaison, bidding, scheduling, cost control and development for properties throughout the Metropolitan Areas of Denver, Colorado and Phoenix, Arizona including three planned communities ranging in size from 1,200 acres to more than 5,600 acres. Accountable for lot profitability and cash flow. Development liaison to multiple metropolitan districts in the Denver Metropolitan Area. Director of Land Operations, Kaufman & Broad of Colorado, Inc. Responsible for managing a staff of eight. Mr. Di Rito established the Land Development Department for the Colorado Division and directed land acquisitions, due diligence, platting and development and was responsible for Division profit and loss for the Colorado Division. Vice President of Development, Richland Homes. Responsible for managing a staff of four. Mr. Di Rito directed planning, engineering, municipal liaison, bidding, scheduling and development of 15 properties located in nine municipalities throughout Colorado. He also was responsible for all lot profitability and construction cash flow requirements for the company. Senior Account Officer, Owned Real Estate Division, Federal Deposit Insurance Corporation. Mr. Di Rito managed and sold more than $103 Million of undeveloped land, developed lots and income producing properties (hotels, shopping centers, apartment complexes, etc.) while producing 25 to 50 percent of the annual sales generated by the Denver Consolidated Office during a three-year period. He created the reporting systems utilized in the management and sales of all real estate in the Denver Consolidated Office. Vice President and Real Estate Owned Department Manager, American Savings of Colorado. Mr. Di Rito was responsible for the marketing, negotiations and sales of undeveloped land, developed lots and income producing properties totaling more than $100 million. He successfully sold more than $30 million of the portfolio in just 18 months. Development Engineer/State Development Manager (Oklahoma, Colorado and New Mexico), Bellamah Community Development (BCD). Mr. Di Rito was employed by BCD for more than 13 years. His responsibilities and accomplishments included coordination of all land acquisition, land planning, zoning, platting, engineering, construction, cost control and profit and loss responsibilities for all corporate land holdings in the states of Colorado and Oklahoma. He directed the platting

and engineering of a 1,900-acre Master Planned Community in Douglas County, Colorado, including State approval of a highway interchange with Interstate 25. He assisted in the formation of and served on the Board of Directors of a Metropolitan District in Douglas County, Colorado and administered the construction, operation and maintenance of domestic water and sanitary sewer systems and roadways within that Master Planned Community. He directed planning, zoning, engineering, project cost control, financing, government liaison and development and sales of an 1,800-acre planned community in Tulsa, Oklahoma and for a 1,700-acre planned community in Albuquerque, New Mexico. Professional Achievements & Honors Board Member, Highlands Ranch Veterans Monument Committee Past Board Member, Highlands Ranch Architectural Committee Recipient of the Federal Deposit Insurance Corporation Directors Award for Special Achievement Graduate of the Dale Carnegie Course in Effective Speaking and Human Relations Certified Inspector, Colorado Department of Transportation Erosion Control and Stormwater Quality

Key Personnel W.V. Jack Hibbert Education MBA, University of Colorado at Denver MS, Civil Engineering, Colorado State University BS, Civil Engineering, Colorado State University Professional Registrations Professional Engineer, Colorado Key Qualifications Mr. Hibbert brings more than 40 years of experience in the development of creative approaches to solving complex water resource problems for public and private organizations. His breadth of experience with municipal, state, and federal agencies provides an outstanding perspective on water resource planning, development, management and operations. In his various capacities, Mr. Hibbert has: Worked extensively in facility and regional water quality planning, water rights, development of watershed programs, with citizens and governmental agencies. Provided project management and technical assistance in all functional areas of water resources. Provided specific technical experience in the areas of water rights evaluations, water supply and demand studies, watershed planning, hydrology, water quality modeling, computer simulation modeling, ground water modeling, and optimization techniques. Professional Experience Water Rights Program for JF Companies. Responsible for the negotiation, acquisition and change of use on nearly 4,000 AF of water and the management of nearly 8,000 AF of water. The water rights were located in the Lost Creek Designated Basin and were historically used for irrigation. Developed specific criteria for acquisition of water that maximized the overall benefits of a comprehensive water rights portfolio. Directed the development of a comprehensive master plan for a 10,000-unit development and received Weld County approval of the water plan. Water Rights Program for Coors Brewing Company. Responsible for all planning, management and development of raw water resource systems. This included protection of the quantity and quality of the product, process and cooling water systems. Projects included studies of the historic consumptive use of senior water rights to determine value for replacement of depletions by junior water rights. Developed water rights exchange program that resolved years of negotiation on Clear Creek. Responsible for negotiations and acquisition of water rights and incorporation into overall water rights portfolio. Created computerized system of accounting to keep track of depletions, return flow credits, and replacement water sources for incorporation into court approved augmentation plan. Integrated Water Resource Plan for the City of Aurora. Participated in the planning study to identify and evaluate the water resource options available for the city to increase their firm yield for significant planned growth. Study considered various water demand scenarios for the next 50 years and the impact various levels of water conservation may have on the demands. Project yields were determined based on previous evaluations from different sources with capital and operating costs updated to provide a comparison base. Development of evaluation criteria and use of Criterium Decision Plus (CDP) permitted evaluation and prioritization of individual supply projects. The specific projects were then incorporated into project portfolios that met the demand requirements of the city over the next 50 years and the portfolio of projects were subsequently evaluated using CDP. Recommendations included a long-term capital improvement plan to meet city s raw water supply needs. Regional Water Supply Study Group Needs Assessment for Newport News Waterworks, Virginia. Participated in the planning study to evaluate the future water needs of the regional water providers incorporating risk analysis techniques. The project included understanding and implementing a Newport News water resource model for evaluating the drought frequency and identifying yields during droughts of

records, analyzing system losses, identifying safe yields of wells, analyzing risk of ground water availability and establishing risk of safe yield as defined by the State of Virginia. The development of a probability approach to quantify the risk of future water shortages was instrumental in enabling a proposed reservoir project to proceed through the 404 regulatory process. Raw Water Master Delivery Project for Town of Erie, Colorado. Involved the fast-track implementation of raw water supply improvements to the town s water system. Due to rapid growth in the Town s service area, the project had to be completed nine months from initiation. Phase I of the project involved defining the project facilities required to meet the town s future needs, including development of a water master plan to ensure the new facilities were consistent with the town s key long-term water needs. Phase II of the project involved design/construction of the identified water facilities. Comprehensive Water Master Plan for City of Westminster, Colorado. Project manager for major treated water master planning study. This project included the development of an innovative interface between a hydraulic distribution system model and a geographic information system database. Water demands were determined based on future land use projections. Treated water alternatives, including treatment plants, conveyance systems and distribution systems were evaluated to determine the optimal system. Denver Metropolitan Water Study for Denver Regional Council of Governments, Colorado. Involved in a regional water study to evaluate adequacy of long-term water supplies of water agencies in the Denver Metropolitan area and their capability to provide adequate water service. Evaluation included projected water demands from growth in the municipal, commercial and residential sectors and the identification necessary additional water requirements to serve the future growth. Evaluation also included a review of the delivery and transmission facilities of each agency. 208 Areawide Water Quality Plan for Denver Regional Council of Governments. Participated in a water quality planning study requiring extensive public, governmental agency, wastewater facility manager and policy maker involvement. Study developed criteria to provide for ongoing water quality management on a watershed basis. Project identified institutional relationships, attainable beneficial uses and facility requirements. Watershed Computer Simulation Model for Denver Water, Colorado. Developed computer simulation model to optimize extensive system of tunnels, reservoirs, and pumps for water delivery to the Denver Metropolitan area. The model included utilization of stochastic virgin flows in the Colorado River and incorporated operational constraints to develop potential divertable flows under various operating conditions.

Key Personnel Margaret Medellin Education MS, Civil Engineering, Texas Tech University BS, Civil Engineering, Texas Tech University Professional Registrations Professional Engineer, Colorado Key Qualifications Ms. Medellin is the Vice President of Water Resources Development for Renew Strategies. She received her BSCE and MSCE degrees from Texas Tech University. Her graduate study of constructed wetlands for treating wastewater was funded by the Pantex Nuclear Facility. She has worked as a consultant engineer on various projects ranging from hydraulic design, hydrology studies, water and wastewater treatment analysis, and master plans for municipal water supply and demand. Ms. Medellin s current responsibilities include developing water resources, wastewater and infrastructure for new communities. Professional Experience Vice President of Water Resources Development, Renew Strategies. Ms. Medellin manages the planning, acquisition and development of water resources, wastewater services and infrastructure for Renew Strategies. As a member of the management team, she is also involved in operational issues, business development and market strategy. Utility Development Manager, JF Companies. Ms. Medellin managed the development of water and wastewater infrastructure for JF Companies developments. This included project management, permit acquisition, operation of facilities and trouble-shooting. Principal Engineer, Brown and Caldwell. Ms. Medellin supported the regional director in business development for the Colorado, Arizona, and Texas regions. She also provided direction at the national level for water resources, drought and water conservation efforts. Planning Department, Denver Water. Water Resources Engineer in Denver Water s Planning Department. Ms. Medellin contributed to the managing of current demand and the planning for future demand. During the recent drought, Ms. Medellin worked with citizen groups and Denver Water staff to develop restrictions to meet demand reduction goals. Ms. Medellin managed the 2004 Update of Denver Water s Drought Response Plan. She also managed the Moffat Collection System EIS Project to secure permits for 18,000 acre-feet of new firm yield. In this capacity, she was responsible for the activities of two consultant teams and Denver Water staff. Ms. Medellin also supported hydraulics modeling, conservation efforts, and supply analysis. Constructed Wetland Inventory, State of Colorado. Project engineer for multi-agency project to catalogue constructed wetlands. Ms. Medellin prepared a technical report to document the status of Colorado treatment wetlands and developed Lessons Learned by operators and designers in Colorado. Ms. Medellin conducted public meetings and met with Task Force members to present the results of this inventory. At the end of the project, Ms. Medellin was invited to serve as a member of the Governor s Task Force for Wetland Initiatives. Regional Water Supply Study Group Needs Assessment, Newport News Waterworks. Project Engineer for a water supply and demand study for Newport News Waterworks and partnering water suppliers. Ms. Medellin s tasks included determining water demands for the region and for each jurisdiction. A land-use approach was used to forecast water use based on projected land development. A Monte-Carlo based analysis was performed to characterize the risk nature of the client s water portfolio.

Design of Drainage Facility, Cripple Creek and Victor Gold Mining Company. Project Engineer responsible for a hydrologic and hydraulic analysis, including HEC-RAS modeling, to design a drainage facility for a new two-mile section of SH 67 through mountainous terrain. Depletion Mitigation Study, Central Nebraska Public Power and Irrigation District (CNPPID). Project Engineer responsible for analyzing the mitigation opportunities along the CNPPID system. The project included locating potential storage sites for pump storage reservoirs, conceptual level design for gravity fill and pump storage reservoirs, and groundwater mitigation options. Ms. Medellin was responsible for the development of a GIS model to determine the response of the aquifer to various groundwater management options. Evaluation of Sanitary Sewer Line, Trinity River Authority, TX. Junior Engineer for the evaluation of existing sanitary sewer line for Trinity River Authority. Ms. Medellin determined feasible options for rehabilitation. Investigation of Texas Water Law, Corpus Christi, TX. Junior Engineer for legal defense of Corpus Christi, Texas. Ms. Medellin calculated water usage needs and acquired necessary permits. Water Conservation Plan, Corpus Christi, TX. Junior Engineer working with Maddaus Water Management to prepare of a water conservation plan for the City of Corpus Christi, Texas. Designed Layout of Ferric Sulfate Holding Facility, Dallas, TX. Junior Engineer responsible for tank dimensions, pipe layout, pump size, drainage and excavation requirements for 30,000 gallon ferric sulfate holding facility. Review of Shop Drawings, Dallas, TX. Junior Engineer responsible for checking construction submittals for local projects including, Dallas Central Wastewater Treatment Plant s new laboratory analysis of water samples, chlorine storage building and Dallas Southside Wastewater Treatment Plant s new anaerobic digesters. Contributed to Northeast Denton County Strategic Water Planning Study, Denton, TX. Junior Engineer responsible for the development of mathematical models to predict future population trends based on current and historic land use and population. Professional Activities Board Member and Chair Pro Tem, Metro Wastewater Reclamation District Chair, Northern Treatment Plant Advisory Committee, Metro Wastewater Reclamation District Past Board Member, Colorado Foundation for Water Education Past Board Member, American Water Resources Association, Colorado Section Graduate, Harvard University Executive Program, Women and Power, 2009 Graduate, Harvard University Executive Program, Mastering Negotiation, 2005 Graduate, Colorado Women s Chamber of Commerce, Power of Leadership Program, 2005 Graduate, Denver Water Leadership Program, 2002 Member, Governor s Task Force on Wetland Initiatives Member, Chi Epsilon, Civil Engineering Fraternity Member, Golden Key National Honor Society

Key Personnel G. Paull Nation Education MS, Administration of Urban and Regional Planning, West Chester University BS, Geology, Denison University Professional Registrations Certified Planner, American Institute of Certified Planners Key Qualifications Mr. Nation brings more than 27 years of public and private sector development and planning experience to Front Range Resources. He is responsible for coordination of land planning, permitting and formation of Metropolitan Districts, farm management, oil and gas coordination and surface use agreement negotiation, easement preparation, survey & platting. He also has extensive experience in zoning, land planning, land development, permitting and project management. In his various capacities, Mr. Nation has: Provided expertise in preparation, review and management of subdivision and land development plans, and development project management from both a public sector and private sector perspective Professional Experience Pilot Drip Irrigation Project. Responsible for the management and coordinated of pilot drip irrigation project and farm management planning for the Pioneer Communities development. Initial pilot project involved putting 160 acres under a drip irrigation system in an effort to maximize water use and adopt cutting edge farm irrigation practices as a part of the development. The project was phased to start with an initial 160 acres and slowly expand to eventually encompass all of the irrigated farm lands within the development. Managed the planning, design, installation and operation of the system. Farm Management. Manage and coordinate farming on the Pioneer Communities development and Lost Creek lands. Management currently consists of preparation and negotiation of leases, water usage, ditch water transfers and use, and coordination with farmers, FSA, and management consultants. Farming management directed toward continued and enhanced farming with a greater emphasis on sustainable technics and water management. Oil and Gas Negotiations. Responsible for negotiation and management of consultants for the successful creation of a Surface Use Agreement (SUA) on the 5,600-acre Pioneer Communities development site with three oil and gas companies. SUA designed so as to allow both the surface owner and the oil and gas companies maximum flexibility while providing greater reliability as to surface development areas. Management and ongoing coordination with oil and gas companies regarding drilling. Right-of-Way and Easement Acquisition. Managed the Right-of-way (ROW) acquisition and condemnation for Yosemite Street in Thornton, Colorado, through the Riverdale Peaks II Metropolitan District. Directed attorney action and coordinated agreements with land owners. Additionally, when the negotiation of off-site easements failed to come to satisfactory conclusion, prepared cost analysis and preparation for condemnation through Second Creek Metropolitan District. Design Entitlement and Construction Mgt. Designed residential and commercial sites including master planned communities, shopping centers, strip centers, gas stations, etc. such as (Pioneer Communities, Denver BMW motorcycle dealership and Town Square at Gateway Village). Involved in design from site layout to building design and finish and site signage elements. Managed development proposals through the municipal entitlement process and permit processes and coordinated landscape design and irrigation, off-site improvements and construction. Designed or managed the site layout on

various residential and commercial developments maximizing development density while protecting environmentally sensitive site elements, at times turning those protected elements into commercial assets. Directed consultants and assisted in direction of site layout and plan preparation for 5,600 acre Pioneer Communities development. Coordinated township review and adoption of the first Delaware County Watershed Stormwater Management Plan. District Budgeting and Formation. Directed consultant preparation of construction budgets and district boundaries. Created additional construction budgets for District and developer improvements for various proposed developments for Metropolitan District creation. Prepared, reviewed and processed various portions of district applications. Managed the creation of Director s Parcels and District inclusions and exclusions. Plan Review. More than 25 years experience in review of residential and commercial development plans. Reviewed and processed thousands of development plans while establishing a standard format for review and reporting to address multiple customer needs, while fitting the needs of the municipal client as well. On behalf of development clients and municipalities worked as a consultant since 1985, and as a city planner and project manager for the City of Aurora from 1993 to 1997.

Key Personnel Bill Owens Education MPA, University of Texas BS, Stephen F. Austin State University Senior Fellow, University of Denver Key Qualifications Mr. Owens has more than 35 years of experience in the public and private sectors. As Governor of Colorado, Mr. Owens not only managed a complex government but also dealt directly with a wide range of water issues. In 2005, Owens signed the Water for the 21st Century Act, an achievement that The Denver Post called the most significant step toward a rational statewide water policy in the past 50 years. Under this bill, Colorado s river basins could enter into voluntary legal agreements, or compacts, for the transfer of water. The state was divided into nine basin roundtables with each roundtable appointing members to the Statewide Interbasin Compact Committee to help foster negotiations. The Owens administration also worked to modernize Colorado s water law to help increase the State s water supply. The Governor s efforts included: Creating the ability to bank water Allowing the use of interruptible supply contracts Implementing the Statewide Water Supply Initiative (SWSI), a basin-by-basin analysis of current and future water uses and needs. Mr. Owens is currently on the Board of Directors of Bill Barrett Corporation (BBG; NYSE), Key Energy Services (KEG; NYSE) and Cloud Peak Energy (CPE; NYSE). Professional Experience Governor of Colorado, 1999-2007. As Governor, Mr. Owens initiated the statewide road/light rail bonding program (approved by the voters in 1999) which allowed for the modernization of 21 miles of interstate highway and 19 miles of light rail (T-REX). The bond program (the third in the country to bond future federal gas tax proceeds) also funded 25 other transportation projects across Colorado. Mr. Owens proposed and signed into law a bill which allowed the State of Colorado to use Design/Build in its construction projects. The T-REX project was the first such Design/Build project undertaken by the State. As Governor, Mr. Owens was also responsible for the decision to fast track the completion of the University of Colorado Medical School Campus in Aurora, using Certificate of Participation notes (COPs) to fund the $250 million construction project. Treasurer of Colorado, 1995-1999. As State Treasurer, Mr. Owens was responsible for managing a diverse $5 billion bond portfolio and was a member of the board of directors of the Colorado Public Employees Retirement Association (PERA), with a $30 billion portfolio of stocks, bonds and other diversified investments. Colorado State Senate, 1989-1995. Mr. Owens also represented Arapahoe County in the Colorado Senate and House of Representatives and served two terms as Chair of the Aurora (CO) Planning and Zoning Commission. As a legislator, Owens was active on water development and local government issues and sponsored legislation which allowed for the creation of the Aurora Reservoir. Colorado House of Representatives, 1983-1989 Chair, Aurora Planning Commission, 1980-1983 Director, JF Companies, 2007-2010 Executive Vice President, Rocky Mountain Oil & Gas Association, 1993-1995 Executive Director, Colorado Petroleum Association, 1980-1993 Professional Achievements and Honors Chair, Western Governors Association Chair, Republican Governors Association Executive Committee, National Conference of State Legislatures Honorary Doctorate, University of Denver Distinguished Alumni Award, Stephen F. Austin State University Outstanding Graduate, Lyndon B. Johnson School of Public Affairs, University of Texas Listed as one of the 100 outstanding graduates, University of Texas

Key Personnel Shelley Schafer Education BA, Communication, with Distinction, University of Colorado at Boulder Phi Beta Kappa Honor Society Key Qualifications Ms. Schafer brings more than 20 years experience as a toplevel executive assistant. She has extensive experience in the coordination, planning, and support of daily operational and administrative functions. She is also experienced in supporting complex, deadline-driven operations and is able to identify goals and priorities and resolve issues in initial stages. Professional Experience JF Companies. Provided high-level administrative support to three executives Chairman, CEO and Principal of leading property development firm. Performed a variety of key tasks: managed calendars, meetings, travel, personal correspondence, contacts and special projects. Bill Owens, LLC. Served as Executive Assistant and book keeper for former Colorado Governor Bill Owens. Performed all bill paying and bookkeeping functions, prepared, submitted and tracked expense reports for several companies/boards, conducted research for speeches and articles, managed calendars, meetings, travel arrangements, correspondence, and special projects. Executive Assistant to the Governor, State of Colorado. Ms. Schaefer acted as the primary liaison between the Governor, his staff, and the public. She designed, implemented and oversaw the scheduling system, supervised the Governor s scheduler, coordinated his daily events and meetings. She also composed and edited correspondence, and attended Cabinet and Executive Director meetings. Ms. Schafer was responsible for coordination of special projects for the Governor and also managed all travel arrangements, prepared various reports for filing with the Secretary of State, and managed his business and personal contacts. Executive Assistant to the Treasurer, State of Colorado. Ms. Schafer coordinated the day-to-day office operations and provided fundamental support to the Treasurer and Deputy Treasurer. She also coordinated media events and publicity, served as liaison to press, public, and interested parties, and implemented and administered the Treasurer s scheduling system. She composed and edited correspondence, office policies, press releases, and news advisories. She was further responsible for the implementation of office procedures and filing systems, and for making travel arrangements for the Treasurer, organizing meetings and condicting legal research. Administrative Assistant to Regional Vice President, Texaco Exploration and Productions, Inc. Primary responsibilities included coordination of the dayto-day office operations of the Regional Vice-President and the associated duties of the office. Ms. Schafer also coordinated and organized business development, videoconference and executive management meetings, scheduled company planes based in Denver, wrote airplane scheduling procedures and conducted training sessions on same. Ms. Schaefer administered the scheduling system for the Regional Vice President, prepared monthly reports and expense accounts, established office policies and procedures, made travel arrangements, and handle correspondence, word processing and filing.

Legal Secretary for Holland & Hart. In this role, Ms. Schaefer provided administrative support to attorneys. She assisted attorneys in the fields of business, banking, real estate, public utilities, and litigation. Paralegal work included drafting pleadings and loan documents, drafting incorporation, financing and other corporate documents, preparing and filing financing statements, and legal research. She coordinated and edited a firm publication for clients (several times a year), organized client seminars, internal meetings, and business development events. Ms. Schafer was also responsible for the coordination of continuing education accreditation for seminars, making individual and group travel arrangements for firm meetings, preparing monthly client bills, drafting and editing correspondence, typing legal documents, and assist clients and filing.

KEY PERSONNEL Mark D. Sullivan Education JD, University of Maryland School of Law BA, Furman University Professional Registrations Attorney, Colorado State Bar Key Qualifications Mark Sullivan is the Chief Executive Officer of Renew Strategies LLC and has more than 25 years of legal and business experience working with private companies and governmental entities, including work as: An attorney on complex commercial litigation and transactions for 20-plus years; An executive with several companies that own and develop water and land resources in the Denver Metropolitan area; and The lead executive and negotiator on a $100 million plus transaction involving water rights, land, easements and other related assets. Professional Experience Chief Executive Officer of Renew Strategies. Mr. Sullivan oversees the dayto-day operations and finances of this water and land resource company that purchases, manages, develops and markets water rights, land and related assets in the Denver Metropolitan area. In this position, he also has successfully raised capital for the company s operations and structured and negotiated a transaction involving capital and water and land assets in excess of $100 million that included the water rights being offered to Castle Rock in Renew s SOQ. Executive Vice-President and General Counsel. In this role, Mr. Sullivan was involved in all aspects of the business for a group of water and land resource and development companies. He worked with the executive team to develop business plans and strategies for the group of companies and their assets and was involved in various transactions with a combined transaction value in excess of $200 million. He also worked with other company executives to raise capital for companies; provided legal counsel, guidance and advice to the executive team and senior managers on all aspects of the companies; managed and supervised legal work performed in Colorado and Arizona by approximately eight outside law firms that handled real estate, water, tax, litigation, special districts, contracts and other legal matters for the companies; provided counseling and advice on employment and human resource issues; and developed and maintained relationships with numerous lenders and vendors. Partner at Jacobs Chase LLC, Denver, Colorado. Mr. Sullivan was an equity partner in the commercial litigation department of one of Colorado s top commercial and real estate law firms. His practice included representation of businesses and business people in complex commercial litigation, including real estate disputes, director, officer and other fiduciary liability, non-compete and confidentiality agreements, and contracts involving various complex financial matters. His practice also included providing advice and counseling to a water and land resources company and its affiliates on real estate and funding transactions. Attorney, Pryor Carney and Johnson, Englewood, Colorado Judicial Law Clerk, Chief Justice Anthony Vollack, Colorado Supreme Court, August 1991 to August 1992, Denver, Colorado Prior to his business and legal career, Mr. Sullivan worked in the United States Senate for Senator Alfonse D Amato and Senator Mark Andrews.

Awards and Activities Member, Governor Hickenlooper s Water Transition Committee Board Member, Denver Metro Chamber Leadership Foundation, 2002-2008, Board Chair, 2006-2007 Led merger of Colorado Leadership Alliance with Denver Metro Chamber Leadership Foundation Board Member, Denver Metro Chamber of Commerce, 2006-2007 Board Member, Museo de las Americas, 2005-2008 Board Member, Museum of Contemporary Art-Denver, 1999-2001 2009 Colorado Super Lawyer, business litigation Martindale Hubbell rating: AV