Denver Water board to consider $8.85 million Hazeltine contract amendment
The proposed amendment would raise the pump-station contract to $21.4 million as the utility forecasts a $6 million revenue shortfall and $33.6 million capital-spending overrun for 2026.
Denver Water’s board is scheduled to consider an $8.85 million amendment to the Hazeltine Pump Station construction contract on Aug. 12, raising its maximum value to $21.4 million. The Denver Water board agenda lists the item as a consent action.
The proposed second amendment would add $8,851,887 to Hensel Phelps Construction Co.’s contract, bringing the total to no more than $21,401,777. The original contract and first amendment totaled $12,549,890. Denver Water expects to spend about $5 million this year and budget the remaining $16,401,777 in 2027.
The Hazeltine project is intended to improve drought resilience by capturing and exchanging reusable South Platte River flows. Denver Water says the exchanges will result in an equivalent amount of water stored upstream for delivery through its treatment plants. The pump station is targeted to begin operating July 1, 2027; the agenda anticipates a future third amendment for electrical equipment needed to meet that schedule.
Denver Water solicited bids from four general contractors before selecting Hensel Phelps. The company completed an earlier heavy-civil contract on time and on budget, according to the staff recommendation, and agreed to an open-book fixed-fee approach for the current work.
The board also is scheduled to consider a $944,000 contract with American West Construction LLC to modify inlet and pressure-regulating valves at the 64th Avenue Pump Station. The work would replace two 24-inch pressure-regulating valves and a 24-inch cone valve with a 14-inch sleeve valve and a 12-inch pressure-relief valve. Denver Water says the changes would simplify operations, regulate pressure entering the 64th Avenue Reservoir and improve distribution-system resilience.
The 64th Avenue contract would run from Aug. 12, 2026, through July 16, 2027. Denver Water expects to spend $169,020 in 2026 and budget $774,980 in 2027. American West was selected as the lowest-cost bidder after five prequalified contractors submitted bids, according to the agenda.
Denver Water’s June financial forecast projects $482.501 million in total revenue, $5.986 million below the $488.486 million budget. Water sales account for most of the shortfall, with projected revenue of $388.507 million, or $21.123 million below budget, after anticipated drought impacts were incorporated. Hydropower revenue also is forecast below budget, while higher interest income, system-development charges and other revenue partially offset the decline.
The utility projects $312.713 million in 2026 capital spending, $33.647 million above its $279.066 million budget. The largest listed drivers are Gross Reservoir, $15.6 million over budget; Marston Disinfection Improvements and Electrical, $8.9 million over; and Hazeltine Pump Station, $8.6 million over. Other listed overruns include the Strontia Outlet Works and EIC, the Eleven Mile Electrical Upgrade, the Tower Road Recycled Water Main and vault modifications.
The financial report does not say whether the variances will affect rates, reserves, borrowing or future projects. Denver Water’s 2026 budget materials say the utility uses rates, debt and cash reserves to meet operating costs, debt-service coverage, target reserves and rate-funded capital needs. The Aug. 12 report forecasts debt and loan proceeds at the budgeted $375 million and debt service only slightly above budget; it does not identify new borrowing or a specific reserve draw to cover the projected gaps.
As of Aug. 8, no vote had occurred. Denver Water’s 2026 board-meeting calendar did not yet include post-meeting minutes, a recording or a resolution for Aug. 12. The board’s final action and any changes to the proposed contract amounts will need to be confirmed after the meeting.