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Arkansas Valley Conduit November 13-15, 2006 Agenda Item10a 2001. SECWCD contributed $40,000 to the study. Other contributors included each of the five . counties to be served by the conduit as well as the participants themselves. GEl Consultants, Inc., ' was hired and the study began November 2001 and was completed in June 2003. The "Feasibility Evaluation of the Arkansas Valley Pipeline" established a feasible route for a raw water pipeline at a cost of approximately $182,500,000. This study proposed that the only way the valley could afford to build the project was if there was a federal cost share arrangement. At the conclusion of the $200,000 study to verify that the conduit could be built, Waterworks asked the District to assume the responsibility of moving the conduit process to completion. The District agreed and is now working with water providers of the lower Arkansas Valley to accomplish this much needed project. An Arkansas Valley Conduit Advisory Committee was formed in 2003. SECWCD took the lead on the project and in July 2004 hired Black & Veatch Engineers to review the project costs. The "Arkansas Valley Conduit Financial Feasibility Review Study" was completed in October 2004. It concluded that a more likely estimate of the cost was $252 million. In July 2005, the Colorado Congressional delegation met in La Junta. The meeting with Senators Allard and Salazar and Congresswoman Musgrave concluded with the Senators requiring answers to the following two key questions: 1. Is there enough water supply? 2. Can conduit participants afford their cost share? Slack & Veach was hired to complete an "Investigation Leading to the Preliminary Design of the Arkansas Valley Conduit" study, which was completed in June 2006. The study provided "bookends" of probable costs, based on the several assumed design scenarios: Average Fry-Ark Yield $212,660,000 .. Maximum Month 2050 $286,000,000 Maximum Day 2050 $328,000,000 The costs were deemed to be in the competitive range of costs to the participants. The annual payback cost would range from $2.5 to $4.8 million ($1.50 to $2.20 per 1000 gallons.) It was determined that centralized treatment (without disinfections) would provide high quality water to participants, with the most operational flexibility at the lowest overall cost. Recently, the U. S. Bureau of Reclamation (USSR) "Arkansas Valley Conduit Re-evaluation Statement" - April 2005, became available. This is also known as the "Look Back Study". This study concluded that a water distribution system was technically viable, and the capital cost of a raw water system would be $265,000,000. This cost is comparable to the Black & Veatch estimate, if the cost of centralized treatment is added. "Letters of Intent" to participate in the AVC were received from 30 of the 41 participants, representing 94.5% of the requested water demand from the project. (Other members not providing letters as yet have been making their annual financial contributions to the project.) A copy of the proposed Participant Funding Agreement to be used between SECWCD and each of the participating entities is being prepared for review by the CWCB. Prior to execution of a State loan contract all funding agreements will be required to be executed. A list of the A VC participants, and those entities who have submitted Letters of Intent is attached. Proiect Need Water Quality - The proposed A VC is designed to bring relatively clean raw water to over 41 water providers in the lower Arkansas Valley, who currently either take water from the Arkansas River, '. and\or pump from shallow and\or deep aquifers. This pumped water has quality problems and requires significant treatment before it meets Clean Drinking Water standards. The pipeline will be Page 2 of 12