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Penrose Water District November 13-15,2006 Agenda Item 10c Appraisal - CWCB staff required that the applicant submit a written appraisal or opinion of value .. from a qualified water rights appraiser supporting the purchase price. Prior to the purchase, an appraisal of the water rights was secured by the District, conducted by Ralph Adkins, of Ralph Adkins & Associates. The appraised value was $1,753,333. Additionally, an Opinion of Value was submitted by Leonard Rice Engineers, Inc. which supports the purchase price of $1,400,000, equivalent to approximately $4,130 per acre feet of consumptive use. Proiect Description The purpose of this project is to provide improved water reliability for the Penrose Water District. Three water utilization alternatives were cQnsidered for the project including: 1. No-action alternative 2. Diversion to a new storage facility along the Arkansas River with a raw water pipeline. 3. Diversion and raw water pipeline to an enlarged Brush Hollow Reservoir. Alternative 1, No-action alternative - The no-action alternative involves continued reliance on the lease agreement with BPW. This option does not satisfy the needs of the District. The no-action alternative does not improve the reliability of the existing system. The drought of 2002 and the response to the drought in 2003 showed the unreliable nature of the Beaver Creek supply. Since the District only leases from BPW. the no-action alternative is completely reliant on BPW, and does not provide the District independence from other entities. Alternative 2, New Storage Facility and Raw Water Pipeline - involves diversion to a new storage facility along the Arkansas River and construction of a raw water conveyance pipeline to the . water treatment plant. The new storage facility would be constructed under the Lester and Attebery Ditch. The Lester and Attebery Ditch would then be utilized to divert and convey the historical consumptive use component of the Pleasant Valley Ditch water right to the new storage facility, with subsequent piping or the stored raw water up to the treatment plant. The cost of this alternative was $17,000,000 and deemed not cost effective. Alternative 3, Raw Water Pipeline to an Enlarged Brush Hollow Reservoir - involves diversion from the Arkansas River through the installation of ground water wells along the river, diverting the historical consumptive use component of the Pleasant Valley Ditch water right. A pipeline would be constructed to convey water up to an enlarged Brush Hollow Reservoir. The enlargement of the reservoir would increase the height of Brush Hollow Dam by four (4) feet, and add approximately 600 acre feet of new storage. Once in Brush Hollow Reservoir, the water would be incorporated into the BPW existing system for delivery to the District's treatment plant. Selected Alternative 3, Raw Water Pipeline to an Enlarged Brush Hollow Reservoir - Seven (7) wells will be installed to divert water at the Arkansas River. Each well will be connected to a common 8-inch manifold pipeline, which will connect to a single 12-inch raw water pipeline that will convey the raw water to the enlarged Brush Hollow Reservoir. The proposed well field and well/control building would be located on land owned and operated by the BLM. Use of BLM land for a well field and control building will require a permit from BLM. The total pipeline route is approximately 30,600 linear feet (5.8 miles). The majority of the pipeline will traverse private and publicly owned land. The necessary easement agreements and permits will be obtained for access to private land and public right-of-way. The pipeline will discharge into the enlarged Brush Hollow Reservoir. Raising the dam will consist of placing fill material on the upstream slope of the existing dam, thus shifting the dam centerline slightly upstream. The District is currently in negotiations with . BPW for the right to enlarge Brush Hollow Dam and utilize storage within the reservoir. Page 4 of 8