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.. Tom Hill - McElroy Dam November 6, 2006 Page 2 of 4 Agenda Item 10d "j The Hills hired URS Consultants to file a breach application with the SEO and hired Pryor Excavatinq~ breach the dam. During the breach it was discovered that a large sinkhole formed on the upstream c., embankment. URS Consultants have developed plans and specifications and applied to the SEO for a Dam Safety Permit for the reconstruction. Loan Feasibility Study The Loan Feasibility Study was prepared by John Sikora, URS Corporation. The study was preparecl in accordance with the CWCB guidelines and includes preliminary engineering design and cost estima1es prepared by the engineering firm. Tom Hill Family The Hills own the Gore Pass Ranch which utilizes the irrigation water stored in the McElroy Reservoir. The Hill family has owned the 2,588-acre Ranch for approximately 30 years. The Hills own, in part, tvv'O other reservoirs in the area, which are used for irrigating the Ranch lands. The Hills are currently selling the Ranch at an asking price of $6.5 million. McElroy reservoir is on 1,929 acres of State Land Boarcl land adjacent to the Ranch under a 1 O-year lease for $2.714/year. The Hills currently live on a recently purchased ranch near Olathe, Colorado. The Hills moved to Olathe area to be closer to health care facilities in Montrose. The Hills continue to operate the Ranch from Olathe using hired help and family. Water Riahts The Hills own the 240 AF storage right in McElroy Reservoir. The right has an appropriation date of . 1929 and an adjudication date of 1938. This storage right is used for irrigation on 400 acres of hay 01 the Ranch. Pass Creek Ditch and Hogback Ditch and five direct flow rights are also used to irrigate the Ranch. The Pass Creek Ditch has three decreed rights: 5 cfs 1884 appropriation, 3 cfs and 2 cfs (4/1 thru 6/15 flood right) with a 1920 appropriation. The Hogback Ditch was decreed for 9.65 cfs with a 1900 appropriation date. The Pass Creek Ditch is the "calling" structure on Pass Creek. Proiect Description The purpose of this project is to provide emergency repair of the failed McElroy dam. Due to a failure of the dam outlet and embankment, the SEO required an emergency breach which was completed in August 2006 at a cost of $100,000. Without the reservoir, the Hills would realize a loss in hay production of $45,000 per year; therefore the Hills have decided to replace the dam. Water in the area has been valued at $4,000/AF, which would equate to a $960,000 loss if not repaired. URS Corporation evaluated two alternatives: No Action and Dam Replacement. The No Action was not viable due to the loss of annual crop production and value to the Ranch. The Hills decided to replace the dam at a total cost estimate of $854,000. Total $101,000 . $650,000 $103,000 $854,000 Emergency Breach Reconstruction (w/10% contingency) Planning/Engineering .