BOARD00103 ‎(2)‎

• Board Meeting Date: 1/23/2007
• Description: CF Section - New Loans - Bull Creek Reservoir, Canal and Power Co. - Reservoir No. 4 Rehabilitation and Enlargement
• Board Meetings - Doc Type: Memo

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Bull Creek Reservoir, Canal & Power Company
January 23-24, 2007
Page 2 of 5

Agenda Item 9b

included portions of the decreed storage rights in Reservoirs No. 1 and NO.2. This was due to the
fact that both of these reservoirs did not provide the necessary volume for the decreed water storage.
right. The enlargement of Reservoir NO.4 will return the Company's yield to historic levels.

In October 2003, the Company entered into an agreement with the SEa to restore the capacity of
the three reservoirs. Several amendments to the agreement have occurred over the last 3 years and
the Company will file an additional amendment to request that the Company be allowed time to
repair the Reservoir No.4; return it to its original capacity and remove it from the abandonment list.
In addition, the Company has filed an application in Case No. 06CW261, Division No.5, for
adjudication of an additional 115 ac-ft of storage in Reservoir NO.4. It is our understanding that the
requests will likely be granted by the Division 5 Water Court.

Reservoir NO.4 is located on the west branch of Bull Creek above Bull Creek Reservoir No.3 and
Big Beaver Reservoir. The Reservoir is located within the Grand Mesa National Forest. The SED
placed the fill restriction on the reservoir due to a substandard dam crest width and a high phreatic
water level in the dam, which may create an unstable embankment and possible failure. In a
subsequent inspection, the SED indicated, that without the needed repairs, a breach order is likely in
the next two years.

Feasibility Study

Paul Currier, PE, Water Resource Consultants, LLC of Rifle, has completed the loan feasibility study
in accordance with CWCB guidelines. The study includes: a compilation of the stipulations and
agreements, preliminary design drawings, cost estimates, and financial analysis. The cost estimate
has been prepared by Jeff Allen, PE and Dana Miller, PE of E&C Services of Buena Vista, Colorado.
Garrett Jackson, P.E., Dam Safety Engineer (Division 5) has provided valuable input regarding the .
Icorrective actions necessary and has indicated that the concept of the proposed repairs is realistic.' _

iThe Bull Creek Reservoir. Canal & Power Company
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rhe Company is located in the Town of Mesa, approximately 30 miles east of Grand Junction. The
Company provides irrigation water to approximately 800 acres of agricultural land primarily used for
battle ranching. The Company was registered in the State of Colorado in 1895 and is a non-profit
borporation in good standing. The Company currently has 19 shareholders and a total of 500 shares
6f stock. The Company has the power to set members' annual assessments, cut off water deliveries
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to shareholders that fall to pay assessments, and to sell stock to pay back assessments.

6n December 9,2006, the Company held a Shareholders meeting, which was attended by Kirk
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Russell. Irvin Johnson, President, described the current scope and cost of the project to the
1ttendees. Shareholders voted unanimously to proceed with the project and CWCB financing.
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Water RiQhts
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The Bull Creek Reservoirs hold the senior storage rights on Bull Creek and tributaries to Bull Creek.
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fjJ1any of the senior rights on the creek are also owned and used by shareholders of the Company.
Other senior water rights of significance are irrigation rights owned by the Grand Valley Irrigation
Company on the Colorado River near Palisade CO. However these senior rights seldom need to
Wlace a call during winter and spring snowmelt when the reservoirs fill. The table below shows a
~ummary of existing reservoir capacities, water rights owned by the Company and the potential loss
! f the rights if corrective action is not taken. I.

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