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<br />BACKGROUND <br /> <br />The District <br /> <br />The Ute Water Conservancy District was organized under the Water Conservancy Act <br />(37-45-101 et seq., C.R.S.) to provide domestic water service to the rural areas outside <br />the cities and towns of the Grand Valley in Mesa County. The District service area <br />encompasses about 240 square miles in the Grand Junction metropolitan area with the <br />exception of about seven square miles served by the City of Grand Junction and several <br />smaller communities. <br /> <br />In September 1994, the District established the Ute Water Activity Enterprise in <br />accordance with the Water Activity Enterprise Act. As required by Amendment One, the <br />Enterprise currently receives less than 10 percent of its annual revenue in taxes and has <br />the power to issue its own revenue bonds and incur multi-year indebtedness. <br /> <br />The District's current average annual water demand is about 8,600 acre-feet. As of 1997, <br />the customer base consisted of 17,437 taps (a service area population of about 60,000 <br />people) in the following categories with revenues as shown in Table 1: <br /> <br />Table 1. Ute WCD Taps and Water Service Revenues by Customer Class, 1997 <br /> <br />Customer Class No. of Taps Revenue <br />Residential 16,263 $3,300,159 <br />Multiple Residential (1) 470 516,378 <br />Commercial or Industrial 700 1,158,936 <br />Bulk Meters (2) 4 311,101 <br />Totals 17,437 $5,316,574 <br /> <br />(1) Multiple Residential includes 3,096 customers <br />(2) Bulk Meters includes 2,193 customers <br /> <br />Plateau Creek Pipeline <br /> <br />The District's primary source of water supply is from Plateau Creek, a tributary of the <br />Colorado River originating in Plateau Creek Canyon between Grand Mesa and <br />Battlement Mesa east of Grand Junction. Water is collected from the tailrace of the <br />Lower Molina Power Plant of the Bureau of Reclamation's Collbran Project and is <br />transmitted 4.5 miles to storage in Jerry Creek Reservoirs. From the reservoirs, water is <br />transmitted by gravity to the District's water treatment plant in the existing 24-inch <br />diameter Plateau Creek Pipeline, a distance of about 15 miles, in an alignment generally <br />following Plateau Creek as shown on Figure 1 (reproduced here with the permission of <br />Camp Dresser & McKee). <br /> <br />The pipeline has inadequate hydraulic capacity for existing demands, shows signs of <br />deterioration, and is located in an alignment subject to landslides and frequent stream <br /> <br />2 <br />