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:,~d .--' Attachment 5 to CWCB Construction Fund Loan Application of The Model Land & Irrigation Company, Item B-5. Description of the Company's Proposed Project, Purpose and Need. On October 26, 1998, the Colorado State Engineer issued an order to the Company prohibiting storage of any water in the Black Hills Reservoir due to the poor condition of the dam and piping occurring around the outlet facilities. The Company has complied with this order. The Company proposes to use the proceeds of a CWCB loan to perform the repairs and rehabilitation to the Black Hills Dam necessary to restore the ability store water to the level permitted before the State Engineer's order. Generally, the Company plans to reconstruct the dam outlet works, and repair certain portions of the dam crest, embankment and upstream face. The present condition of the Dam and the outlet works, and the work necessary to restore the Dam outlet works, are described in Attachment 6 hereto. The feasibility study currently being prepared will address all proposed repairs. It is extremely important to the Company and its shareholders to restore their ability to store water in Black Hills Reservoir. The Company's operations are materially adversely impacted by its current inability to store water in the Reservoir. The Reservoir serves the following purposes for the Company and its shareholders: 1. It is an equalizing reservoir for management of water diverted from the Purgatoire River. Due to the length of the Model Ditch, it takes almost 3 days for water to flow from the Purgatoire River to the end of the Model Ditch. The Reservoir allows more rapid and accurate adjustments of water deliveries for irrigation than would be possible without the Reservoir. For example, the Reservoir allows the Company to reduce or increase deliveries of water for irrigation without making changes of the amount of water actually diverted from the Purgatoire River. 2. The Reservoir collects and stores water from various arroyos, and return flows from upstream irrigation, that would otherwise flow into the Model Ditch and cause operational problems. The Reservoir also protects the Model Ditch from being overtopped at times when runoff from precipitation exceeds the capacity of the Ditch. 3. The Reservoir stores water diverted from the Purgatoire River under the April 14, 1965, conditional priority to provide additional water supplies to the irrigated lands. In 1997 the Company diverted 14,604.07 acre-feet of water delivered by the Purgatoire River Water Conservancy District pursuant to the May 28, 1966, contract between the parties, Attachment 7 hereto. In 1998 the Company diverted 10,233.58 acre-feet of water delivered by the Purgatoire District pursuant to the contract. In addition, in 1998 approximately 1,300 acre- feet of water was diverted from the Purgatoire River under the April 14, 1965, conditional ATTACHMENT 5