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<br />Feasibility Study <br />Pine River - Bayfield Ditch Company <br />Siphon Replacement Project <br /> <br />Introduction (Need for the Project) <br /> <br />The Pine River - Bayfield Ditch Company (PRBDC), located in LaPlata County, operates the Pine <br />River-Bayfield (PRB) Ditch for the benefit of the shareholders by providing direct flow irrigation <br />water. The ditch diverts from the Pine River, and carries through the Schroder Ditch and <br />Enlargement to its beginning, just east of the Town of Bayfield. Water deliveries are made through <br />the Company's ditch to the 2596-acre service area. From the headgate, the ditch flows through a <br />concrete flume and into a 32-inch diameter steel pipe siphon for 2300 feet. The siphon drops an <br />estimated 100 feet in elevation, runs under Beaver Creek, and shoots up about 250 feet over a <br />rocky hill. Pieces of the original wood and wire siphon, probably built around 1915, can still be <br />seen along the siphon route. The current siphon, rated for 30 years, is now nearly 50 years old, <br />and the steel has oxidized to the point where the pipe walls have thinned in many places beyond <br />repair. Large quantities of iron oxide material accumulate at the siphon outlet, which has been <br />noted in the ditch review records since 2001. With evidence of further degeneration, the siphon is <br />now subject to imminent failure, which would entirely close the ditch. The PRBDC wants to <br />replace the siphon this fall, prior to the 2004 irrigation season. <br /> <br />Project Sponsor <br /> <br />The PRBDC is a mutual ditch company and a non-profit corporation registered in the State of <br />Colorado. Fifty-one shareholders hold 1952 shares of stock. The PRBDC has the power to set <br />annual assessments to be paid by the shareholders, the power to cut off water deliveries to <br />shareholders that fail to pay their assessments, and the power to offer stock for sale to pay back <br />assessments. The PRBDC articles of incorporation and by-laws are included in the Appendix. <br /> <br />Many of the current shareholders are descendents of Pine River Valley pioneers, involved in <br />agriculture in the valley for decades. The ditch also carries tribal water for the Southern Ute <br />Indian Tribe, the largest shareholder on the ditch. Originally incorporated in 1915 under another <br />name, the ditch charter was amended in 1953 to acquire what was then known as the extension <br />of the Schroder Ditch. <br /> <br />Area farmers have been devastated by four .years of drought and area forest fires. The summer <br />of 2002 was particularly difficult with the high mountain pastures burned, less than a month of <br />irrigation water, and below-market prices at auctions glutted with cattle. The majority of <br />shareholders have found they must have outside income for their livelihood, but there are still a <br />few that completely depend on agriculture, and thus, the irrigation water. <br /> <br />Aware for some time that the siphon must be replaced, shareholders voted unanimously to <br />increase annual assessments to finance repayment of a project loan at the annual meeting <br />February 10, 2003. <br /> <br />PRB Ditch Company <br />Siphon Replacement Feasibility Study <br />June 2003 <br /> <br />Page 6 of 15 <br />