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<br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br /> <br />estimate the actual construction cost of the project prior to having contractors bid on the <br />project. <br /> <br />Transfer Capabilitv Option <br /> <br />In addition to providing pressurized irrigation water to the Lake Canal Company service <br />area, utilization of the pump and pipe network was reviewed to determine if it could also <br />serve as a transfer system. The transfers would occur between the North and South <br />reservoirs and/or the Middle and South reservoirs. The proposed pump stations would <br />have to be upgraded to provide the same flow rate in the "off hours" from the irrigation <br />watering window. Additionally, several pipes would have to be increased in size to meet <br />a design criterion of 7.5 FPS during the transfer flows. A hydraulic model was developed <br />to determine the necessary modifications to provide water transfer capabilities <br />throughout the system. An associated Opinion of Probable Construction Cost was <br />developed for this option and was found to be approximately 17% greater than the cost <br />for the proposed transmission system. <br /> <br />frQposed Initial Hookup Fees and Annual Water Costs <br /> <br />A preliminary investigation of suitable initial hookup costs6 and annual costs of water has <br />been completed based on shared costs experienced by canal companies in other states <br />and on the basis of what will work to make the investment costs suitable for all parties <br />that are involved in northeastern Colorado. Clearly, the initial capital investment by the <br />canal company mu?t be paid off, along with interest on the construction loans, and the <br />annual operating costs of the secondary supply system must be met to include the <br />ultimate replacement of the system. Costs have been projected on the basis that the <br />hookup fee revenue would, over time, payoff the initial investment of principle and <br />interest on the construction loans, while also generating funds for the ultimate <br />replacement of the system. Annual water revenues, by contrast, would go primarily <br />toward annual expenses associated with operating the secondary supply system. <br /> <br />Table 9 indicates both hookup fees and annual water costs, which vary with POC size. <br />These proposed costs are presented for discussion and further analysis should such be <br />requested or warranted. It should be noted that hookup fees are based on an <br />approximate direct relationship with available flow. This is how most water purveyors set <br />hook up fees. <br /> <br />The annual cost of water is intended to be a flat rate for an unmetered circumstance, but <br />a unit cost per 1,000 gallons could likewise be established to provide for a similar annual <br />cost. If water were metered at a single rate with no tiered rate, then the metered rate <br />would be approximately $1.40 per 1,000 gallons. <br /> <br />6 In some areas, hookup fees are also termed plant investment fees. The terms are synonymous. <br /> <br />Aqua Engineering, Inc. <br />June 7, 2004 <br /> <br />Canal Modernization Feasibility Study <br />- 19- <br />