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<br />Headgate 396 Lateral Corporation <br />November 6, 2006 (Revised November 14, 2006) <br />Page 2 of 4 <br /> <br />Agenda Item 1 Of <br />'" <br /> <br />design, and field engineering services for this Project. Qualifying agriculture producers that install <br />"more efficient irrigation systems", which reduce salt loadings are eligible for funding. <br /> <br />Feasibilitv Study <br /> <br />Max Schmidt, of Water Solutions of Colorado, has completed the feasibility study in accordance <br />with CWCB guidelines. The study includes discussions of alternatives looked at by the Company. <br />A cost estimate was prepared by NRCS in 2004 based on unit prices generated in 2003. In <br />September of 2006, Thor Construction provided a bid for the Project. The bid price was used to <br />establish the loan amount requested. The bid price is significantly higher than that which was <br />approved by NRCS. Since the NRCS grant is paid based on 75% of the NRCS estimated unit <br />rates, the percent of grant coverage of the project is now projected to cover approximately 60% of <br />total project costs. <br /> <br />The Headaate 396 Lateral Corporation <br /> <br />The Corporation is a non-profit corporation registered in the State of Colorado in September 2005 <br />and is in good standing with the State. There are eleven Corporation members. The Corporation <br />is relatively new; however, the Lateral has been in existence since the Grand Valley Irrigation <br />Canal construction. Prior to incorporation, an informal version of the Corporation managed the <br />Lateral by distributing costs or in-kind services for maintenance and repair needs, The <br />Corporation's Funding Agreement establishes that member assessments will be shared equally. <br />The Corporation will own, operate and maintain the new pipe system and will have the <br />responsibility to receive, convey and deliver irrigation water to the members of the Corporation, <br />The Corporation will repair, improve and/or reconstruct the Lateral when necessary. The <br />Corporation does not own any of the water conveyed in the Lateral. <br /> <br />Water Riahts <br /> <br />The members of the Corporation own shares in the Grand Valley Irrigation Company. The water <br />shares are conveyed through Headgate ML-396 and to the members land via the Lateral. The <br />source of the irrigation water is the Colorado River, GVIC has a diversion structure on the north <br />bank of the river near Highway 6 in Palisade.. The Lateral is currently an open ditch and carries <br />the 4,3 cfs and an estimated average of 1,900 acre-feet per year to irrigate crops. <br /> <br />Prolect Description <br /> <br />Three alternatives were analyzed in the feasibility study: <br /> <br />1) No action alternative <br />2) Individual members construct pipeline to meet their own needs <br />3) Participate in the NRCS Colorado River Basin Salinity Control Program <br /> <br />The Corporation chose to participate in the Salinity Control Program primarily due to the available <br />NRCS funding assistance. The selected alternative includes 7,000 feet of new PVC pipe to <br />replace open ditch, flow measurement devises, metered delivery points to each member, valves, <br />drains and vents to improve delivery of the water to the diversion structure. <br /> <br />The loan request is based on the total design and construction cost estimate for the Project, <br />however engineering design and construction oversight may be provided by NRCS as in-kind <br />services. Design is complete and construction is expected to begin October 2006 and be <br />completed by December 2006, <br />