Colorado - Bull Creek Res. No. 4_Water Activity Summary

• Basin Roundtable: Colorado
• Applicant: Bull Creek Reservoir Canal & Power Company
• Description: Bull Creek Reservoir No. 4 Spillway Analysis
• Account Source: Basin
• Board Meeting Date: 9/19/2007
• WSRA - Doc Type: Water Activity Summary Sheet - CWCB Evaluation/Approval Documents

The Loan Feasibility Study, which is referenced in the application, indicates a cost breakdown of the project as
follows:

$157,000
Planning/Engineering:

Construction: $984,000
Contingency: $137,000
Cons. Serv./Management:
$55,000

Total * $1,333,000

*Total costs for the project as approved in the CWCB Loan

To date, the Company has requested $280,000 in disbursements from CWCB for Planning/Engineering expenses. The
requested amount shows an overrun of approximately $120,000. The overrun will likely increase since the construction
plans have not been formally approved by the SEO and a Forest Service Permit has not been obtained. The overruns
are going to be difficult to recover within the funding available from CWCB. If the Company receives this grant, the
Company will still need to use cash reserves to cover the 10% matching funds on the CWCB Loan.

The construction was scheduled to start in the summer of 2007, however, delays in permitting and construction plan
completion will require another year of delay in the construction schedule.

Issues/Additional Needs:

The application falls short of meeting several critical components in the criteria for a Statewide Grant funding
established for evaluation and approval of the grants. The areas which this project most notably fails to minimally meet
the criteria threshold are:
1) Project does not address the needs of multiple “interests” or “basins”
2) Project does not “promote water conservation and water efficiency”
3) Project does not “provide a high level of benefit to Colorado in relationship to the amount of funds requested” – The
grant request will directly assist the 26 Company stockholders, however, the State does not receive a high level of
benefit.
The applicant did not use the 2006/2007 application form as found on the website. The use of the correct application is
critical since the applicant is required to provide specific details as to the water activity’s ability to meet the Criteria
and Guidelines of the Water Supply Reserve Account grant program.
The applicant must provide a detailed cost breakdown of the project costs. Since the grant request is for the 10%
unfunded portion of the project, a detailed scope of services and cost estimate showing the portion of the project that is
funded by the grant and the specific deliverables is needed to track the products produced using the Water Supply
Reserve Account.

Recent Project correspondence has indicated that the presence of fens is possible in the vicinity of the Reservoir No. 4
enlargement area. To protect the applicant and the State’s funds, this question must be answered before impacted
project work proceeds.

Staff Recommendation:

Staff does not recommend funding of the $120,000 grant request for the Bull Creek Res. No. 4 Rehabilitation &
Enlargement. Staff’s decision is supported primarily by the fact that the Statewide Grant funds are to provide a
proportionate benefit to the State as a whole. This grant is primarily a project benefiting a few citizens in the State. In
addition, there is concern about the Company’s ability to manage and control project costs relative to budgeted
projections. If the Basin Roundtable and applicant wish to continue to pursue the project staff recommends the
applicant revisit the mix of funding: use of basin funds, modification of loan, use of shareholder funding.

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