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~ ( MEMORANDUM TO: Town of Norwood Water Commission Norwood, Colorado FROM: Bill Hamann, WestWater Engineering Grand Junction, Colorado RE: Cost of Pipeline From Gurley Reservoir DATE: December 5, 1994 During the hearings before the Colorado Water Conservation Board on November 4, 1994, a CWCB board member apparently asked the question as to how the cost of the Gurley Pipeline had jumped from $320,000 to almost one million dollars. The question is basically a result of a misunderstanding of the actual costs of the pipeline. The purpose of this memorandum is to provide background information on why this question was asked as it relates to the actual costs of the pipeline. The preliminary engineering report prepared by WestWater Engineering in November 1991 developed costs for a pipeline from Gurley Reservoir to the Town reservoir. In that report costs were developed for two alternate pipelines; a 6 inch ductile iron pipe and a 6 inch PVC pipe. The costs, as shown in Table IV-F of the report (copy enclosed), are as follows: 6" DIP with intake - $445,200 6'! PVC pipe with intake - $382,600 The costs do not include engineering, legal or administrative costs. These costs, which were estimated to be 15%, were added later in the report in Chapter VII, which provided the summary and recommendations for all costs developed earlier in the report (Table VII-A from that chapter is enclosed). ~ The 1991 Report also included an analysis for installing the hydroelectric plant on the waterlines. A preliminary evaluation indicated that a hydro plant using an 8" ductile iron pipe could produce a net revenue of $6,450 per year. This annual income would service a debt of $118,000. Thus, in Table IV-J, which summarized the construction costs for all improvements to the raw water supply (copy enclosed), a footnote was added that the income from the hydroelectric plant would reduce the annual payments such that the equivalent debt for the 6" DIP system would be $327,200 ($445,200-$118,000). Later in the report, in Table VII-A (which summarized all of the alternatives), the cost of the domestic pipeline was listed at $327,600; however, it also had a footnote that the listed number assumes that a hydroelectric plant would be built. -~