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Rate design/financialplanning is needed to determine how to pay for the first three years’ <br />planning costs. A bond issue is required to finance the nearly 25 million dollar 2010 investment. <br />The projected total cost to Fort Morgan for the South Platte second phase is $11,493,000. This <br />investment would be made between 2014 and 2019, unless that portion is deferred. <br />3.4Capital Replacements/Miscellaneous Improvements <br />Planned Capital Improvements/Replacements for the supply system during the next 5 years <br />include: <br />Table 3b – Water System Improvement Estimates <br />ItemApproximate Cost <br />1. Purchase land for raw terminal reservoir $200,000 <br />2. Modify house water system $50,000 <br />3. C-BT units purchase program$2,500,000 <br />4. Security fence at tanks and plant $100,000 <br />5. Allowance for expansion of existing terminal reservoir $1,000,000 <br />6. Contingency Allowance $250,000 <br />Total – 5 year estimate $4,100,000 <br />Total – 5 year estimate (less C-BT purchased) $1,600,000* <br />For design year - use $320,000/yr <br />*Commentary. It is recommended that near-future C-BT unit purchases be limited to the <br />amount sold – thus creating a “wash” fund with neither costs nor income included in the design <br />budget. It is intended that the design rate income for the pro-forma year assume a low growth <br />rate. This above budget for replacement/minorcapital improvements is minimal and would <br />probably need to be increased toaccommodate a significant number of new customers. In <br />effect then, the assumed growth rate and capital requirements are consistent – and should yield <br />conservative results. <br />CAPITAL PROGRAM – WATER DISTRIBUTION <br />Fort Morgan has had prepared a Treated Water SystemMaster Plan (McLaughlin-Rincon, Ltd. <br />December, 2006). This Plan includes all potablewater facilities downstream of the plant <br />product transmission line, which feeds the system. <br />The Capital program budgets may depend significantly on actual development rate. Growth <br />rates were projected from 0 to 1.7% per year (Harvey Economics, Nov. 30, 2006). However, it <br />can be assumed that the City will individually evaluate extensions of service for new <br />City of Fort Morgan Water Conservation PlanPage 25 <br />