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<br />Background <br /> <br />The Company provides irrigation water to a 24,000 acre service area primarily in Weld and <br />Morgan Counties, located west and south of Fort Morgan. The Company has direct flow rights <br />at the Bijou Canal diversion on the South Platte, and maintains about 90 miles of ditch, Bijou <br />No.2 Reservoir, and some augmentation ponds. Its sister entity, Bijou Irrigation District, owns <br />and operates Empire Reservoir located west of Fort Morgan in Weld and Morgan Counties, <br />between 1-76 on the south and US Highway 34 on the north. The Bijiou Irrigation District <br />provides irrigation water to 19,177 acres in Morgan County, located between the reservoir and <br />the City of Fort Morgan. Water stored in Empire Reservoir is delivered to users by the <br />Company in order to supplement the direct flows, typically in July and August. Annual delivery <br />from Empire Reservoir is about 15,900 acre-feet. The Company's average annual total headgate <br />diversions are 47,460 AF. The Company's average share delivery is 6,920 AF (1.73 AF per <br />share. ) <br /> <br />The Company's river diversion structure/headgate consists of two components: 1) the ditch <br />intake structure, which consists of a structure with 5 steel radial gates to adjust flows into the <br />Bijou Canal, which is in good condition; and 2) the river diversion structure, used to divert flow <br />into the ditch intake structure, which uses a radial gate, a slide gate, and a removable board <br />system to divert flow into the ditch. The diversion structure had suffered extreme damage in <br />times of high flow in the river and was in need of significant repairs. This structure could not be <br />operated in a manner to reduce the sand upstream of the intake gates. The sand bar caused an <br />excessive amount of sand to be drawn into the canal that hampered diversions into the canal <br />intake. The existing diversion also had a problem with debris, mainly trees getting hung up, and <br />required continual maintenance. This proposed project involved repairs to the river diversion <br />portion of the structure by constructing a 96 foot long Obermeyer Pneumatic Spillway Gate <br />(Bladder Gate) structure located immediately adjacent to the river radial gate and the canal intake <br />structure. <br /> <br />Rehabilitation of the diversion structure has been completed by Ransom Boone Excavating, Fort <br />Morgan, Colorado, at a final construction cost of $890,000. Below is a brief summary of the <br />major project elements and their estimated cost at the start of the project. <br /> <br />TOTAL: <br /> <br />$ 16,100 <br />749,000 <br />74.900 <br /> <br />$840,000 <br /> <br />1. <br />2. <br />3. <br /> <br />Engineering <br />Construction <br />Contingency (10%) <br /> <br />Discussion <br /> <br />Based on actual construction cost of $890,000 to complete the project, the overall cost has increased <br />by 6%, resulting in a requested loan increase of 45,000. Staff has reviewed the bids received, <br />engineering and legal billings, and has inspected the project by the Company and finds the overall <br />construction cost of the project to be reasonable and consistent with similar diversion structure <br />rehabilitation projects. A detailed summary of the additional expenses are contained on the attached <br />letter from the Company. <br /> <br />2 <br />