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SECTIONONE <br />1.1 PROJECT PURPOSE <br />Introduction <br />The purpose of the Panama Reservoir Project is to enhance the means for the Company to <br />continue providing irrigation water to shareholders through water right exchange and reservoir <br />pumping. <br />The Company has an exchange arrangement whereby they release water from Panama Reservoir <br />for delivery to Godding Ditch, Rural Ditch, and other users in the Idaho Creek vicinity (Lower <br />Ditch Users). The Lower Ditch Users exchange their Boulder Creek water rights to the <br />Company at the Company's headgate located at 12th Street in Boulder. The Company uses this <br />exchanged water between 12th Street and Panama Reservoir while the Lower Ditch Users receive <br />their water directly from Panama Reservoir. <br />There has been a considerable amount of residential and commercial development within the <br />Lower Ditch Users' service area and as such these developed lands are no longer being irrigated. <br />As a result, the Lower Ditch Users have placed limited calls for these exchanged releases from <br />Panama Reservoir and therefore the Boulder Creek exchange water is not available for <br />Company's shareholders. Pumping water from Panama Reservoir will make this water available <br />to the Company's shareholders. <br />The Company researched the concept of an "internal exchange" of water rights between the <br />Lower Ditch Users and the Company and decided to pursue the pump station option to give the <br />Company better delivery flexibility. The Company's Harsh Heights and the north branch <br />shareholders will receive water pumped from the reservoir, while the remaining Company's <br />shareholders will receive water from the Company's Six Mile Reservoir located near Boulder <br />Reservoir on the Boulder and Longmont diagonal. <br />1.2 PROJECT HISTORY <br />The Company hired Mr. Doug Staver to act as their program and construction manager for the, <br />project. The original design was completed by the National Resources Conservation Service <br />(MRCS). Based on a contractor selection process, Krische Construction (Contractor) was <br />selected to construct the project. The Company contacted URS to prepare a CWCB construction <br />loan application after the design was completed and selection of the contractor. URS had several <br />meetings with the Company, Contractor, NRCS, and CWCB to develop a path forward that <br />~S 1-1 <br />