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be encased in concrete to minimize the potential for ice damage. A new gate shack will be installed at the <br />crest of the dam to house operations. Power and a SCADA system will be run to the gate shack and the <br />system will be configured to facilitate both local operations at Milton Reservoir and remote operations <br />from FRICO's office in Brighton. <br />This alternative would meet some of FRICO's objective by replacing the updated headworks and allowing <br />upstream operations of the reservoir. It would not include any repairs to the aged steel lined conduit <br />section. <br />Given the progression of degradation of the steel lined section of the outlet pipe, it is believed that these <br />sections will continue to deteriorate. We anticipate that in the near future integrity of the steel lined <br />sections will become compromised. Failure of the outlet conduits could allow water from within the <br />conduits to exit into the adjoining soil, creating the potential for erosion of dam embankment material, <br />known as piping. Piping could result in sink holes developing in the dam or ultimate, if unattended, <br />failure of the dam. FRICO would therefore be forced to drain the reservoir in an emergency condition if <br />the outlet conduits were allowed to fail. <br />Failure of either the outlet conduits would result in an emergency draining of the lake, causing FRICO <br />significant monetary losses, and could potentially lead to dam safety related issues. <br />Our opinion for the probable cost for Alternative No. 2 project is $630,192.80 as shown below on Table <br />1. <br />11 <br />