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Fort Morgan Reservoir and Irrigation Company <br />September 9, 2009 (UPDATED September 16, 2009) <br />Page 4 of 6 <br />Agenda Item 7a <br />Alternative No. 3(Selected Alternative) was selected because the Company determined that by <br />building a pipeline and recharge ponds, it could meet its goal of returning water to the South <br />Platte River to meet augmentation requirements. After review of different locations for a <br />possible pipeline project, the selected location was determined to be ideal due to property <br />ownership, land topography and land characteristics, and the ability to re-divert excess credits. It <br />was also the most economically feasible option. <br />The Project involves installing one 24" pipe from the South Platte River extending three miles to <br />recharge ponds on Groves Farms' land; installing two pumps to pump water from the river <br />through the pipeline; installing one augmentation well and pumping equipment near Groves' <br />ponds to pump water back to the river; and installing seven recharge/augmentation ponds (with a <br />surface area of approximately 95 acres) on Groves Farms' land. This system will allow the <br />Company to recapture and re-time the Company's excess augmentation credits that accrue to the <br />South Platte River. Through the new pipeline, new junior diversions may be made and delivered <br />to these new ponds on the Groves Farms' property. These junior diversions will produce <br />augmentation credits that will accrue to the South Platte River and may be used immediately for <br />augmentation or may be re-timed. <br />The Company will likely re-time water between November and March. Groves Farms will use <br />the Project at different times when there is no ca11 on the South Platte River or when freezing <br />weather removes calls because senior ditches cannot divert. <br />The Company has decrees for its augmentation plan and is seeking decrees for additional <br />recharge water rights. Groves Fatms is seeking a decree for junior water rights and the <br />augmentation plan that it operates. <br />Pending loan approval, the Project will be completed within 12-18 months. The Company <br />estimates that final design will be complete within 90 days, pipeline construction will be <br />complete within 150-200 days, river pump equipment installation and testing will be complete <br />within 90 days, augmentation well and pump installation will be complete within 60 days, pond <br />construction within 100 days, and final survey complete within 220 days. Some of the work will <br />be completed simultaneously; so the total construction period is 220 days. <br />TABLE 1 <br />PROJECT COST <br />Construction $ 2,036,500 <br />En ineerin $ 175,000 <br />Contin enc $ 177,000 <br />TOTAL $ 2,388,500 <br />