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Loan Feasibility Study for <br />Raw Water Acquisition and Utilization <br />Page 11 <br />6.1.2 Evaluation Factors Used for Water Utilization Projects <br />Projects for the utilization of the Pleasant Valley Ditch water right purchase were originally screened <br />in the preliminary screening process described in Section 4 above. Through the preliminary <br />screening process, projects meeting most or all of the evaluation factors described below were <br />retained for further consideration. To further evaluate the projects retained from the preliminary <br />screening, the District evaluated the extent to which the selected projects met the evaluation factors. <br />Evaluation factors used to identify the best project for the utilization of the Pleasant Valley Ditch <br />water right include the following: <br />1) The selected project should satisfy the District's base demand for water. <br />• For this project, the base demand for water is defined as the in- building use. Water <br />used for outside irrigation is not considered part of the base demand. <br />2) The selected project will improve the reliability of the existing system. <br />• The District defines reliability as being available on an as- needed basis. <br />3) The selected project will allow the District to diversify its water supply to include different <br />water sources. <br />• Diversification is achieved by having multiple sources of water. A new source of <br />water outside Beaver Creek is desirable. <br />4) Incorporation of the selected project into the District will have a minimal impact on the <br />existing water treatment and distribution system. <br />• It is desirable to minimize the impact of changes to the treatment of raw water as a <br />result of changes in water quality. <br />5) The selected project will be owned and operated by the District with little to no reliance on <br />outside parties. <br />• It is desirable to reduce the dependence on BPW. However, due to the design of its <br />current water supply system, the District recognizes that it can not eliminate its <br />coordination with BPW all together. <br />6) The selected project will be chosen and designed to minimize environmental impacts. <br />• It is desirable to reduce the level of environmental impacts and thus the number of <br />environmental permits required. <br />7) The selected project will allow for the ability to expand the system in the future. <br />Leonard Rice Engineers, Inc. August 2006 — 1018PEN05 <br />GMS, Inc. <br />