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Introduction and Project Need <br /> The Greeley Irrigation Company (hereafter referred to as the Company or GIC), with <br /> company offices located in Greeley, Colorado and irrigation service areas within the City <br /> of Greeley and parts of Weld County, operates a canal commonly known as the Greeley <br /> Canal No. 3. The canal has operated for more than 136 years for the benefit of the GIC <br /> shareholders. <br /> The Greeley Canal No. 3 canal was originally constructed in 1870 by the Union Colony. <br /> Enlargements of the canal with associated additional appropriations of water were made <br /> in the period from 1871 to 1873. In 1875, the Union Colony deeded an undivided 3/8ths <br /> interest in the canal to the then Town of Greeley and the canal was then owned in joint <br /> tenancy by the Union Colony and the Town. On July 15, 1882, the Greeley Irrigation <br /> Company was incorporated and on August 3, 1882, the Union Colony quit-claimed its <br /> remaining 5/8ths interest in the Greeley Canal No. 3 to the Greeley Irrigation Company. <br /> At that time, GIC then assumed all obligations of the Union Colony as related to the <br /> canal and the water rights, and this joint ownership of Greeley Canal No. 3 remains in <br /> effect to the present time. <br /> Greeley Irrigation Company diverts water from the Cache la Poudre River in Colorado <br /> Division of Water Resources' Water District 1, Division 3. The river diversion and <br /> headworks is located on the south bank of the river in the southeast quarter of Section <br /> 32, Township 6 North, Range 66 West, 6th PM. Generally, the service area of the canal <br /> is irrigated lands within the City of Greeley and east of the City of Greeley. The canal <br /> terminates east of the City of Greeley approximately 12 miles downstream of the river <br /> diversion. <br /> Over the course of the past 18 months, the Company has been considering a number of <br /> phased improvements to the canal which can be characterized as: <br /> * Repairs to, and partial replacement of, the river diversion. <br /> • Piping or lining of portions of the canal. <br /> • Consideration of canal automation using supervisory control and data acquisition <br /> (SCADA) equipment. <br /> • Tree removal and tree pruning. <br /> a Canal realignment, reshaping, and straightening. <br /> a Removal or repair of selected headgates. <br /> a Installation of new headgates. <br /> The improvements are, in effect, the first steps of phased canal modernization. These <br /> considered improvements, as proposed herein, would have the overall effect and benefit <br /> to the GIC shareholders of: <br /> • Improving overall canal operations and operational efficiency. <br /> • Increasing consistency of shareholder headgate deliveries. <br /> Decreasing operational liabilities. <br /> Reducing unnecessary operational spills. <br /> The improvements under consideration have been listed and prioritized by the <br /> Company's Board of Directors. The Company intends, through the accompanying loan <br /> Aqua Engineering, Inc. Greeley Irrigation Company, Feasibility Study <br /> December 2006 - 1 - <br />