CT2015-017 Increase Approval Letter

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Bergen Ditch and Reservoir Company Consent Agenda Item 3a January 25-26, 2016 Board Meeting (Updated January 27, 2016) Page 2 of 4 Background The Company's water system was developed in the late 1800s to provide agricultural irrigation water to a service area located in central Jefferson County. There has been a shift to municipal water use since the 1960s as a result of urbanization. Today, the primary use of water is for park and golf course irrigation by public agencies, with only a limited number of private shareholders using the water for residential landscape irrigation. The Company uses Bergen Ditch to divert water off Turkey Creek and deliver it to shareholders through a series of open and piped ditches, reservoirs, pumps, and pipelines. The Company owns three reservoirs: Bergen No. 1, Bergen No. 2, and Poly Deane. Altogether the Company has a storage capacity of 1,828 AF with Bergen No. 2 accounting for 40% of the total storage (726 AF). Bergen No. 2 was constructed in 1874 and its dam has a history of slumping and seepage issues. Embankment and drain repairs were documented in 1925, 1943, and 1947-1949. In 1999, the overflow spillway was rebuilt to bring the spillway into compliance with SEO guidelines. The dam's outlet operator failed in 2007 and temporary repairs were made. Ongoing SEO inspection reports have monitored seepage, stability, erosion, and outlet concerns. In 2012 the SEO recommended the Company rehabilitate the dam or face the possibility of a storage level restriction. Water Rights The Company owns multiple direct flow and storage rights. Water rights impacted by this Project include: TABLE 1: IMPACTED WATER RIGHTS Name Amount I Appropriation Date ; Adjudication Date Bergen Ditch 12 CFS 5/1/1874 2/4/1884 Bergen Ditch 26.89 CFS 9/6/1878 2/4/1884 Bergen Ditch 4.01 CFS 9/6/1878 2/4/1884 Bergen Ditch 128 CFS 10/24/1885 9/24/1935 Bergen No. 2 Res 574 AF 5/1/1874 2/4/1884 Bergen No. 2 Res Enlgmt. 316 AF 3/1/1884 9/24/1935 The Company's annual average of water delivered to shareholders is 628 AF, or 1.56 AF/share. Project Update The original loan was approved in November 2012 and was based on an engineer's estimate of construction cost from a feasibility-level design. Final design has since been completed by Jim Ferentchak, P.E. with W.W. Wheeler and Associates, and the construction plans and specifications received final SEO approval in May 2015. The Project went out to bid in the winter of 2015 and American West Constructors, LLC was the low bidder at just over $1.9 million. This bid was in excess of the Project budget and so the Company, Contractor, and SEO worked together to identify cost savings. In April 2015, a negotiated bid price of $1,755,800 was accepted, which was $142,800, or 9%, more than the engineer's estimate. Construction began in July 2015. The substantial completion walk through with the SEO office occurred on November 5, 2015 and a final walk through occurred on December 17, 2015. Site cleanup and seeding will occur in spring 2016. The current construction cost estimate is $1,805,830 and includes all change orders. The largest change order cost increase was an adjustment of final earthwork quantities because the depth to competent bed rock was greater than anticipated, resulting in additional fill. In all, change orders totaled 3% of the negotiated final bid.