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City of Grand Junction Agenda Item 13a March 16-17, 2016 Board Meeting (Updated March 18,2016) Page 2 of 8 Background The City's water service area is approximately 8.5 square miles and serves 27,100 customers through 9,500 taps. The City owns and maintains a water treatment facility and operates a raw water supply system that consists of 14 reservoirs. Twelve of these are located on top of the Grand Mesa and have a capacity of approximately 5,100 acre-feet. The other two reservoirs are in the lower Kannah Creek drainage and are off-channel with a capacity of 7,900 acre-feet. The two lower terminal reservoirs, Hallenbeck Reservoir No. 1 being one of the two, can supply the City's municipal needs for approximately one year. The reservoirs on top of the Grand Mesa are generally used for irrigation purposes on City owned land and other agricultural land within the basins. The City maintains in reserve a portion of the water in these reservoirs each year for use the following year in case of drought. Hallenbeck Reservoir No. 1 has a storage capacity of 699 acre-feet and is fed by Juniata Reservoir. It is primarily used as a supplemental reservoir for irrigation water for downstream lessees in average to above average water years. It also provides critical drought supply water for the City. Normal operating procedures for Hallenbeck Reservoir No.1 are to fill the reservoir during the winter months with the goal of having it full by April 1. In cooperation with Colorado Parks and Wildlife the City tries to maintain a minimum pool of 200 acre-feet in the reservoir year-round to provide habitat and warm water public fishing opportunities. In 2014 the City developed plans to mitigate seepage through the dam. As the City was in the process of gradually filling the reservoir to its capacity in an effort to fully identify limits of seepage across the downstream face of the earthen dam, the dam developed a longitudinal crack. The crack appeared over a two-day period and was roughly 80 feet in length. An emergency inspection was performed with assistance from the local Dam Safety Engineer from Division 5. The Emergency Action Plan (EAP) was executed, emergency managers from the area were alerted, and water was released from the reservoir in an effort to relieve hydrostatic pressure within the dam. Increased seepage through the embankment around the two toe drain pipes was observed during the drawdown process that resulted in the reservoir being drained entirely as a precautionary measure. Upon completion of the drawdown process, the City selected URS/AECOM to complete a forensic evaluation of the dam. The evaluation included a geotechnical investigation and structural evaluation of the dam. Loan Feasibility Study Bret Guillory P.E., Utility Engineer, City of Grand Junction, prepared the Loan Feasibility Study, titled "Loan Feasibility Study for Hallenbeck Reservoir No. 1 Dam Failure Mitigation Project," dated January, 2016. The feasibility study was prepared in accordance with the CWCB guidelines and includes an analysis of alternatives, preliminary engineering design, and construction cost estimates. Financial reports were prepared by Jodi Romero, Financial Operations Director, City of Grand Junction. Borrower - City of Grand Junction The City of Grand Junction is a municipal corporation created under the authority of Article XX of the Colorado State Constitution and a Charter being adopted September 14, 1909. The City created a Water Enterprise Fund in 1936 to manage and operate the water system. The Water Enterprise Fund is wholly supported by water user fees. The average monthly water bill is approximately $16.50. On average, the City delivers 5,218 acre-feet annually; therefore it is a Covered Entity as defined in §37-60-126(1)(b), C.R.S. (2014) requiring a water conservation plan in order to execute a loan contract with the CWCB. The City is part of the Grand Valley