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THE <br /> kQOP <br /> "� <br /> A.4 <br /> FARMERS cif � .- ' HIGH I HE <br /> -4 CANAL AND RESERVOIR COMPANY* <br /> October 8,2012, <br /> • <br /> Ryan Edwards,P.E. <br /> Water Project Loan Program <br /> Colorado Water Conservation Board <br /> Department of Natural Resources - <br /> 1580 Logan Street,Suite 600 <br /> Denver,CO 80203 - <br /> Dear Ryan, _ <br /> As we recently discussed, I am writing to request an amendment to the loan approved by the Colorado Water <br /> Conservation Board (CWCB) on November 16, 2010 for the Farmers' High Line Canal and Reservoir <br /> Company (FHL). The loan contract number, for reference, is C150314. FHL had applied to the CWCB for <br /> this loan'to fund several capital projects, including repair and rehabilitation of the main headworks and <br /> diversion dam,repair and replacement of large siphons,development of an engineering master plan, and some <br /> smaller construction items. { <br /> • After the loan contract was signed in early 2011,FHL began drawing on the loan for the engineering and small <br /> projects that had been performed previously, and the FHL's consulting engineer began final design and <br /> permitting for the remaining projects. In October of that year, six prequalified contractors were invited to bid <br /> on the projects. That same month,the FHL was informed that the permit for the headworks and diversion dam <br /> project would require each shareholder in FHL to become a member of SPWRAP. Anticipating the time it <br /> • <br /> would take to obtain the SPWRAP memberships,the FHL Board decided to go forward in 2011/2012 with all <br /> - remaining projects except the headworks and diversion dam project. The headworks and diversion dam project <br /> was tabled until 2012/2013,by which time we hoped to have the SPWRAP memberships and project permits. <br /> The prequalified contractors were taken on a pre-bid field visit in November, 2011, and three bids were <br /> received. For the 2011/2012 projects under the CWCB loan, the bids received ranged from $435,200to <br /> $588,000, as compared to the engineer's estimate of$191,000. Fearing an oversight in the bids, our engineer <br /> negotiated with the contractors for a "best-price" bid, and was able lower one bid to $410,900. The FHL <br /> Board did not think it was prudent.to eliminate essential design components or to use such a large portion of <br /> - the remainder of'the loan for the 2011/2012 projects, which are less critical than the headworks and diversion <br /> dam project;thus it was decided not to award a bid at that time. <br /> You may recall,I notified you last winter of the high bids and the FHL Board's decision to attempt to make the <br /> projects more favorable to contractors by completing our permitting, giving them a full winter construction <br /> season, and allowing flexibility in their approach to the projects; In March, 2012, at the annual FHL <br /> shareholders' meeting,we informed shareholders of 1)their need to join SPWRAP,2)the results of the initial <br /> bidding process,3)and our intent to"re-package"the projects in ways we hoped would bring forth lower bids. - <br /> Since the annual shareholders' meeting, significant effort has been put towards getting the projects permitted, <br /> including helping each shareholder apply for SPWRAP membership. The project design plans were modified <br /> and the scope reworded to aim for lower bids. This time, the projects included the headworks and diversion <br /> dam project and the two main siphon repair projects. <br /> • <br /> 725 Malley Drive Northglenn, Colorado 80233 <br /> Phone 303-451-7604 E-mail hi-line@ecentral.com Fax 303-451-1476 <br />