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Grand Valley Water Users Association Agenda Item 17a September 21-22, 2016 Board Meeting(Updated September 22, 2016) Page 2 of 8 Background The Association is the managing entity of the federally-owned Grand Valley Project. The Grand Valley Project facilities include the Roller Dam, the 55-mile-long Government Highline Canal, 150 miles of project-operated laterals, 100 miles of drainage ditches, and a hydroelectric power plant. Water diverted at the Roller Dam irrigates approximately 23,500 acres under the Government Highline Canal and 15,000 acres under the Mesa County Irrigation District, Palisade Irrigation District, and Orchard Mesa Irrigation District (a co-participant in this Project). The water is also used for power production at the Grand Valley Power Plant and to maintain critical habitat stream flows set by the U.S. Fish and Wildlife Service as part of the Upper Colorado River Endangered Fish Recovery Program for a critical river segment called the 15-Mile Reach. This reach of the Colorado River is habitat for the Colorado pikeminnow, Humpback chub, Bonytail, and the Razorback sucker, all listed as endangered fish. Diversions at the Roller Dam for irrigation and hydropower purposes are done so under senior water rights that collectively make up the "Cameo Call." The Cameo Call also assists the state in complying with its obligations under the Colorado River Compact, and in maintaining acceptable lake levels in Lake Powell. The embankment immediately below the Roller Dam is relatively narrow and separates the Government Highline Canal from the Colorado River. This section of canal was constructed around 1915. Over the last 100 years the embankment has slumped, settled and degraded. Occasional erosion within the embankment has led to material loss and sinkholes. As a result of canal degradation, water flow is restricted and the canal cross section has been reduced, causing a reduction in capacity of the canal. The Roller Dam Rehabilitation was listed in the Colorado Basin Implementation Plan as a "Top Priority." Consequently, the Association received a WSRF grant in September 2015 for the Dam and Canyon Facilities Master Plan. The master plan was completed in August 2016. Within the plan, the canal lining Project was identified as the top rehabilitation need. Loan Feasibility Study Angie Fowler, P.E. of SGM, Inc., prepared the Loan Feasibility Study, titled "Loan Feasibility Study - Grand Valley Project - Government Highline Canal Top 500 Feet Lining Project - Canyon Canal Improvement Project," dated July 29, 2016. The feasibility study was prepared in accordance with CWCB guidelines and includes an analysis of alternatives, preliminary engineering design, and construction cost estimates. Frederick Busch, P.E., of the Bureau of Reclamation provided the preliminary design and cost estimates and will ultimately deliver the final design and specifications. The firm of Chadwick, Steinkirchner, Davis It Co. P.C. prepared the financial statements. Borrower - Grand Valley Water Users Association The Association is a non-profit corporation formed in 1905 to manage the Bureau of Reclamation's Grand Valley Project. There are 1,754 shareholders in the Association's service area. Water is allocated to the land through "Subscription for Stock" agreements. These agreements were entered into by the Association and owners of irrigable lands in the early 1900s and were recorded with the Mesa County Clerk and Recorder's office. When land ownership changes, water rights remain with the land and cannot be sold separately. Assessments are billed annually based on allotments for individual parcels of land. Each parcel is assessed a fee per acre, plus an additional assessment of $100 per account to cover the additional costs incurred from work on the Roller Dam, laterals, and other entities. The Association is governed by an eleven-member board of directors. The board has the authority to make and levy all assessments, and has the power to enforce collection of assessments. It also has the power to make and enforce all rules and regulations concerning the distribution of water within the