PROJ00454

• Contract/PO #: C153832
• Contractor Name: DeWeese-Dye Ditch and Reservoir Company
• Contract Type: Loan
• Water District: 12
• County: Custer
• Bill Number: HB 98-1189
• Loan Projects - Doc Type: Feasibility Study

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Feasibility Report for Dam Safety Modifications to DeWeese Dam
April 22, 1997

23

6. FINANCIAL PLAN

6.1 ESTIMATED PROJECT COSTS

Estimated project capital costs for Alternative No, 1 and Alternative No, 2 are described in
Section 3,6, and are summarized as follows:

Alternative No.1

$750,000 (Jan, 1997)

Alternative No, 2

$800,000 (Jan, 1997)

These estimated costs include allowances for all engineering, permitting, and construction costs
associated with design and construction of the proposed dam safety modifications. As discussed
in Section 3,6, project cost estimates were not developed for Alternative No, 3.

The estimated project capital costs for Alternative No, 1 (crest replacement) were used for the
financial evaluations presented in the following paragraphs, This alternative has been identified
'as the preferred alternative for the dam safety modifications (Section 3,8).

6.2 ESTIMATED COST ESCALATION

The estimated project costs developed in Section 3,6 are for January 1997 cost levels; however,
project construction is not expected to begin until 1998 or 1999. For the financial evaluations
presented in this report, the estimated project costs will be escalated to allow for expected
inflationary cost increases.

Information on construction cost trends reported by Engineering News-Record (ENR) indicates
that construction costs nation-wide have escalated at an average rate of about 2,7 percent per
year over the last 10 years, and about 3,1 percent per year over the last 5 years, These rates are
based on ENR's Construction Cost Index, as reported periodically,

For use in this report, we have assumed that construction costs will escalate at an average rate
of3,O percent per year over the next two to three years, Actual cost escalation rates may differ
significantly from those used in our evaluations,

6.3 ESTIMATED OPERATING, MAINTENANCE AND REPLACEMENT COSTS

Operating, maintenance and repair costs for the preferred dam safety modification alternative
are expected to be negligible, The proposed alternative will have no impact on the existing
operation of the dam, and there are no new major pieces of equipment which would require
planned replacement. If properly designed and constructed, the crest replacement concrete

96006\REPORTS\FEAS\TEXT.NEW

~ GEl Consultants, Inc,