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<br />., <br /> <br />PROBLEM <br />The total annual requirment for the Gunnison municipal water <br />system for the year 1975 is estimated at 581 million gallons. However, <br />the estimated safe yield of the existing system is only about 450 million <br />gallons per year. The maximum yield is estimated to be from 500 million <br />to 600 million gallons per year. The system is already at a critical <br />stage and is not adequate for the increasing demands. <br />Major expansions of existing water systems pose formidable problems <br />to all Colorado communities, particularly the smaller communities with <br />limited financial resources. There is considerable difficulty in <br />marketing municipal bonds at a reasonable interest rate. Since interest <br />rates are often the determining factor in the economic feasibility of <br />any undertaking, the smaller communities are usually not able to under- <br />take major expansions of their municipal water systems without doubling <br />or tripling the present water rates. One of the problems associated <br />with municipal water expansion is the heavy financial burden which <br />initially must be borne by the present water users. Both politically <br />e.nd economically, the smaller communities experience tremendous diffi- <br />culties in attempting to finance the expansion of existing water systems. <br />CURRENT STATUS <br />In October of 1973, the city of Gunnison submitted an application <br />to the Colorado Water Conservation Board for state assistance in the <br />expansion of its municipal water system. Subsequently, the board <br />entered into a contract with Morcan Engineering Company to prepare a <br />feasibility report for an enlarged municipal system for the city of <br />Gunnison. As a part of the feasibility investigation, a number of <br /> <br />-2- <br /> <br />000848 <br />