Exhibit C_2008 Well Site Evaluation (Addendum 1).pdf

Leonard Rice Engineers, Inc.

2000 Clay Street, Suite 300, Denver, Colorado 80211-5119

(303) 455-9589 ♦ (800) 453-9589 ♦ Fax (303) 455-0115

Greg Roush Gregg Ten Eyck Jon Ford Erin Wilson Ed Armbruster Leslie Botham Dennis McGrane Janet Williams

Rick Parsons July 28, 2008

Mr. Tim Mack Public Works Director Town of Frisco P. O. Box 4100 Frisco, CO 80443-4100

RE: Municipal Well Site Evaluation

Dear Tim:

The Town of Frisco (Town) hopes to obtain 400 to 600 gpm from a new well. We have completed our preliminary evaluation of potential well sites. As directed, we focused on five sites belonging to the Town labeled A through E as shown on Figure 1. We evaluated and scored the sites for the following attributes: potential well yield, water quality, pipeline costs, land value, wetland issues, and well head vulnerability. We then ranked the sites based on the sum of their scores. We feel well yield and water quality are the most important variables.

Therefore, we assigned a higher possible score for the well yield and water quality attributes (10 max.) than the others (5 max.).

CONCLUSIONS AND RECOMMENDATIONS

Table 1 shows how the sites rank according to our decision matrix.

Table 1 – Decision Matrix for New Frisco Well Location

Score (10 Max.) Score (5 Max.) Total Rank

SITE

Yield

Potential Water

Quality Pipeline Costs

Land Value

Wetland Issues

Vulner-ability

A 10 10 4 1 2 1 28 5 B 8 9 4 3 3 4 31 1 C 9 6 4 2 5 3 29 4 D 6 7 4 4 5 4 30 2 E 10 1 4 5 5 5 30 2

Based on this ranking process, Site B is the most preferred (total score of 31). However, the total difference in ranking between all the sites is only 3 points (less than 10%). We conclude that none of the sites is clearly better than the others.

We recommend test drilling and sampling program to better evaluate the sites. A test hole program will provide valuable data to: 1) prepare design specifications (well depth, diameter, screen slot size, etc.); 2) estimate potential well yield; and 3) reduce water quality uncertainties

Water Rights ♦ Ground Water ♦ Permitting ♦ Water Resource Planning now and in the future. Since all of the sites have positive attributes, we recommend test drilling at all of them. This data then can be used later to determine additional well sites as needed in the future.

Cost

Golden Eagle Drilling provided us with a verbal cost estimate for test drilling. With engineering, we recommend that the Town budget approximately $80,000 for drilling five test holes before proceeding with the production well. After the test drilling program is complete, it will likely take 9 to 12 months to drill, test, and equip a production well.

AVAILABLE DATA

To conduct this analysis, we utilized previously compiled well depth, yield, and water quality data used to site Frisco Town Well No. 6 in 1995, supplemented by additional well data obtained from the State Engineer’s Office. We compiled both data sets into a new GIS (ArcView) database.

AQUIFERS

An Alluvial Aquifer consisting of sand and gravel exists above bedrock in the study area. Town Wells 1 – 6 are completed in alluvial sand and gravel deposits of fluvial origin along Tenmile and Meadow Creeks. Town Well 7 is completed in glacial sediments that make up the Peninsula. The Alluvial Aquifer has the potential to produce 100 to 600 gpm depending on the permeability and thickness of the aquifer material. Therefore, it is very important to site a new well in a favorable location.

The Bedrock Aquifer exists below the Alluvial Aquifer and is primarily used for domestic purposes. Interconnected fractures store and transmit water in the Bedrock Aquifer. The expected well yield of the Bedrock Aquifer wells is less than 25 gpm.

WELL YIELD

The Town hopes to obtain 400 to 600 gpm from a new well. Potential well yield is proportional to the saturated aquifer thickness and permeability. The saturated thickness is the difference between the well depth and the water table (depth to water).

Well Depth

We used published well depth records from the State Engineer’s database to subjectively determine the relative saturated thickness of the Alluvial Aquifer. Figure 2 shows well depths in the area using different types of data including data from the Town’s current wells 1 – 7 (in green). Red- and black-labeled points are for domestic wells with geologic log data from well completion reports. Red labels shows depths where “bedrock” was recorded on the geologic logs. Black labels represent wells where the depth to bedrock is deeper than the depth of the log description so the depth to bedrock is deeper than the labeled well depth. Unlabeled points are color coded for ranges of reported well depths that may or may not reach bedrock. They are used to assess the general depth of the Alluvial Aquifer if we assume that most wells are completed in the alluvium and the driller stopped at bedrock.

Figure 2 shows that:

• Bedrock was encountered in only a few wells (red labels) located just east of I-70 and north of Rainbow Lake (south side of Town);

• Most wells with logs are between 50 and 100 feet deep and do not encounter bedrock;

• The deepest wells (200-300 feet) are likely completed in bedrock; and

• Town Wells 6 and 7 suggest the alluvium is over 150 feet thick in those areas.

We conclude that there are very few wells that accurately define the depth to bedrock. We believe Sites A, C, and E have the greatest chances of encountering over 150 feet of saturated alluvium. The anticipated well depths at sites B and D are likely between 100 and 150 feet.

Aquifer Transmissivity

Aquifer transmissivity is a measure of aquifer permeability. Wells with a transmissivity of over 10,000 gpd/ft will likely produce 500 gpm on a long-term basis. Transmissivity data is determined from pumping tests conducted on Town municipal wells. Transmissivities for domestic wells were also calculated from test data submitted with Well Completion Reports.

Figure 3 shows that the Alluvial Aquifer transmissivity of Town wells located north of Tenmile Creek is between 14,000 gpd/ft and 30,000 gpd/ft. The transmissivity of the Peninsula Well 7 is approximately 74,000 gpd/ft. The transmissivity values determined from domestic well data are considerably lower, and do not appear to correlate well with the larger diameter municipal well test data. As a result, we do not have much confidence in the domestic well transmissivity values. Therefore, we conclude:

• Well transmissivity data obtained from Town Well pumping tests are generally consistent, and suggests that there is a good chance that the aquifer transmissivity will exceed 10,000 gpd/ft north of Tenmile Creek.

• The transmissivity is highest in the vicinity of the Peninsula Well within the glacial deposit.

• South of Tenmile Creek and west of the Peninsula Well 7, transmissivities derived from domestic wells are low and perhaps not representative. Therefore, there is very little data to evaluate the yield potential of Site D.

• The depth and material description from test holes may be a better indicator of potential well yield than the transmissivity values determined for the domestic wells.

Site Ranking

We believe sites A and E have the greatest relative certainty of producing 600 gpm. There is less certainty at sites C and B (score 9 and 8 respectively). Site D has the lowest certainty (score

6) because there are no high capacity wells in the vicinity.

WATER QUALITY

The Town of Frisco provided LRE with water quality test data in 1997. No recent water quality data is available except for Town Wells 6 and 7. Figure 4 shows the names of water quality sampling points that include several surface water sampling points along Tenmile Creek.

Appendix A contains plots of the spatial distribution of the following water quality parameters:

pH, total hardness, alkalinity, copper, manganese, molybdenum, calcium, iron, total dissolved solids (TDS), and sulfate. The plots generally show elevated levels of metals and TDS in Tenmile Creek and in ground water in the vicinity.

Organic Contamination

Hydrocarbon contamination was detected and remediated in the vicinity (former Amoco site) of Wells 1 and 2. Although the contaminant source has been remediated below State standards, we believe ground water in the area may still have an unpleasant taste and odor.

Well 7 also contains the organic pesticide EDB, which was used by the US Forest Service to kill beetles during the 1980s. The report stated that EDB was used on the Peninsula, but did not reveal any specific locations.

Based on our analysis, we conclude:

• The surface water quality of Tenmile Creek generally has elevated levels of sulfate (456 ppm); iron (0.11 ppm); molybdenum (0.8 ppm); copper (0.95 ppm); manganese (0.15 ppm); total hardness (299 ppm); and total dissolved solids (484 ppm).

• The generally poor surface water quality is caused from mine discharge from the Climax mine located upstream from Frisco. We do not know whether there is seasonal variability in surface water quality.

• Ground water quality within approximately 1000 feet of Ten Mile Creek (including Town Wells 3 and 4) is degraded due to recharge from Tenmile Creek. Ground water quality further than 1000 feet from Tenmile Creek appears to be generally good.

• The City should avoid drilling wells on the Peninsula due to the potential for EDB contamination as seen in Well 7.

• Ground water in the vicinity of Town Wells 1 and 2 may still have petroleum hydrocarbons contamination.

Site Ranking

Because the Peninsula Well 7 has EDB in it, site E scores lowest (Score 1). Well 4 (Site C) has reported elevated TDS levels related to its proximity to Tenmile Creek (Score 6). We believe the water quality at sites A and B have a high probability of being good (Scores 10 and 9 respectively). There is more uncertainty at Site D (Score 7) since there is sparse data in that area.

PIPELINE COSTS

A new well will require an adequately sized pipeline to connect the well to the Town distribution system. The farther the well is away from a suitable pipeline, the more it will cost. The Town also needs to comply with Health Department chlorine contact time requirements. For this analysis, we assume that contact time can be met using oversized or circuitous piping near the well head.

Site Ranking

We believe that each parcel is within 500 feet of a suitable water line. Therefore, we scored all the sites similarly (Score 4).

LAND VALUE

Although the well must be located on Town land, the Town may want to sell, lease, or trade the land to developers (or Forest Service) in the future, while maintaining a permanent easement.

To maximize this potential income, we recommend strategically siting the well along the edge of parcels away from potential parcel entrances. However, future land value is extremely speculative, and once a well and well house have been constructed it would be very expensive to move to accommodate developer plans.

Site Ranking

We scored and ranked the sites based on field discussions with you and Dave Koop. It is our understanding that you felt Site A had the greatest value to the Town for development, so it would be the most risky to locate a well and well house there (Score 1). Well 4 (Site B) is located between two sites that the Town may purchase and next to the cemetery which precludes drilling and pipelines (Score 2). To drill at Site C would likely require purchasing a residential lot and digging up the street which would be expensive (Score 3). There is a better possibility to site a well near the bike path or wetlands along the east or west sides of Site D without interfering with potential development (Score 4). Drilling a new well on the Peninsula (Site E) would be the least expensive from a land value standpoint, since no development is planned (Score 5).

WETLAND ISSUES

Locating a well within a jurisdictional wetland could add significant additional permitting (404 permit) and construction costs such as modeling, wetlands mitigation, and elevating the well head and pump house.

Site Ranking

Sites A and B include significant wetland areas in the parcels which limits the areas where construction can occur (Scores 3), as opposed the remaining sites which do not have significant wetland areas (Scores 5).

CONTAMINANT VULNERABILITY

Well sites are vulnerable to well head contamination which could endanger public health and render the water source useless (ex. Wells 1 and 2) for extended periods. Contamination sources include: urban runoff, hazardous materials spills from tanker trucks, or leaks from underground tanks or pipelines.

Site Ranking

Site A is located near I-25 which makes it extremely vulnerable to tanker truck spills (Score 1).

Site C is located near an intersection and is immediately down gradient from any contamination to the west (Score 3). Sites B and D are located in residential areas up gradient from most of the Town (Score 4). Site D (Peninsula) is located far enough away from vehicle traffic that contamination is unlikely (score 4). Ironically, Well 7, which is located on Site E is currently contaminated with EDB from forest service use. This is an example why contaminant vulnerability is difficult to quantify.

Very truly yours, LEONARD RICE ENGINEERS, INC.

Dennis R. McGrane, P.E.

Principal

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