Cost estimates for the proposed Alkali Creek Dam in Big Horn County have jumped to more than double the original $35 million price tag.

It will take some $70 million to $75 million to build the dam and reservoir, the interim director of the Wyoming Water Development Office told legislators at an August committee meeting in Afton. The anticipated cost has already jumped once — from $35 million to $59 million in 2020. The Legislature appropriated that amount for the project.

Now the price has been revised upward again.

“Obviously, we’re going to need other funding,” Jason Mead told members of the Select Water Committee last month. “To move forward, we really need to figure out the funding first.”

To cover the increase, the office will likely apply for federal funds, Mead said. The probable source is the Bureau of Reclamation’s Small Surface Water and Groundwater Storage Projects Program, he wrote in an email.

Wyoming could be eligible for $15 million to $20 million from that grant program, Mead said. The Bipartisan Infrastructure Law provided a boost to that federal program.

Alkali Creek would be built from scratch on an intermittent stream in the Bighorn Basin above Hyattville. The reservoir would also use water diverted from Paint Rock and Medicine Lodge Creeks. 

As originally envisioned, the dam would be 108 feet high and 2,600 feet long. It would impound 7,994 acre-feet over 294 acres, although there’s a possibility it could be designed to impound another 900 acre-feet, Mead said.

Irrigators would be responsible for paying back $2.1 million in loans, a figure that remains unchanged despite the increase in anticipated costs.

Complex geology, escalating costs

The original estimate for the dam’s cost increased as a result of studies that revealed complex underlying geology and poor embankment material, among other factors. Increasing construction costs also factor in, as they have at a neighboring dam enlargement proposal that stalled after the Water Development Commission rejected the sole, high-priced bid.

That happened earlier this year when the commission rejected a $70-million bid to expand the Upper Leavitt Reservoir, originally estimated to cost $39 million. Inflation, high fuel prices, a COVID-19-restrained supply line and a paucity of workers combined to increase the anticipated cost, lawmakers said.

The Shell Valley Watershed Improvement District is also planning to apply to the BOR program for funding, Mead said.

The Leavitt Reservoir is north of Shell. The proposed Alkali Dam is to its south.

Plans are to rebid the Leavitt project, possibly breaking the construction program into several smaller bid packages to encourage competition, Mead said. No timeline has been set for that, however.

Meantime the state is facing challenges securing necessary easements for the Alkali Dam. Problems have arisen for land under part of the planned reservoir pool and portions of existing ditches that would be enlarged to fill the pool.

“We’ve got new landowners that have moved into the area,” Mead told the Select Water Committee last month. “Some people sold and some people, new people, moved in that weren’t familiar with the project, and it’s been a bit challenging to bring everybody up to speed.”

Landowners who are reluctant are “generally not in favor of easements” or are worried about potential impacts to their property, Mead wrote. Some of their property is irrigated from the two creeks that would be tapped to fill the reservoir but are above the dam’s outlet and wouldn’t specifically benefit from reservoir water.

Project proponents are working to evaluate alternatives that would minimize impacts or provide offsetting benefits, Mead said. “We’re trying to help folks understand that we’re not here to impact their operation, we’re there to keep it whole, if not improve it,” he told the committee.

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