El Dorado Irrigation District has agreed to pay $4.45 million to construction company Traylor Brothers Inc. to settle a dispute over a tunnel-drilling contract. The disagreement dates back to 1999, when EID contracted with the company to design and build the Mill-Bull Tunnel. The tunnel is a 2-mile structure that conveys water through a mountain between two creeks. In 2002, the tunnel emerged from a mountain several months later than scheduled, about six feet too low and about 12 feet too far east. EID sued the company in 2003. Traylor Brothers countersued, saying it had remediated the construction problems. A federal jury in Sacramento found in favor of Traylor Brothers in late 2006 and awarded the company nearly $10 million.