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<br />i 0 " <br />".~ . .. <br /> <br />. <br /> <br />. <br /> <br />Agenda Item 8g, (Updated February 6. 1997) <br />January 29. 1996 <br /> <br />3 <br /> <br />Creek basin is not hydrologically connected to the main stem of the Arkansas River, and the <br />primary value would be to those within the basin, <br /> <br />The HCWUA receives revenues from its members in the fonn of annual membership dues and <br />assessments. The CWCB can take a collateral interest in this stream of revenue, It should be <br />noted, however. that membership in the HCWUA is not mandatory, Well owners may decide <br />not to pay their assessments for whatever reason, However, without payment of membership <br />dues and assessments, wells owned by association members will be shut down by the Sate <br />Engineer. The HCWUA members do not have the option of switching to another well user's <br />association, because no other association can or does cover the Horse Creek basin, <br /> <br />FINANCIAL CONDITION <br /> <br />The HCWUA currently receives about $150K in annual income, the bulk of which goes for the <br />legal and engineering fees associated with negotiating an agreement with the senior surface <br />water rights holders. Debt service on a $825 CWCB loan would be about $30K per year. <br /> <br />HCWUA farmers depend on well water for their existence, Based on 6700 acre-feet annual <br />pumping, the CWCB loan payment of $30K will add about $4,50 per-acre foot, <br /> <br />STAFF RECOMMENDATION <br /> <br />The staff recommends: <br /> <br />I. That a construction fund loan in an amount of $825,000 , not to exceed the <br />actual total cost, be recommended for the Horse Creek Water Users Association, to <br />purchase water rights and to pay the costs of setting up and adjudicating an <br />augmentation plan, and <br /> <br />2, That the financing terms shall be at an annual percentage rate of 2%, for a <br />duration of 40 years, and <br /> <br />3, That loan approval shall be contingent upon completion of the feasibility study, <br />and upon all standard contracting provisions of the CWCB, as determined by the <br />CWCB Director, and <br /> <br />4, That security for the loan shall be a collateral interest in the stream of income <br />derived the Horse Creek Water Users Association membership dues and assessments, <br />the water shares or rights purchased, and one annual payment in the form of CD <br />held by the State Treasurer. <br />