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Arkansas Valley Conduit November 13-15, 2006 Agenda Item10a Feasibility Studies . The SECWCD has completed a preliminary feasibility study, which includes the previous studies referenced above. Staff considers the submitted feasibility study to be preliminary, as it is not possible to answer a number of significant questions related to the project at this time. These include: . Federal 80%/20% (federal/local) cost-share authorization · Federal funding appropriations for 80% of project cost · Institutional questions pertaining to project design, ownership, and operation of the A VC . Project Schedule - permitting, design, construction . Final Financial Program - including Participant Funding Agreements In accordance with the CWCB Financial Policy #2 (Feasibility Study), the CWCB, pursuant to Section 37-60-122, C.R.S., requires that all projects have a completed feasibility study prior to loan consideration by the Board. In those cases where it is impractical to complete the study prior to Board approval and/or General Assembly authorization, the Board may consider a conditional approval. This approval shall be conditioned upon completion of a feasibility study, in accordance with CWCB guidelines, by a specified date. In no case will a CWCB loan contract be executed without a completed feasibility study. The project sponsor will be required to complete the feasibility study to the satisfaction of the CWCB Director or his designee by an appropriate date recommended by the CWCB staff and approved by the Board. Southeastern Colorado Water Conservancy District District - The District was created under Colorado law on April 29, 1958, for the purpose of . developing and administering the Fryingpan-Arkansas Project. The District includes parts of 9 counties, and extends along the Arkansas River from Buena Vista to Lamar, and along Fountain Creek from Colorado Springs to Pueblo. It makes supplemental water available to approximately 280,600 acres of irrigated land, as well as municipal and domestic water suppliers to the District's approximately 600,000 constituents. The District is the legal agency responsible for repayment of the reimbursable costs of the Fry-Ark Project and is responsible for administering the distribution of water obtained through the project. The initial repayment obligation of the District was $132,237,4 78 with a maturity date of 2032. The remaining amount as of December 31. 2005 is $85,796,075 with an annual payment of about $5,000,000. Revenues to meet the annual payments are provided by an ad valorem mill levy applied against property in the District. Property tax revenues are about $5,400,000 per year, out of an approximate $12,000,000 annual budget. The District has a 15-member Board of Directors, appointed by the State District Court system and serving 4-year terms. The Fountain Valley Authority is a separate entity responsible for a pipeline constructed to deliver water to Colorado Springs and the surrounding area. Enterprise - In 1995, the District created the Water Activity Enterprise for the purpose of pursuing, establishing and continuing water activities as a business, separate and distinct from the District's governmental activities, and specifically to administer the sale and management of water, including the Fry-Ark Project return flows. Its boundary is the same as the District, and the Enterprise is authorized to incur debt. Currently, its role has expanded to include the PSOP (Preferred Storage Options Plan) and the AVC. The Enterprise, a business function of the District, is the sponsoring agency for the A VC project, and is acting as the oversight agency for the District and the Conduit participants. The Enterprise itself has no taxing authority, but will function as the business entity to Ie handle the process leading up to and the actual construction of the conduit, and collecting from participants and payment of the loan to the CWCB. Page 4 of 12