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<br />.' <br /> <br />Agenda Item 20d <br />March 9, 1994 <br /> <br />2 <br /> <br />forgiven if the project can not proceed. As a practical matter, the emergency spillway and the <br />outlet system require rehabilitation for dam safety reasons, and it is reasonable to expect that at <br />least that portion of the project will proceed regardless. In addition, the plan is to discontinue <br />work on the study, if at any time it becomes obvious that enlargement of the reservoir would <br />be too costly. Thus, expenses will be well controlled. <br /> <br />3. A major issue of project feasibility could be the cost of financing. Table 5 of the <br />Attachment indicates that loan terms of 2 % or 3 % for the project may be necessary to keep the <br />annual cost per acre-foot at a reasonable level. However, there may be sufficient demand for <br />municipal water to make the project feasible, even at a higher unit cost. This will be determined <br />as part of the study. <br /> <br />4. If the Red Mesa Ward Reservoir is enlarged as part of a future construction project, <br />an additional 2900 acre feet of water will be put to beneficial use in Colorado. <br /> <br />STAFF REeOMMENDATION <br /> <br />The staff recommends: <br /> <br />1. That a loan from the Construction Fund in a maximum amount of $15,000 , not <br />to exceed 75% of actual study costs, be approved for the Red Mesa Ward Reservoir <br />and Ditch Company, for a feasibility study to evaluate the construction of an <br />emergency spillway for the Red Mesa Dam, and the enlargement of the reservoir, <br />and <br /> <br />2. That this Feasibility Study loan may be rolled into the Construction Loan for the <br />project and repaid at the same terms established for that loan, or forgiven altogether <br />if it is determined that the project is not feasible, and <br /> <br />3. That the loan be contingent upon review of the Company's financial condition <br />and ability to pay, and upon all standard contracting provisions of the CWCB. <br /> <br />ACT][ON TAKEN BY THE CWCB BOARD <br /> <br />The Board approved the staff recommendation without revision: <br /> <br />1. Approved a loan from the Construction Fund in a maximum amount of $15,000 <br />not to exceed 75% of actual study costs, for the Red Mesa Ward Reservoir and <br />Ditch Company, for a feasibility study to evaluate the construction of an emergency <br />spillway for the Red Mesa Dam, and the enlargement of the reservoir, and <br />