C150228 Approval Letter - Laserfiche WebLink

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Riverside Irrigation District May 16-17, 2006 Agenda Item 11 b . Alternative 3, Purchase RRLC water at GASP auction - This alternative would give RID control of the GASP water through direct ownership. The 46 private rights of Riverside Reservoir were purchased at the GASP liquidation auction (a significant share of the historically used 62 GASP owned rights.) There would be no third party uncertainty with this alternative. Selected Alternative 3, Purchase RRLC water at GASP auction - RID plans to pursue Alternative #3. Only by purchasing the 46 private rights can RID ensure the control they are looking for. Alternative #3 prevents third party uncertainty and gives RID perpetual control of the water. The Total Project cost is estimated to be: 1. 2. 3. Planning and Engineering "Bridge" Financing Cost Water Purchase TOTAL $ 500 5,000 1,632.500 $1,638,000 Schedule - Following the GASP auction on February 9, 2006, RID closed on the 46 Private Rights on February 23, 2006, using an interim loan from Bank of Colorado in Brush. This loan will be paid off using proceeds of the CWCB loan, as soon as the State contract process is complete. Appraisal - In accordance with CWCB Loan Policy #8 (Purchase of Water Rights), a written appraisal or opinion of value from a qualified water rights appraiser supporting the purchase price, must be submitted prior to disbursal of CWCB loan funds. In view of the fact that the water rights were purchased at a widely advertised public auction, and RID purchase prices were substantiated by prices paid by other bidders, no additional appraisal or opinion of value has been required. Financial Analvsis The total estimated cost of the project is $1,638,000 and RID water usage is 100% agricultural. Staff is recommending a maximum loan amount of $1,450,000 (90% of the estimated project cost) for 30 years at an interest rate of 2.50%. RID will pay the additional 1 0% ($188,000) of the project cost from reserves. Table 1 is a summary of the financial aspects of the project. A CWCB Loan of $1,450,000 would have an annual payment of $76,205 (including the 10% reserve requirement) at the loan terms of 2.50% for 30 years. The CWCB loan will be repaid from increases in the assessment levy from $10 per acre to a minimum of $13.40 per acre. The annual loan cost for the project will be $103.54 per acre-foot based on an annual delivery of the additional 736 acre-feet to RID irrigated lands. Table 1. Financial Summary Project Cost $1,638,000 Number of Irrigators 147 Number of Acres Assessed 22,494 CWCB Loan Amount $1,450,000 CWCB Loan Payment (includes 10% reserve) $76,205 Current Levy per acre (2006) $10 Required New Levv per acre (with CWCB loan) $13.40 Annual Cost of Loan per AF delivered (736 ac-ft.) $103.54 Assessment Levy History: 2006 2005 $10/acre $10/acre 2004 2003 $13.50/acre $13.50/acre Page 4 of 5