LPPD000391

• Contract/PO #: C153715
• Contractor Name: Lower Arkansas Water Management Association
• Contract Type: Loan
• Water District: 67
• County: Prowers
• Bill Number: SB 96-124
• Loan Projects - Doc Type: Feasibility Study

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March 1 996 Final

7.

LAWMA's dues will need to increase in the future as the result of repaying the loan to
the CWCB. The amount of the increase will depend on the repayment terms approved
by the CWCB. With repayment over 40 years at an interest rate of 2 percent, the
increase in the dues schedule will not be significant. With repayment over 30 years
at an interest rate of 4 percent, the increase will be almost 40 percent. LA WMA has
already raised its dues every year since 1993 and has already received considerable
complaints from its members. Further cost increases can be expected to cause a drop-
off in LAWMA membership. Because it is likely that some of these dropouts would
immediately reduce pumping, it is possible that there will be an increase in the cost to
the remaining LAWMA members and problems associated with enforcement of the
Rules and Regulations. Ideally, some reasonable balance would exist between the ease
of compliance (low dues) and the severity of enforcement (FTE costs).

8.

LAWMA has requested of the CWCB loan terms more favorable than is standard with
loans for irrigation projects. In the opinion of this consultant, the State will derive
some substantial benefits from the successful implementation of LAWMA's
augmentation program. Included among these benefits are the following:

. There appears to be little question that the additional costs that will be
associated with well augmentation in the Arkansas Valley will cause a decline
in the agricultural economy, with the level of the decline being a function of the
augmentation costs. Consequently, more favorable loan terms will reduce the
decline in the agricultural economy in the LAWMA area, and conversely the less
favorable terms will increase the decline.

. LAWMA's leadership in attacking the well problem has been beneficial to the
State. LAWMA has participated and contributed in various meetings of the
Arkansas River Coordinating Committee. It has been supportive of the State
Engineer's efforts relating to both the 1994 Well Measuring Rules and the 1996
Amended Rules and Regulations. Most importantly, it began early on to develop
a well augmentation program and acquire water therefor. This leadership has.
already manifested itself with a very low rate of opposition to the Rules and

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