LPPD000455

• Contract/PO #: C150170
• Contractor Name: North Poudre Irrigation Company
• Contract Type: Loan
• Water District: 3
• County: Larimer
• Loan Projects - Doc Type: Approval Letter

North Poudre Irrigation Company
March 16-17, 2004

Agenda Item 25c

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Alternative 1, No-action alternative - was considered unacceptable because it would mean NPIC
would eventually relinquish valuable storage rights.

Alternative 2, Rehabilitate the dam, outlet works, and spillway - was considered unacceptable
because it could mean the loss of up to 75 acre-feet of permanent storage.

Alternative 3, Rehabilitate the dam, outlet works, and spillway and remove silt - was selected
because it will allow NPIC to retain its decreed water rights at a reasonable cost per acre-foot.

Selected Alternative 3, Rehabilitate the dam, outlet works, and spillway and remove silt -
involves re-grading the upstream face of the dam and adding riprap, re-grading and reinforcing the
downstream face of the dam, adding a blanket and toe drains, enlarging the spillway to
approximately 50 feet in length, replacement of the outlet works (24" diameter), removal of silt to
obtain full capacity, and reconstruction and automation of the inlet diversion structure above the
reservoir on Park Creek.

The Total Project cost is estimated to be:

1.
2.
3.

Construction & Contingency
Engineering and Inspection
Land Acquisition/Easements
TOTAL

$ 600,000
150,000
10.000
$760,000

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The final design is expected to be completed by July of 2004. The reservoir will be drained after the
2004 irrigation seaso'n and allowed to dry, Construction will begin in June of 2085 and be
completed by October 2005.

NPIC is in the process of obtaining easements for flood and spillway rights-of-way. The company
expects to be exempt from Corps of Engineers 404 permitting by Statutory exemption, 33 CFR
Section 323.4(a)3. This will be confirmed with the Army Corps of Engineers.

Financial Analvsis

The total estimated cost of the project is $760,000 and NPIC water ownership is 35% agricultural
and 65% municipal (middle income). Staff is recommending a maximum loan amount of $608,000
(80% of the estimated project cost) for 20 years at a blended interest rate of 3.25%. NPIC will pay
the additional 20% ($152,000) of the project cost through fees assessed to the stockholders. NPIC
will cover any costs that exceed the estimated project cost.

Table 1 is a summary of the financial aspects of the project. A CWCB Loan of $608,000 would
have an annual payment of $45,999 (including the 10% reserve requirement) at the loan terms of
3.25% for 20 years. The CWCB loan will be repaid from increases in the base assessment rate
from $85 to $90 per share. The annual loan cost for the project will be $110.30 per acre-foot,
based on the added storage volume of 417 acre-feet.

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