PROJ01868 - Laserfiche WebLink

Home Browse Search

. . DISCUSSION Staff finds no reason why the project would not be technically feasible. The dam structure is apparently sound and water quality will be tested before any water is released to the Eagle River Basin. Testing will not resolve any water quality problems but would prevent the investment of Board funds if significant problems are detected. The water right.s filings involve junior rights for the reservoir and some fairly complicated exchanges. And, as noted above, subordinations must still be obtained from holders of conditional decrees for some major water projects. Assuming those subordinations can be obtained, however, it appears likely the project would have a firm yield of about 2,100 acre-feet. The lack of any definitive financial information for Vail Associates leaves us in the position of being unable to draw a conclusion of financial feasibility with respect to the payment capacity of all of the project participants. This means only that we have insufficient information and does not imply that V 3.iI Associates does not have the capacity to participate in the project. . As collateral for the loan, the participants would pledge their shares in the Eagle Park Reservoir Company to the extent of 1,500 acre-feet of firm yield. For a total loan amount of $8.5 million, the implied value is $5,667 per acre-foot. The estimatea costs per acre-foot of firm yield for several other projects constructed within the last ten years are given in Table 3 for comparison. The implied value for Eagle Park is significantly higher than the Stagecoach and Wolford Mountaihprojects but less than Clinton Reservoir. TABLE 3. Comparative Costs per Acre-Foot of Firm Yield EstImated Firm Yield Cost per Acre-Foot . Project Capital Cost (Ac-Ft) of Firm Yield Clinton Reservoir $8.9m 1,200 $7,400 StaoecoachDam and Reservoir $17.5 m 9600 $1,800 Wolford Mountain $28.0 m 28,000 $1,000 Finally it should be mentioned that the proposed project represents an opportunity for the use of a reclaimed mining site and the development of a water storage project in an area with virtually no environmental impact. In addition, the project would provide water to meet the needs of a number of entities at the present time and provides the basis for an ongoing dialogue among competing water rights claimants for a comprehensive settlement of issues in the Upper Eagle River Basin. RECOMMENDA nON . Staff recommends: (1) that the Board grant final approval of the applicants' 1996 Construction Fund loan request for $3,125,000 for the Eagle Park Project at a lending rate of 5.75 percent for a term of 30 years, and (2) that the Board recommend to the General Assembly a Construction 5