C150187 Feasibility Study

• Contract/PO #: C150187
• Contractor Name: Young Creek Reservoir Company
• Contract Type: Loan
• Water District: 40
• County: Delta
• Loan Projects - Doc Type: Feasibility Study

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9I\C.

SMITH WILLIAMS CONSULTANTS, INC.

Collateral: As security for the CWCB loan, the Young Creek Reservoir Company can pledge the debt
service portion of future assessment income for repayment of debt currently estimated at $190.20 per
share. It should be noted that the cost of assessments has not increased self-securing the Surface Creek
Bank loan due to the anticipation that a CWCB loan would be available once rehabilitation actions were
identified and that the CWCB loan would cover a portion of the loan balance as cited above. It should be
noted that the Bank Loan has been secured over the last three years to pay for engineering and
rehabilitation work. Once the construction is complete, the increase in assessment cost will be
established in the amount shown on Table 2.

Economic Analysis

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The economic benefit of the project is considerable. The Young Creek Reservoir Company estimates
crop loss impact without the water of $3,125 per acre on 160 acres of fruit trees and $700 per acre on
240 acres of row crops. In addition to crop loss if the crops die replacement cost is estimated at 10,000
per acre for fruit and 1,000 per acre for row crops. Based on these numbers the short-term damage
associated with crop loss only would be approximately $668,000. Using an estimated total project cost of
$217,125.69 to cover design, construction of the rehabilitation, and construction oversight, the project
cosUbenefit ratio is $668,000 divided by $217,125.69, or 3.08. If lack of water results in not only crop loss
but plant mortality the damage could be in excess of $2,500,000 and the corresponding cost benefit ratio
would be 11.51.

Social and Physical Impacts

The project will have no significant social impacts, since it will ensure the continued operation of Young
Creek Reservoir 1-2. Physical impacts associated with the project will also be minimal since construction
disturbance will be for all practical purposes, limited to the reservoir footprint. The construction will occur
during the dry season, once irrigation is complete thereby eliminating impacts to the agricultural needs
that the reservoir satisfies. The rehabilitation will not change the size of the reservoir; it is simply meant to
allow full containment within the reservoir.

Conclusions

1. The Young Creek Reservoir Company is a nonprofit Colorado corporation with the ability to enter into
a contract with the CWCB for the purpose of attaining a construction fund loan.

2. Rights-of-way easements and access are adequate for the construction of the project.

3. Permits required for construction will only involve a U.S. Forest Service temporary use permit in the
event that adequate construction materials cannot be generated from within the basin area. This
temporary use permit application is currently in process with the U.S. Forest Service in Delta County,
Colorado.

4. The project will provide continued delivery of irrigation water to Young Creek Reservoir Company
shareholders. The total estimated cost of the project is $217,125.69, which the Young Creek
Reservoir Company is seeking solely from the CWCB construction fund.

5. The Young Creek Reservoir Company is eligible for a loan from the CWCB since the emergency
condition is not the result of negligence in operation or maintenance of the infrastructure, and the
water supplied from the reservoir is solely for agricultural use.

Young Creek Reservoir 1-2
Reservoir Rehabilitation Feasibility Study
September 2004

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