C150125 Approval Letter

• Contract/PO #: C150125
• Contractor Name: Surface Creek Ditch & Reservoir Company
• Contract Type: Loan
• Water District: 40
• County: Delta
• Bill Number: MC3
• Loan Projects - Doc Type: Approval Letter

Surface Creek Ditch & Reservoir Company - Dam Rehabilitation
November 25-26, 2002

Agenda Item 20c

The total project cost is estimated to be:

1.
2.
3.

Construction Cost
Engineering Designllnspection and Testing
Project Contingency

TOTAL

$ 241,500
87,000
35.000
$ 363,500

In June 2001, the USFS, Delta County and SCD & RC entered into a cooperative funding
agreement. Of the total cost, the USFS is providing $63,575 in in-kind services related to the road,
and similarly Delta County is providing $34,856 in in-kind services. SCD & RC is responsible for
the remaining costs.

Schedule - At present the core of the dam is mostly reconstructed, but work is most likely over for
the season due to snow, and will resume in Spring 2003.

Financial Analysis

The total estimated cost of the project is $365,500 and SCD & RC water is used primarily for
agricultural purposes, with 6% municipal ownership (low-income.) Staff is recommending a 3D-year
maximum amount of $265,000 (approximately 73% of estimated project cost) for 30 years at an
interest rate of 2.80%.

Alternative financing sources: The Company has investigated alternative financing with the
Surface Creek Bank Center in Cedaredge and has received a temporary financing line-of-credit
(with a credit limit of $215,000) that is due and payable on or before September 10, 2003. The
CWCB loan will be used to payoff the balance on the line-of-credit.

Table 1 is a summary of the financial aspects of the project. A CWCB Small Project Loan of
$265,000 would have an annual payment of $14,490 (including the 10% reserve requirement) at the '
loan terms of 2.80% for 30 years. This represents an annual loan cost of $33.23 per acre-foot,
based on an average annual delivery of 436 acre-feet.

Table 1. Financial Summary

Project Cost $363,500
Number of Shareholders 255
Number of Shares of Stock 810
CWCB Loan Amount (30 years) $265,000
CWCB Loan Payment (includes 10% reserve) $14,490
Current Assessment per share (2002) $70
New Assessments per share $70
Annual Loan Cost per acr~-foot (aver. Annual delivery: 436 ac-ft.) $33.23

Assessments have been raised over the past few years in anticipation of the repairs being made to
Hotel Twin Reservoir. A recent history of annual assessments and proposed assessments is as
follows:

Past Assessments
2000 $ 30
2001 $ 55
2002 $ 70

Proposed Assessments
2003 $70

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