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<br />-,,~ <br />,,"'. <br /> <br />, . <br /> <br />Agenda Item lOb <br />January 11, 1996 <br />Page Two <br /> <br />PROJECT DESCRIPTION <br /> <br />Currently the Town has very little raw water storage capacity and is concemed about having adequate <br />water supplies during the low-flow winter months as well as being able to provide for future demands <br />which are expected to increase substantially in the next few years. Acquisition and rehabilitation of <br />Bolts Lake would result in raw water storage capacity of about 120 acre-feet in a location which is <br />favorable for supplying water to the Town's system. <br /> <br />The McLaughlin Water Engineers report indicates that the Town has adequate senior water rights and <br />that water is physically and legally available for operation of the proposed project. The Town has <br />provided a letter stating that the Bolts Lake Project will be operated in such a manner that no injury <br />will occur to the Board's instream water nght on Cross Creek. <br /> <br />Bolts Lake was constructed around the turn of the century as a fish-rearing facility. The dam, an <br />earth-and rock- fill structure, was breached in 1994 by order of the State Engineer's Office. <br /> <br />The project involves the acquisition of 150 acres of land, minor repairs to the Bolts Ditch headgate, <br />some improvements to the ditch, raising and improving the dam embankment, and construction of a <br />new spillway. The total estimated cost of the project is $610,000 including an estimated $400,000 for <br />land procurement. <br /> <br />Approximately 65 percent of the land area, 100 acres, will be used for water supply purposes and the <br />remainder for recreation. The eligible project costs then are as shown on the attached summary sheet <br />and total $470,000. The Town is requesting a loan of $360,000 for 30 years, or slightly more than 75 <br />percent of the total eligible water supply costs of the project. <br /> <br />Cross Creek is the Town's only raw water source and there are no other storage alternatives that <br />would merit analysis. A 404 Permit application will be made to the Corps of Engineers and, based on <br />preliminary discussions, the Town does not anticipate any significant permitting problems. It should <br />also be noted that the Town is undertaking an aggressive water conservation program to reduce per <br />capita water demands. <br /> <br />FINANCIAL ANALYSIS <br /> <br />The town is proposing to use $100,000 in Town funds for the project and to finance the remainder of <br />project costs with a $150,000 loan from a commercial bank and a $360,000 Construction Fund loan. <br />Based on Minturn's median household income, the Construction Fund lending rate would be 5.25 <br />percent for 30 years, the standard municipal rate for 1996, resulting in annual payments of <br />approximately $24,100. <br /> <br />In 1995, the Town Council twice increased water rates to generate the revenues needed to pay for the <br />Bolts Lake project and other capital improvements. Residential water rates are expected to increase <br />from the current $31 per month to about $34. Revenue and expenditure projections provided by the <br />Town indicate that the Water and Sanitation Fund revenues will exceed operating costs and debt <br />service over the period of CWCB debt retirement. The Town's Water and ~anitation Fund is an <br />enterprise fund. <br />