PROJ02016

• Contract/PO #: FS0070FX
• Contractor Name: Union Ditch Company, The
• Contract Type: Grant
• Water District: 0
• Loan Projects - Doc Type: Feasibility Study

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Some benefits to metering include:

· The cost per unit of water is the same for all customers and is perceived as
equitable, if the afford ability of water is not an issue among different customer
income levels.
· A flat rate for water (no meters) subsidizes those who use more water by
providing a cheaper cost per unit of water (cost per unit of water is higher for
those who conserve).
· The direct connection between the amount of water used and the cost of the
water provides an incentive for customers to conserve water.
· Metering can provide a benchmark for comparative water use over the long-term.
· The ability to meter water use provides a drought mechanism tool that can be
used with tiered pricing (e.g. the more you use, the more you pay assuming such
an approach is desirable).

Some benefits to not metering include:

· Meter failure, the cost of the meters, and the expense associated with reading,
maintaining, and upgrading meters is not an issue if meters are not used.
· A flat water rate may encourage outdoor water use (thus growth in community
aesthetics) for low income customers, who otherwise may not be able to afford
the increasing rates associated with metering.
· Metering tends to ignore the cost of water relative to the income level of the
users and therefore may not be equitable (those with lower incomes will pay
more per unit of water relative to those with higher incomes).

Fundintl..Q.w>ortunties for Secondary Su~

FundinQ Opportunities with the Colorado Water Conservation Board

The results of the Dual Systems Study, funded by the Colorado Water Conservation
Board (CWCB), indicate many sound reasons why secondary supply is desirable to the
State of Colorado, and communities and canal companies who implement dual systems.
After completion of the study, the principle investigator and other supporting
investigators have presented study results and potential secondary supply projects to
CWCB. Although a secondary supply project has not at this time been submitted for loan
approval to date, every indication is that the CWCB and staff are quite supportive and
ready to loan funds for design and construction of secondary supply systems. Annual
interest rates for these loans would be determined by CWCB during the loan application
process and may be based on an agricultural interest rate or possibly a municipal rate.

A recent meeting with Bruce Johnson with CWCB (August 9,2004) provided additional
information regarding funding secondary supply projects similar to this. Following are
some key points from that meeting:

· The CWCB norm is to lend money to the mutual irrigation company. Loan
security generally comes via a pledge of revenues, the project itself, and the
canal structures such as the diversion structure.

Aqua Engineering, Inc.
November 17,2004

Canal Modernization Study
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