C150208 Feasibility Study

• Contract/PO #: C150208
• Contractor Name: High Line Canal Company
• Contract Type: Loan
• Water District: 17
• County: Otero
• Loan Projects - Doc Type: Feasibility Study

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Rocky Ford High Line Canal CO
P,O, Box 800
Rocky Ford, CO 81067

August 12,2005

Kirk Russell, P.E.
Colorado Water Conservation Board
1580 Logan St, Suite 750
Denver, CO 80203

Dear Mr. Russell,

Financial Analysis

The High Line Canal Co is requesting a loan with ewCB for the $454,500.00 for replacement of Smith
Siphon, which is 90% of the total estimated cost of $505,000.00. In our Financial Statement and
proposed budget of 03 and 04 we assessed the shares $16.00 per share for siphon repairs and again
in the 04 and 05 budget years. We have $72,000.00 saved for use as our 10% of total cost if the loan
is approved. At the current pledge of $16.00 per share it will take 12 years to accumulate enough
money to repair the siphon without inflation.

Replacing the siphon at this time is a good insurance policy for the shareholders against loss of income
due to failure of the siphon. A pledge of $12.90 per share for Twenty (20) years at and interest rate of
2.5% amortized with annual payment of $29,122.83, will keep our budget and assessments near
$250.00 per share.

During the past two years shareholders of the High Line Canal Co have participated with Aurora to
lease water. The rate paid by Aurora was $5280.00 per share. The water must be deliverable to the
acreages dried up for Aurora to receive credit for the water leased. Future leases are anticipated, this
adds to the importance of replacing Smith siphon. With 213rd of the share laying below Smith the
economic impact using the Aurora figures would be $2,933,626.08.

Included in the design for the new siphon is a trash cleaner which will help to lessen the cost of
maintenance to the siphon by reducing the man hours, wear and tear on equipment. currently needed
to clean out trash and debris at the intake end of the siphon.

Credit worthiness: The High Line Canal Co during the Annual meeting in December presents a
proposed budget for the ensuing year including the assessments, with payments to be paid in full by
March 1St. Currently, the High Line Canal Co has no long term debts. In a recent appraisal of canal
companies in the Arkansas Valley, conducted for Otero County, the High Line Canal appraised value
was $56,000.00 per share.