PROJ02073

• Contract/PO #: C153686
• Contractor Name: Red Mesa Ward Reservoir and Ditch Company
• Contract Type: Grant
• Water District: 0
• Bill Number: HB 95-1155
• Loan Projects - Doc Type: Feasibility Study

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3.1 Financial Plan: A possible plan to repay the costs of the enlargement would include creation
of additional shares as described below. Funds would be raised by sale of the shares to provide
all or part of the 25% of the construction cost which the Company must obtain and an annual
assessment for debt service for the 75% loan provided by the CWCB and any other loans that
may be required. The items below generally describe how the shares would be created and the
assessment for each type of share; the financial plan describes the estimated assessment costs for
each type of share based on the estimated construction cost.

(1) Existing Shares: The 1,172 existing shares will be designated as "A" irrigation shares. These
shares will be operated essentially the same as historically, with water provided on a call basis
with a reduction for reservoir losses. The "A" shares will have priority over the new irrigation
shares but not the new domestic shares. In short years the "A" shares may be the only irrigation
shares to receive water. The cost of the "A" water will generally be adequate to repay the costs
ofthe spillway and outlet tower repair plus a proportion of the operation and maintenance.

(2) Domestic Shares: There will be 330 domestic shares in the enlarged reservoir. The shares
will provide 1 acre-foot of water per share minus 10% in reservoir losses, so that each share is
entitled to 0.9 acre-feet per calendar year. The reservoir will be operated so that the Domestic
Shares will not be shorted in any year and the water can be called at any time. The new domestic
shares will have an initial purchase cost and a yearly charge significantly greater than irrigation
shares.

(3) New Irrigation Shares: A second type of irrigation share will be created called "B" irrigation
shares which will be the remaining capacity of the enlarged reservoir or about 2570 shares.
These shares will receive water after the "A" irrigation shares and the domestic shares have been
satisfied. The water available to "B" shares will be proportioned based on the reservoir content.
For instance, if the reservoir fills, the "B" shares will have the same supply as the "A" shares;
however, if the reservoir does not fill, the water supply for the "B" shares will be proportioned
based on the amount of water remaining in the reservoir after serving the "A" shares and
domestic uses. The reservoir losses will be determined the same as for "A" shares. The initial
purchase cost and annual cost of the "B" Shares will be based on repayment of the cost of the
enlargement plus a proportion of the operation and maintenance costs. The operation and
maintenance allocation will be the same to "A" and "B" shares but the repayment cost will be
different; the "B" share repayment cost will be more per acre-foot because the enlargement is
more costly than the spillway and outlet repairs.

4.0 Previous Studies
The original Red Mesa Dam was constructed in about 1908 to a height of about 40 feet. The
dam was raised to a height of about 58 feet in 1949.

Studies were performed in the mid 1950's to raise the dam to store about 3,000 acre-feet but
construction was never started.

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