PROJ02113

• Contract/PO #: C150066
• Contractor Name: Tilton Lateral, Inc.
• Contract Type: Loan
• Water District: 0
• County: Mesa
• Loan Projects - Doc Type: Approval Letter

Tilton Lateral Inc.
May 21-22,2001

Agenda Item 7a.
(Updated May 31,2001)

Water RiQhts
The source of water for the TLI is 230 shares of Grand Valley Irrigation Company water from
the Mainline Canal. This amounts to 2.38 CFS (one share is 4.675 gallons per minute), and
averages about 960 acre-feet per year.

Proiect Description
Three alternatives were analyzed in the feasibility study:

1. The no-action alternative.
2. Continue to make repairs as needed.
3. Install a new piped irrigation system.

Alternative 2, Continue to make repairs as needed, was ruled out because of the increasingly
high cost of maintenance and because it would not allow full use of the existing water rights.
Alternative 3, Install a new piped irrigation system, was the preferred alternative, since it has
the least overall cost and would allow full use of water rights. The no-action alternative was
considered unacceptable since it means TLI could not provide water delivery to its
shareholders.

Selected Alternative 3 involves construction of a new concrete inlet structure at the UP Railroad
crossing which will establish a head level from which a pressurized piped network will extend
out the 2 main delivery branches. Approximately 2500 feet of old low head pipe and 10,000 feet
of cracked and leaking cement ditch will be replaced with new high-head underground irrigation
pipe. Taps will be provided off the new pipeline to deliver water to the shareholders.

The implementation schedule calls for completion of financing arrangements and final NRCS
engineering design in summer 2001. Construction will be completed in fall 2001.

Financial Analvsis
The total estimated cost of the project is $153,700, and the water is used by the shareholders
for agricultural purposes. Staff is recommending a 30-year loan from the Small Project Account
in maximum amount of $100,000 (approximately 65% of estimated project cost.)

Alternative financing sources: The Company actively sought alternative financing. They were
able to obtain a grant to cover project planning and design (approximate value $8,700), and a
grant to cover a portion of the construction cost ($45,000) from the NRCS under the Salinity
program. TLI also requested a loan from three local banks (Vectra Bank, The Bank of Grand
Junction, and Mesa National Bank) but was turned down because the banks do not provide
long-term fixed rate financing for agricultural projects. Table 1 is a summary of financing for the
project:

Table 1: Project Funding Sources

Funding Source Grant Loan
NRCS Plannino and Design $8,700
NRCS Construction Cost Share $45,000
CWCB Loan $100,000
Total ($153,700*) $53,700 $100,000

(*TU will cover any costs exceeding the estimated project cost.)

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