15c

• Board Meeting Date: 7/11/2007
• Description: CF Section - New Project Loans - Montezuma Valley Irrigation Company - May Lateral Pipeline Project
• Board Meetings - Doc Type: Memo

Montezuma Valley Irrigation Company
July 2, 2007
Page 2 of 4

Agenda Item 15c

The Company is looking for funding assistance from Natural Resources Conservation Service
(NRCS) - Cortez Office. NRCS has indicated that salinity program funding between $500,000
and one million dollars may be available. This CWCS loan request has been analyzed assuming
the NRCS funding is not available, It is our understanding that the Project will be constructed
with or without the NRCS funding.

Feasibilitv Study

Jim Siscoe, General Manager, has submitted the Loan Feasibility Study in accordance with
CWCS guidelines. The study includes an assessment of alternatives available for ditch
rehabilitation, The preliminary engineering and cost estimate was prepared by Gerald Knudsen,
PE, of AgriTech Consulting. The study includes MVIC's equipment price list that will be used to
determine progress payments for construction of the Project.

The Montezuma Vallev IrriQation Company

The Company is a non-profit mutual ditch company registered in the State of Colorado in 1920,
There are 1358 share holders and 33,284 shares of stock. The Company has the power to set
annual assessments to be paid by the shareholders and the power to cut off water deliveries to
shareholders that fail to pay their assessments.

The Company provides irrigation water to approximately 46,000 acres of irrigated land in the
service area. The Company's service area is located entirely within Montezuma County. The
Dolores Water Conservancy District owns 170 shares representing 0.5% of the total shares and
The City of Cortez owns 177 shares representing 0.5% of the total shares.

Water RiQhts

The source of water for the Company is direct flow water rights out of the Dolores River. The
water rights diverted at the Company's headgate consist of 9 rights with dates of appropriation
ranging from 1863 to 1905 and totaling 795 cfs. Records indicate that the total average annual
diversions are 128,000 acre-feet. State Engineer's Office records indicate a maximum diversion
rate of 800 cfs in 2000,

Proiect Description

The purpose of this project is to provide a means for the Company to continue providing
irrigation water to shareholders while minimizing the occurrence of future failures or loss of
water via leaks. Four alternatives were considered:

1. The no action alternative
2, Continue with temporary repairs ($1,200 to $4,000 per year)
3. Repair concrete portion of canal ($1.5 million)
4. Place entire canal in pipe ($5.8 million)

Alternative No.1 was considered unacceptable since the Company could not be assured of the
delivery of water to its shareholders. Alternative NO.2 was ruled out because previous repairs