15d

• Board Meeting Date: 7/11/2007
• Description: CF Section - New Project Loans - Town of Hillrose - Water Rights Purchase/Well Augmentation
• Board Meetings - Doc Type: Memo

Town of Hillrose
July 11-12, 2007

Agenda Item 15d

for 38 cfs (September 4, 1882) and 284 cfs (April 15, 1888), as well as an approved
Augmentation Plan (1972).

Project Description

A range of alternatives were considered on how to generate an augmentation supply for the
Town:
1. The no-action alternative.
2. Purchase senior water rights to use and pursue its own augmentation plan.
3. Purchase additional LP & B shares to increase pumping allocation.

Alternative 1, No-action alternative - This was not acceptable. If a project were not pursued,
the Town would remain completely dependent on the LP&B plan and would be subject to
curtailment under the terms of their plan. Curtailment based on the first of the year share
ownership would mean the complete elimination of outdoor watering in Town. This alternative is
not acceptable to the Town.

Alternative 2, Purchase senior water rights and pursue its own augmentation plan -
This alternative is currently used by many municipalities for the very same reason. Most
municipalities like to have control over their augmentation plan and not be dependent on others.
The Town currently owns several shares of reservoir water that could be used for part of this
alternative but additional shares would be required. Engineering and legal services for an
augmentation plan then become the controlling cost of this alternative. The cost of this
alternative is $250,000.

Alternative 3, Purchase additional LP & B shares to increase pumping allocation -
This alternative would most directly address the problem faced by the Town. The purchase of
additional shares within the LP&B Company would allow for an immediate increase in the
amount of pumping by the Town's well. Six shares can be purchased to bring their total LP&B
ownership up to 7.5 shares, and would increase their pumping allocation for this year up to
9.675 acre-feet. This is not a complete supply but is a significant step toward addressing the
Town's needs under drought conditions. The cost of this alternative would $55,000.

Selected Alternative 3, Purchase additional LP & B shares to increase pumping
allocation - The Town has elected Alternative 3. The effects of this alternative are immediate.
The Town will purchase 6 shares of Lower Platte and Beaver Ditch. No change of use is
required, as the Town receives a pumping allocation in the augmentation plan by virtue of
holding LP & B shares.

The Total Project cost is estimated to be:
1. Planning and Engineering Costs
2. Water Acquisition Costs
3. Water Shares Purchase
TOTAL

$ 1,500
5,500
48,000
$55,000

Financial Analysis

The total estimated cost of the project is $55,000. The Town qualifies for the Municipal Low-
Income interest rate, and staff is recommending a maximum loan amount of $49,500 (90% of
the estimated project cost) for 30 years at an interest rate of 3.00%. The Town will pay the
additional $5,500 of the project cost from Town reserves.

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