PROJ01944 ‎(2)‎

• Contract/PO #: C150193
• Contractor Name: Dolores Water Conservancy District
• Contract Type: Loan
• Water District: 34
• County: Montezuma
• Loan Projects - Doc Type: Approval Letter

ST.A TE OF COLORADO

Colorado Water Conservation Board

Department of Natural Resources
1313 Sherman Street, Room 721
Denver, Colorado 80203
Phone; [phone]
FAX; [phone]
www.cwcb.state.co.us

MEMORANDUM
(Updated February 9, 2005)

TO:

Colorado Water Conservation Board Members

Bruce Johnson, P.E. Q.;S~' (
Mike Serlet, P.E., Chief(~ )
Water Supply Planning and F ance Section

January 14, 2005

SUBJECT: Agenda Item 20a, January 25,.26, 2005 Board Meeting
, .Water Supply Planning and Fioance Section - New Loans
Dolores Water Conservancy District - WETP ACK II

FROM:

DATE:

Introduction

Bill Owens
Governor

Russell George
Executive Director

Rod Kuharich
CWCB Director

Dan McAuliffe
Deputy Director

The Dolores Water Conservancy District, acting by and through the Dolores Water Conservancy
District Water Activity Enterprise (DWCD), is applying for a $3,323,180 loan from the Severance Tax
Trust Fund Perpetual Base Account to construct pumping plant and pipeline facilities to provide water
to irrigate approximately 2200 acres, as part of thel WETPACK project (Water for Everyone Tomorrow
Package.) The estimated total cost of the project is $3,692,000. See attached Project Data Sheet.

The new loan would replace the unused remaining amount on the existing $5,461,200 (3.5%, 30-year)
loan contract approved in 2002. This loan is secun~d by an established annuity with MBIA, Inc. that will
provide $296,333 per year for loan repayment beginning in 2008. To date the DWCD has drawn
$2,052,900 for water purchases, and anticipates an additional draw of $477,100 for the Sandstone
West Project, for a total of $2,530,000. This would leave $2,931,200 remaining on the existing loan.
Because of cost increases and drought-related delays, as well as DWCD's continued desire to
maximize the project's irrigated acreage, they are requesting a new loan of $3,323,180 (an increase of
$391,980 over the remaining loan amount), at the current interest rate of 2.5% for 30 years. The new
loan interest rate would allow both loans to continue to be secured and repaid by the existing annuity.
The existing loan would be closed out at $2,530,000.

Backaround

The Dolores Project (Project) in southwestern Colorado is a multiple purpose water resource project
constructed by the U.S. Bureau of Reclamation (USBR) and operated by the Dolores Water
Conservancy District. The primary facility of the Project is McPhee Reservoir which stores flows of
the Dolores River for use by Project water users. Project construction has been completed and
McPhee Reservoir has been fully allocated to specific uses and lands through contractual
arrangements. The Project, however, is not able to meet all of the water demands of project
beneficiaries from McPhee Reservoir. The ProjE~Ct delivers approximately 130,000 acre-feet (AF)

Flood Protection. Water Supply Planning and Finance. Stream and Lake Protection
Water Supply Protection. Conservation and Drought Planning