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<br />Dolores Water Conservancy District - WETPACK II
<br />January 25-26, 2004
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<br />Agenda Item 20a
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<br />per year, including 92,600 AF for agricultural irrigation, 29,300 AF for downstream releases for fish
<br />and wildlife purposes, and has approximately 8000 AF for Municipal/Industrial (M & I) uses. In
<br />addition, the Project stores and delivers non-Project water for irrigation and M & I uses.
<br />
<br />The current WETPACK project was formulated in the WETPACK Reconnaissance Study completed
<br />in November 1998. The intent of the project is to better manage the available resources of the
<br />Dolores Project, and project components include~ providing an additional 3,300 acre-feet of water for
<br />the fishery below McPhee Dam, increasing municipal water supplies, and providing water for the
<br />irrigation of additional lands. In 1999 the DWCD received petitions from landowners to add
<br />approximately 13,000 acres of dryland to irrigation, but it was determined that only about 7400
<br />acres could be reasonably developed. The first priority of WETPACK has been to serve as much
<br />land as possible adjacent to the existing "Full Service" irrigated area from the Dove Creek Canal
<br />facilities. Landowners selected for inclusion pay $250 per acre up front, plus water usage fees.
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<br />In November 2000, the CWCB approved a loan of $7,260,000 to the DWCD for the irriqation portion
<br />of the WETPACK project (90% of the total estimated project cost of $8,067,000.) The terms of the
<br />loan approval were 3.5% (agricultural lending rate) for 30 years. At the time, the project contem-
<br />plated the purchase of 1500 shares of MVIC (Montezuma Valley Irrigation Company) Class B water
<br />shares (6000 acre-feet per year) along with the acquisition of Totten Reservoir (3,300 acre-feet
<br />storage capacity with only junior water rights to fill it), and the construction of facilities (pipelines,
<br />pumping plants, etc.) to irrigate approximately 4000 acres of land. Subsequently, the DWCD
<br />entered into a contract with the CWCB in December 2002 for a reduced loan amount of $5,461,200
<br />at 3.5% for 30 years (90% of the total estimated project cost of $6,068,000.) The loan is secured by
<br />an annuity with MBIA, Inc. that will provide $296,333 per year beginning in December 2008,
<br />dedicated for CWCB loan repayment. The revised loan was to purchase the 1500 MVIC Class B
<br />Shares and acquire the Totten Reservoir facility, but to construct reduced distribution facilities to
<br />irrigate approximately 3,000 acres using only the Class B Shares. The decision to reduce the loan
<br />amount was made by the DWCD Board based on the financial capability of DWCD, and also based
<br />on conservative decisions about the current lack of firm supply from Totten Reservoir.
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<br />Under the current CWCB loan contract (No. C150058A), the DWCD has acquired the 1500 MVIC
<br />Class B Shares (loan amount of $2,052,900), and is in the process of constructing the 440-acre
<br />Sandstone West irrigation project (loan amount of $477,100.) With these two project components,
<br />the anticipated draw from the existing loan is $2,530,000, leaving a remaining unused available bal-
<br />ance on the loan of $2,931,200 for future construction. In addition, as part of the overall project
<br />DWCD is able to irrigate 252 acres along the Dove Creek Canal without any significant construction
<br />cost. DWCD would like to be able to irrigate approximately 2,200 acres in the Yellow Jacket East
<br />and Pleasant View East areas, using approximately 4,400 acre-feet of the water available from the
<br />MVIC Class B shares. With a total project cost of $3,692,000 a loan of $3,323,180 (90% of total
<br />project cost) is required. Construction at this leved would very nearly utilize the remaining MVIC
<br />water.
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<br />To date, no part of the Yellow Jacket or Pleasant View East areas have been constructed under the
<br />existing contract. There are several key factors that have led DWCD to request the new loan:
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<br />1. The DWCD Board delayed construction of the WETPACK irrigation facilities from late 2002
<br />through 2003 due to the drought conditions following 2002. The active capacity in McPhee
<br />Reservoir was near empty after 2002 resulting in the Board being cautious about expending
<br />additional funds for new irrigation. The DWCD Board decided in early 2004 to proceed with
<br />WETPACK construction.
<br />2. The cost of pipe increased approximately 40% in the first 4 months of 2004 requiring that
<br />the Yellow Jacket East and Pleasant View East lands be reconfigured, thus delaying
<br />construction in those areas.
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