PROJ01945 ‎(3)‎

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

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EXECUTIVE SUMMARY

BACKGROUND
The Dolores Project (Project) is a multiple purpose water resource project constructed by the
U.S. Bureau of Reclamation (USBR) and operated by the Dolores Water Conservancy District
(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 DISTRICT, in an initiative called the Water for Everyone Tomorrow PACKage
(WETPACK), will implement the DISTRICT's philosophy of better management ofwatler for all
of the Dolores Project's uses. WETPACK has been initiated with the purchase of 1,500
Montezuma Valley Irrigation Company (MVIC) Class B Shares and the construction of facilities
to irrigate 440 acres of new land in the Sandstone West block.

The DISTRICT entered into Contract No. C150058 (Contract #1) with the Colorado Water
Conservation Board (CWCB) on December 10, 2002 f(Jr a loan of $5,461,200 at 3.5% for 30
years. The loan was secured by an annuity with MBIA, Inc. which will provide $296,333 per
year beginning in December of 2008. The loan was to have been used to purchase the MVIC
Class B Shares providing 6,000 acre-feet per year and construct pipelines and pumping plants to
irrigate approximately 3,000 acres using the Class B Shares.

The DISTRICT is requesting that Contract #1 be closed with a total loan of $2,530,000;
$2,052,000 for MVIC Class B Shares (cost of $2,281,000) and $477,000 to irrigate 440 acres in
Sandstone West (construction cost of $530,000). The annual debt service for Contract #1, at
3.5% for 30 years, is $137,559. Of the 6,000 acre-feet per year available from the MVIC Class
B shares, approximately 880 acre-feet will be used to irrigate 440 acres in Sandstone West.

The DISTRICT is also requesting a second contract (Contract #2) to implement a new loan to
construct the facilities necessary to utilize the remaining water from the MVIC Class B shares.
This Feasibility Study is to describe the facilities required to irrigate approximately 2,200 acres,
using approximately 4,400 acre-feet of the water available from the MVIC Class B shares. The
land to be irrigated is in the Yellow Jacket East and Pleasant View East areas, and the irrigation
facilities are estimated to cost $3,692,000. The requested CWCB loan is for 90% of the
construction cost or $3,323,180 with annual debt service of$158,774 using 2.5% for 30 years.

The DISTRICT submitted a Feasibility Study to the CWCB in October of 2000 as the basis for
Contract #1. Chapters II through X of the origi~al Feasibility Study are summarized in the
following chapters. Chapter I, Study Objective and Study Plan, and Chapter XI, Description of
Selected Plan, have been revised to describe the Yellow Jacket East and Pleasant View East
facilities and costs. This Feasibility Study is to support the DISTRICT request for another
contract (Contract #2) to implement a new loan.