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Background <br />The Company, located in Larimer County, operates the South Side Ditch for the benefit of its <br />shareholders by providing irrigation water to a 400-acre service area. The ditch is <br />approximately 11 miles in length, with its head gate located 4 miles west of Loveland, Colorado, <br />on the Big Thompson River. <br />For the past few years the Company has experienced extensive seepage and potential ditch <br />failure at three separate ditch locations. Two of the ditch sections have been regraded and <br />repaired with a PVC liner. The remaining ditch section, referred to as the Sylvan Dale Ditch <br />Section, is currently under reconstruction. A large portion of this 900 foot ditch section has an <br />extremely steep left side slope that falls directly to the Big Thompson River. Given the <br />steepness of this side slope and the monitored extent of seepage, failure of the section was a real <br />threat to the Company. The original project scope for this area was to only address the visible <br />seepage area, approximately 225 feet in length. The Company has since elected to treat the <br />entire 900 foot section, to eliminate any future seepage along this sensitive steep ditch area. <br />The original cost estimate to complete the project described above was $80,000. The overall total <br />project has increased to $96,700, to accommodate the increased project length for the Sylvan Dale <br />Ditch Section. <br />Discussion <br />Due to additional work not programmed in the original cost estimate, the overall project cost has <br />increased by $16,700 The Company is requesting an increase of $15,150 ($15,000 for project costs <br />and $150 fora 1% origination fee), to its current loan authorization $72,720, to cover 90% of the <br />total cost of the project. <br />The total amended loan amount for the Company would be $87,870 (87,000 for project costs and <br />$5,870 fora 1% origination fee), at their original rate of 3.1 % for 30-years. The new annual <br />payment will be $4,995, which includes the 10% reserve requirement. The Company's current <br />loan of $72,720 has an annual payment of $4,134, which includes the 10%reserve requirement. <br />Financial Analysis <br />As security for this loan, the Company will continue to pledge assessment revenues backed by an <br />assessment covenant. This security is in compliance with CWCB Loan Policy #5 (Collateral). <br />Staff Recommendation <br />Staff recommends a loan not to exceed $87,870 ($87,000 for project costs and $870 for the 1% <br />Loan Service Fee) to the South Side Ditch Company for engineering and construction costs <br />associated with the South Side Ditch Rehabilitation Project, from the Construction Fund Account. <br />The terms shall be based on their previous blended rate of 3.1% per annum for 30-years. Final <br />approval of the loan shall be conditioned upon all standard contracting provisions of the CWCB <br />Loan Program. Security for the loan shall be collateral in compliance with CWCB Loan Policy #5. <br />cc: Jon Stevens -South Side Ditch Company <br />Vaughn McWilliams, CWCB <br />Steve Biondo, CWCB <br />.~my Stengel, AGO <br />Attachment <br />