18b ‎(3)‎

• Board Meeting Date: 3/18/2008
• Description: CF Section - New Project Loans - Lower Latham Reservoir Company - Well Augmentation Project ‎(Phase II)‎
• Board Meetings - Doc Type: Memo

Lower Latham Reserc oir Company .agenda Item 18b
Matroh 11, 2008
Page 2 of 4
the GMS wells that are not expected to be fully covered. GMS provided an initial quota of 15% in 2007 and
increased the quota to 30% in June of 2007. The Company has concluded that additional replacement
sources are necessary to provide sufficient replacement water during extended drought years.
In March 2007, the Company purchased the 384 acre Rothe Farm water rights that included four Ditch
Company shares. In May 2007, the Company purchased the 56 acre DeJong Farm water rights that included
two shares of Ditch Company water. The Company has also recently implemented instrumentation to
measure and record flow at various locations on the system in order to facilitate augmentation plan operation
and improve ditch and reservoir operations. These purchases and improvements were financed through the
CWCB Water Project Loan Program in 2007 with a loan for $1,994,596 under Contract Number C150253.
Loan Feasibility Study
The Company, through its engineer and manager, Doug Seely, P.E., has completed the feasibility study in
accordance with CWCB guidelines. The study references the Water Rights Valuation that was performed in
conjunction with the Loan approval in July 2007.
Lower Latham Reservoir Company
The Company is located in Greeley and is a Colorado non-profit cofpar-ation registered in the State of
Colorado, in good standing. The Company was incorporated in August 1898, for the purpose of providing
water storage, and there are currently 47 shareholders and 156 shares of stock. The Company is governed by
a 5-member Board of Directors. The Company has the authorization to set annual assessments and the
authority to shut off water delivery to shareholders that fail to pay assessments, and the authority to rescind
and resell shareholder stock to pay back assessments. The Board of Directors has the authority to borrow
money on the company's behalf. The Company does not currently levy a shareholder assessment.
Approximately 90% of the Company revenues are from oil and gas royalties from wells that are located on
Company property. The remaining 10% comes from leases, fees and interest.
Water Rights
Substitute Water Supply Plan (SWSP) -The total irrigated acreage in the SWSP is 7,730 acres, and for the
2008 plan year (April 2008 through March 2009) the total stream replacement obligation was determined to
be 566.5 AF (allocated 181 AF to the GMS member wells and 385 AF to the non-GMS wells.) The 2008
SWSP provides augmentation water from the following sources: 18.5 shares of Ditch Company water, 13.5
shares of Union Ditch Company; 15.19 shares of Greeley Irrigation Company; and an agreement with the
City of Longmont (subject to renewal) to exchange shares of Colorado Big Thompson (CBT) water owned
by the Company for its municipal effluent. The 2008 SWSP Renewal Request was prepared and submitted
to the State Engineer's Office in December 2007. SWSP renewals are usually approved by March 31 of each
year.
Augmentation Plan - In 2003, Company filed a permanent well augmentation plan that is pending in
Division 1 Water Court (Case No. 2003CW047). The augmentation plan application will be amended to
include all acquisitions, including those to be covered by the CWCB loan.
Project Description
The Company is seeking to supplement its replacement water and assure uncuftailed pumping of the wells in
its system during all years. The Company considered multiple replacement water sources for use within their
plan for augmentation and the potential for no additional sources. It has been determined that additional
replacement sources are necessary to provide sufficient replacement water during extended drought periods.