C150264 Feasibility Study

• Contract/PO #: C150264
• Contractor Name: Lower Latham Reservoir Company
• Contract Type: Loan
• Water District: 0
• County: Weld
• Loan Projects - Doc Type: Feasibility Study

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1. Schmidt Farm Water Rights -1. "1

The water rights associated with the Schmidt Farm were acquired by LLRC in Ja~o~ .
acquisition included two shares of LLDC, two shares of LLRC plus a dry-up co~enant fir the entire
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acreage of land historically irrigated. The LLRC shares have little consumptive use value, as the
shares are used for supplementing the LLDC shares, which is typical of the entire Latham irrigation
system. A historical consumptive use (HCU) analysis concluded that the LLRC shares contributed
8.15 percent to the total HCU for the farm. Results of the HCU analysis for the Schmidt water rights
determined a total of 115.3 acre-feet of HCU for the entire farm and that an average of 105.9 acre-
feet of consumptive use (91.85 percent of the total HCU) can be expected in a change of use of the
two LLDC shares. The attached Figure 2 shows the general location of the Schmidt Farm parcel.

VII. VALUATION OF WATER RIGHTS

The purchase of LLRC shares and the subject LLDC shares associated with the Schmidt Farm was
consummated at a price of $775,000. Based upon the pro-rata portion of HCU associated with the
subject LLDC shares, a value of $71l ,817 is established for the two shares of LLDC subject to this
project (91.85% x $775,000 = $711,817). This value translates into a value of$355,908 per share of
LLDC.

LLRC acquired an appraisal of the four shares ofLLDC stock that was purchased in February 2007
from the Rothe Farms (currently financed by CWCB Loan under Contract No. CI50253). A copy of
the water rights appraisal is provided in Appendix D. The appraisal for the Rothe Farm water rights
determined a value of$1,575,000 for four shares ofLLDC, or $393,750 per LLDC share. This
exceeds the value established for the Schmidt Farm shares by 10.6 percent, or $37,842 per share.

VIII. IMPLEMENTATION

LLRC intends to utilize the water rights subject to this CWCB loan application for augmentation
beginning in April 2009. Until that time, the water rights will continue to be utilized for irrigation
uses on the Schmidt Farm. LLRC anticipates amending its water court application for the plan for
augmentation by adding the subject water rights prior to December 31, 2008.

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