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Agenda Item 20b January 25, 1995 2 DISCUSSION This project is yery similar to the Elmwood Ditch and the Appleton ML 350 Ditch Company lining projects, funded in part by the CWCB. This project will also promote conservation of existing water rights, while furthering the goals of the salinity program. Since $400,000 of the project will be funded by a grant from the CFSA, the District's financial capability to complete the project is improved. The District has an existing loan with the CWCB ( Remaining principal balance: $293,000; Annual payment: $107,200; Interest rate: 5%; Final payment date: 8-1-98). The District has asked whether they can combine this existing loan with the new loan. Since the existing loan has a term of just 10 years (and the annual payment is rather high), the effect of combining the two loans and amortizing them over a 30 year duration would be to significantly reduce the District's annual payment. If the District were authorized a new loan for $1,293,000 at 4.2% (a weighted average of 4% for the new loan and 5% for the remainder of the existing loan) amortized oyer 30 years, the new payment would be $78,500. This is $28,700 LESS that the District's current payment to the CWCB. The loan must be approyed by election of the District water users. This approval will be sought at the annual meeting January 26, 1995. Collateral for the loan will be a security commitment on income from the District derived from special of general assessments or leyies. (This is the same collateral used for the existing loan.) The District operates the Orchard Mesa Check, and is currently involved in litigation on check operations. The Mutual Mesa LateraI receives water from the Orchard Mesa Canal No. 1 (which is itself supplied with water from the Orchard Mesa pumping station). This project is located approximately 10 miles west of the pump station and check structure. (See Attachment; Map #1) The District often has difficulty supplying water to the west end of its system during hot weather, and must use an auxiliary pumping station at 291f2 C Road, located in the 15 mile reach. This project will reduce or eliminate the need for use of this auxiliary pumping facility. The location of return flows from the end of the Mutual Mesa Lateral will be unchanged. However, direct seepage losses from the lateral which parallels the Colorado River along the edge of the mesa, will be eliminated. ' The NRCS has completed final survey of the ditch, and should have bid documents ready by spring 1995. The District plans to build the project in fall 1995, after the irrigation season has ended.