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Al#ernative Agricultural Water Transfer Methods -Grant Application Form <br />January 2(10$ <br />implications and their acceptability to lessors and lessees. <br />Deliverable: assessment of alternative pay-out methods and evaluation of their tax <br />implications with respect to various lease structures. <br />This subtask will assist the engineering effort in determining the optimal location and size of <br />infrastructure desired to increase Program yield and marketability. <br />Storage and pipelines in critical locations can increase reliable yield to the lease pool, and <br />allow the ditch companies greater flexibility and control of their collective systems with respect <br />to marketing their leases. As demonstrated in the previous phase of this study, the marginal <br />benefits of storage capacity exceed the marginal cost for up to 27,000 additional acre-feet of <br />additional capacity. Although conducted for illustration only, this demonstration showed the <br />value of incremental analysis in determining the location and capacity of additional storage. <br />In addition to storage, economic analysis can assist the engineering analysis in determining <br />the location and size of potential delivery pipelines, considering pipeline construction and O&M <br />costs, and potential water quality impacts to receiving entities. These economic trade-offs will <br />be initially addressed with incremental analysis, although optimization will be used if the <br />number of potential options are too numerous to evaluate individually. <br />Deliverable: economic optimization of additional storage facilities and pipeline <br />configurations. <br />The long-term success of the rotational fallowing program will depend on its financial <br />viability, including the ability to manage a range of legs! and financial obligations while <br />maintaining a positive cash flow. This task involves the development of a Financial Plan to <br />manage these obligations while maintaining a positive cash flow, plus equitably distributing <br />water lease revenues to their intended recipients. <br />Over a 40-year period, the Financial Plan model would examine: <br />• Future revenue generation and revenue allocation across participating ditch <br />companies and agency <br />• Potential operating, maintenance, and administrative costs of a super agency <br />• Program-related capital improvement projects and debt service, such as for <br />storage and transmission facilities <br />• Financial reserves and debt reserve requirements <br />• Cash flaw from year to year <br />• Potential allocation of operation and capital improvement casts across ditch <br />Companies <br />• Other variables to be defined <br />It is the intention that the Financial Plan could support future bond feasibility studies, as <br />needed, assuming a potential super-agency would have bonding authority. <br />One of the primary benefits of having a comprehensive Financial Plan is its ability to <br />23 <br />