C150269 feasibility Study

• Contract/PO #: C150269
• Contractor Name: San Luis Valley Water Conservancy District
• Contract Type: Loan
• Water District: 0
• County: Alamosa
• Loan Projects - Doc Type: Feasibility Study

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No change in environmental impacts will occur as a result of the District purchase of the
Pine River Weminuche Pass Ditch water rights. The District has had several years of
experience maintaining the Ditch in accordance with Wilderness requirements as
administered by the U.S. Forest Service.

4.0 FINANCIAL FEASIBILITY

4.1 Loan Amount

The purchase price for the one-third interest in the Pine River Weminuche Pass Ditch
water rights is $800,000. As required by the purchase agreement with the current water
right owner, John A. Weaver, $80,000 of earnest money is require which will be applied
as a credit to the total price at sale/purchase closing. The District will pay the earnest
money from their funds. Therefore, the resulting loan request is $720,000. The
requested loan repayment terms are an interest rate of3l1z% per year for 30 years.

4.2 Financing Sources

The proposed source of funding for the purchase of the one-third (6.0 cfs) interest in the
Pine River Weminuche Pass Ditch water rights is a loan from the Colorado Water
Conservation Board (CWCB). A local match of 10% ofthe purchase price or $80,000
will be provided by the District from their funds. A review of the District's audits and
balance sheet contained in Appendix D shows a significant unallocated balance. The
following paragraphs explain the reason for the District requesting a loan to purchase the
one-third (6.0 cfs) interest in the Pine River Weminuche Pass Ditch water rights rather
than use their currently available funds.

The Board of the District has made a very conscious effort to develop and maintain a
reserve for the District to be available in the event of a catastrophic failure of the Pine
River / Weminuche ditch, and to purchase additional water rights that will be placed in
the District's augmentation program inventory.

In 2002, it was determined that the District was drawing down the reserve to sustain its
ongoing operations of the augmentation program. This was addressed by the increase of
Annual Fees to all clients and the district is currently meeting its ongoing operating costs
without using the reserve.

The liquid assets of the District are now in excess of$900,000.00. The 10% earnest
money payment ($80,000.00) associated with the planned acquisition of the one-third (6
cfs) Pine River /W eminuche water rights will come from this reserve, leaving a balance
of$820,000.00.

Upon the execution of the Purchase / Sale agreement associated with the acquisition of
the one-third interest in the Pine River /W eminuche water rights, it is the intent of the
District to approach the owner of remaining one sixth (3cfs) of the water rights to sell to
the District. The initial offer would be under the same terms and conditions as those

E01662

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