26b

• Board Meeting Date: 11/19/2008
• Description: CF Section - New Project Loans - New Salida Ditch Company - Ditch Pipeline Project
• Board Meetings - Doc Type: Memo

New Salida Ditch Company Agenda Item 26b
November 10, 2008
Page 3 of 4
1. Take no-action;
2. Line the Ditch with a poly liner;
3. Install a pipe;
Alternative No. 1 – The no action alternative was consider ed unacceptable due to the agreement
between the Company and CDPH E following the 2005 Ditch break.
Alternative No. 2 – The option to line the Ditch with a poly liner was eliminated due to the
difficulty in maintaining the Ditch with a liner. Th at area is burdened by heavy silt loading and flat
gradient. Cleaning out this mate rial would be impractical and di fficult to do without damaging the
liner.
Selected Alternative No. 3 – Installation of a high density poly ethylene (HDPE) pipe was selected
because it was considered to be the most perman ent fix to address the stability problem and the
most cost effective in the long term. Approxi mately 3,200 feet of 42 inch HDPE pipe will be
installed along the existing ditc h profile. Construction will begin no later than February 2009 and
should be complete by late spring.
Project Costs
Engineering Cost $19,000
Construction Cost $383,000
Total $402,000
Financial Analysis
Table 1 shows a summary of the financial aspects of the loan request. The Company qualifies for
the agricultural interest rate of 2.5% for a 30 year term.
Table 1. Financial Summary
PROJECT/LOAN
Total Project Cost $402,000
CWCB Loan (90% of the Project cost) $362,000
CWCB Loan (Including 1% Service Fee) $365,620
CWCB Annual Loan Payment $17,500
CWCB Loan Obligation (including 10% debt reserve funding) $19,200
Number of Shareholders 14
Numbers of Shares 400
Annual Cost Per Share for Project $48/Share
Annual Cost of Loan per AF (based on 7,000 AF average diversion) $2.75/AF
Creditworthiness : The Company’s assessments have histori cally been $50/share. Rates will need
to be increased by $48/share to $98/share to cove r the new CWCB debt service. Additionally, the
Company will have to charge a special assessmen t of $100/share to provide for the 10% match for
the loan. The Company has an existing no existing debt.