26c

• Board Meeting Date: 11/19/2008
• Description: CF Section - New Project Loans - Weldon Valley Ditch Company - Cottonwood Draw Flume
• Board Meetings - Doc Type: Memo

Weldon Valley Ditch Company Agenda Item 26c
November 10, 2008
Page 3 of 4
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Alternative 1 No Action: Leaving the flume in its current co ndition is not a viab le option for the
Company. The deteriorated condition of the fl ume indicates certain failure in the future.
Alternative 2- Complete re medial repairs on the flume: This alternative consists of lining the
existing flume with a new syntheti c liner and repairing the damaged wooden supports that hold up
the flume. The new liner would prevent further co rrosion of the metal flume channel; however, this
option would not address the problem caused by having a flume through a natural drainage. The
cost of this alternat ive is approximately $50,000.
Alternative 3 – Replace the existing flume with a siphon : This alternative consists of completely
replacing the existing flume with a new 54 inch concrete siphon under the Cottonwood Draw. This
would solve both the imminent failure problem associated with the flume and the obstruction
problem caused by having a flume in a natural drainage. The cost of this alternative is
approximately $150,000.
Selected Alternative: The Company has chosen Alternativ e 3 that requires building a 54 inch
concrete siphon spanning 250 feet under the Cott onwood Draw, installing a drain pipe for emptying
the siphon, installing a concrete in let structure with trash rack, and replacing the concrete outlet
structure.
The Project design is expected to be complete d by January 2009. Construction is anticipated to
begin in mid-January with completion by the end of February 2009.
Financial Analysis
Table 1 shows a summary of the financial aspects of the loan request. The Company is made up of
574 (90%) agricultural shares and 66 (10%) low-in come municipal shares; therefore, a blended
interest rate of 2.6% for a 30 year loan applies.
TABLE 1
FINANCIAL SUMMARY
PROJECT/LOAN
Total Project Cost $150,000
CWCB Loan (90% of the Project cost) $135,000
CWCB Loan (Including 1% Service Fee) $136,350
CWCB Annual Loan Payment $6,600
CWCB Loan Obligation (including 10% debt reserve funding) $7,300
Number of Shareholders 65
Numbers of Shares 640
Annual Cost Per Share for Project $11/Share
Annual Cost of Loan per AF (based on 36,000 AF average diversion) $0.20/AF
Creditworthiness : The Company’s current assessment is $125/share. Rates will need to be
increased to $136/share to cove r the new CWCB debt service. The Company has an existing
CWCB loan for rehabilitation of its diversion structure. The original loan amount was $188,000.