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based on a $4.545 million loan from the CWCB Construction Fund with a 10-year <br />repayment period at an interest rate of 2.25%, with the remainder of the lease payment <br />for the North Fork Lease coming from cash reserves or a private loan. <br />To pay for the Compact Compliance Pipeline, the RRWCD Board of Directors increased <br />use fee on the diversion of ground water for irrigation use from $5.50 to $14.50 per <br />assessed irrigated acre beginning January 1, 2008. Currently, there are approximately <br />495,000 assessed irrigated acres within the District subject to the use fee. See Table 2 <br />(Projected Cash Flow) (attached). The increased use fee will generate revenues in <br />excess of financial obligations, which will provide revenues to repay both the $4.545 <br />million loan and the $60.6 million loan from the CWCB. <br />Because of possible curtailment of wells if the surface owners' petition to redraw the <br />Northern High Plains Basin were successful, which could affect existing mortgage <br />loans, local banks have indicated an interest in loaning money to the RRWCD WAE for <br />the North Fork Lease. However, the current credit crisis and the need for a loan by the <br />end of 2008 make it difficult to know whether local banks would be willing to lend money <br />and at what interest rate. <br />An analysis of future ground water levels indicates that a small amount of irrigated land <br />(approximately 5%) will go out of production over the 10-year repayment period of the <br />CWCB loan for the North Fork Lease; however, the vast majority of the irrigated land in <br />the basin is expected to remain in production over the next 10 years; thus, the use fees <br />necessary to repay a loan for the North Fork Lease and the loan for the Compact <br />Compliance Pipeline over the 10-year repayment period would not require an additional <br />increase in use fees. <br />10.2. Credit Worthiness <br />An audit report of financial statements for 2007 was submitted with the loan application. <br />The RRWCD WAE submitted audit reports for 2005 and 2006 with the Loan Feasibility <br />Study for the Compact Compliance Pipeline. Copies of these reports can be provided <br />again if needed. <br />The current schedule of annual use fees is $14.50 per assessed irrigated acre on <br />diversions of ground water for irrigation use by post-compact wells within the District, <br />$11.60 per acre-foot on post-compact diversions of ground water for municipal and <br />commercial use, and $13.45 per acre-foot of consumptive use on post-compact surface <br />diversions. <br />11.0 CONCLUSIONS AND RECOMMENDATIONS <br />The North Fork Lease will assist the State of Colorado is to comply with <br />the Republican River Compact and will help to maintain the viability of <br />irrigated agriculture in the Republican River Basin. The North Fork Lease <br />will reduce the amount that will need to be pumped from Compact <br />Compliance Wells for the Compact Compliance Pipeline during the 20- <br />yearterm of the lease by approximately 2,500 acre-feet per year, which <br />11 <br />