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Park Center Water District January 20, 2009 -Updated January Z7, 2009 Page 3 of 6 Park Center Water District Agenda Item l la The District was created by election in 1968 to provide domestic water to residences in the North Canon City area. The District is a Title 37 Special District with its office located in Canon City, Colorado. It currently serves approximately 4,000 residents. The District operates as an Enterprise and is governed by a five member Board of Directors and is funded through user fees and tap fees. The Board has the ability to set user fees. Water Rights In addition to leasing well water, the District owns surface water rights through 614 shares in the Canon Heights Irrigation and Reservoir Company. In an average year, one share of stock is equivalent to one acre-foot of water. Project Description In order to address the well failure and continue providing water to its users, the District considered the following options: 1. Take no-action; 2. Repair the existing well casing; 3. Redrill the well; Alternative No. 1-The no action alternative of discontinuing the lease between BLM and the District was considered unacceptable to the District because it is reliant on the well and could not provide enough water to its users without the well. Alternative No. 2 -The District and the BLM both contacted contractors to inspect the well to determine if it could be rehabilitated. Both contractors recommended redrilling the 80 year old well. Contractors believed that sliplining the artesian well was too dangerous and could result in complete well failure. Selected Alternative No. 3 -The District (along with the support from the BLM) selected the well redrilling alternative because it knows the geography of the area, and the size and depth of the aquifer; therefore, it believes this will best solve the existing problem. The BLM will be assisting the District by obtaining all permits required for the project. The District anticipates awarding a contract for the drilling in February 2009 with work commencing by the end of the month. It expects work to be complete by the end of March 2009. Financial Analysis Table 1 shows a summary of the financial aspects of the loan request. The District qualifies for the low- income municipal interest rate of 3.5% for a 30 year term.