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THE SELECTED PROJECT <br />The Henrylyn Irrigation District Board has chosen Construction Alternative 1 for both dams; <br />alternative 1 being the repair of critical components rather than a complete rehabilitation of the dams. <br />This alternative was chosen based on the cost. <br />The cost of this alternative is less than the current value of CBT or other water that may be available <br />on the market. There are no major impediments, other than the cost, and this alternative has a high <br />probability of success and can be accomplished by local contractors experienced in dam <br />construction. <br />FINANCIAL PLAN <br />The estimated cost of the two projects is $2,403,000. The HID plans to apply for a 90% loan in the <br />amount of $ 2,162,7001oan from the Colorado Water Conservation Board small projects fund. The <br />remainder of the project will be paid for with funds raised by assessments and also with cash the <br />company has available in an existing cerificate-of-deposit and money market account. <br />Based on a$2,162,700 loan at an interest rate of 2.5% and a 30 year term, the annual payments will <br />be $103,329 per year. It is anticipated the work will be conducted on Prospect Reservoir Dam first; <br />presumably in 2007 and 2008 with the work on Horsecreek in 2008 and 2009. The required capital <br />for the project during the years 2007, 2008, and 2009 when the project is designed and construction <br />completed is as shown in Table 8. The funds required in 2007 includes the 1% loan origination fee <br />of $21,627. <br />The annual payments required to service the loan from 2009 through 2038 are also shown in Table <br />8. <br />TABLE 8 <br />FUND REOUIREMENT SCHEDULE <br />The funds required will necessitate the HID raise assessments to provide the cash flow indicated. <br />Revenue for operations and payment of loans is derived from assessments on 32,750 acres. <br />Horsecreek & Prospect Reservoirs - 06.014 <br />Henrylyn Irrigation District Page 16 <br />