C150156 FS

• Contract/PO #: C150156
• Contractor Name: Arkansas Groundwater Users Association
• Contract Type: Loan
• Water District: 14
• County: Pueblo
• Loan Projects - Doc Type: Feasibility Study

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Excelsior Ditch in order to better utilize excess replacement sources, increase the value of their Excelsior
Ditch shares and provide lagged replacement credits throughout the year. AGUA is also seeking funding
from the CWCB in the amount of $189,000 for construction costs associated with this project.
To determine the feasibility of AGUA's potential purchase of 785 Excelsior Ditch shares we have used
the results of two previously prepared feasibility studies: a 1997 Feasibility Study prepared for AGUA
that summarizes average annual yields, cost components, total cost, and cost per acre-foot for each of six
water right purchase alternatives investigated and a 2000 Draft Feasibility Study prepared for MAGUA
that summarizes average annual yields, cost components, total cost and cost per acre-foot for each of
twelve water right purchase alternatives investigated. We also used the results of an independent water
rights appraisal recently prepared by Blatchley Associates that valued the 785 Excelsior shares at
$1,050,000 or $1,338 per share. Of the water right alternatives investigated, the cost per acre-foot of
consumptive use water ranged from $3,240 for DF Ranch water rights to $45,480 for municipal water
including consideration of operation, maintenance, augmentation station expenses and engineering and
legal fees for change of use. Our analysis of the average annual cost per acre-foot of Excelsior Ditch
water is $1,537, much less than the least expensive alternative. The Excelsior Ditch is the preferred water
right purchase alternative because it has the lowest cost per acre-foot of consumptive use yield of the
alternatives, and because it is located on the main stem of the Arkansas River where most of AGUA's
well depletions occur.
AGUA is requesting a new loan for total project costs of $1,072,500 from the CWCB to finance the
purchase of the 785 shares of the Excelsior Ditch and to construct the ditch improvements and recharge
pond. The requested loan amount including a one percent loan origination fee and the $5000 CWCB
feasibility study grant at ninety percent of the total cost is $970,448. Annual repayments to the CWCB on
a$970,448 loan for a 30-year period at a two and one-half percent interest rate will be $46,366. AGUA
will repay the loan by increasing the loan fee from $46 to $60 per well, the augmentation water fee up to
$60.00 per acre-foot of well depletion and the loan assessment fee up to $7.50 per acre-foot of well
depletion as needed.
' AGUA — 2003 Feasibility Study - 2- August 15, 2003