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The Jackson Ditch Company Agenda Item 27a
<br />January 13, 2012 (Updated January 31, 2012)
<br />Page 2 of 3
<br />travel west, around the island, bypassing the diversion gate. The check dam, originally constructed
<br />from wood approximately 100 years ago, was replaced with a concrete structure in the 1960's. That
<br />structure has fallen into disrepair and over the past decade the Company has made routine
<br />temporary repairs to keep it operational. This Project involves permanent improvements designed
<br />to restore the structure's reliability for years to come and provide shareholders with a more
<br />dependable supply of water.
<br />The Board approved the Company's original loan request on September 14, 2011. On November
<br />16, the Company invited three local contractors to bid on the Project. Bids were received two
<br />weeks later and were substantially higher than estimated by the engineer. Bids ranged from
<br />$119,000 to $134,000. The initial estimate provided in the loan application and feasibility study
<br />established a construction budget of $75,000. The most significant difference between the estimate
<br />and bids was reflected in unit costs for reinforced concrete, including mobilization, forming,
<br />reinforcement, placement, and heating.
<br />The Company accepted a bid, negotiated down to $117,000, which resulted in a revised project cost
<br />of $137,000, with engineering and contingencies included. Pending approval of the requested loan
<br />increase, construction is expected to begin in January 2012 and be completed no later than April 1,
<br />2012. A loan contract was drafted per the terms of the initial loan approval; however, it was never
<br />executed. The contract will be updated to reflect the terms outlined in this memo if approved.
<br />The Jackson Ditch Company
<br />The Company, located in Fort Collins, Colorado, is a Colorado mutual ditch corporation founded in
<br />1894. The Company diverts water from the Cache la Poudre to the ditch where it delivers water,
<br />primarily for agricultural irrigation, to its 73 shareholders, totaling 24 shares. The Company's
<br />facilities include the check dam and diversion gate along the Cache la Poudre, and approximately
<br />8.7 miles of earthen ditch. The average annual diversion through the Ditch is 5,500 acre -feet (AF).
<br />Financial Analysis
<br />The Company qualifies for a blended (55% agricultural, 37% middle - income municipal, 6% high -
<br />income municipal, and 2% commercial) interest rate of 3.60% for a 30 -year term. Table 1 provides
<br />a summary of the financial criteria of the loan request.
<br />TABLE 1: FINANCIAL SUMMARY
<br />Original
<br />Increase
<br />New
<br />Total Project Cost
<br />$90,000
<br />$47,000
<br />$137,000
<br />Borrower Contribution
<br />$9,000
<br />$4,700
<br />$13,700
<br />CWCB Loan Amount 90% of total Project cost)
<br />$81,000
<br />$42,300
<br />$123,300
<br />CWCB Loan Amount (including 1% Service Fee)
<br />$81,810
<br />$42,723
<br />$124,533
<br />CWCB Annual Loan Payment
<br />$4,504
<br />$2,352
<br />$6,856
<br />CWCB Loan Obligation (including 10% debt reserve fundin)
<br />$4,954
<br />$2,588
<br />$7,542
<br />Number of Shares
<br />24
<br />-
<br />24
<br />Current Assessment per Share
<br />$2,275
<br />-
<br />$2,275
<br />Annual Cost of Project per Share
<br />To Cover CWCB Loan Obligation
<br />$207
<br />$108
<br />$315
<br />Cost of Project per Acre -Foot (5,500 AF)
<br />$16
<br />$9
<br />$25
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