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Sanchez Ditch and Reservoir Agenda Item 23c <br />September 18, 2012 (Updated October 4, 2012) <br />Page 2 of 8 <br />Staff additionally recommends a contract condition requiring the Company to make additional <br />principal payments of $5,000 annually to CWCB Loan Contract C153623. Upon the final payment <br />to C153623, an additional $15,000 shall be paid annually to CWCB Loan Contract C153755A. <br />Background <br />The Company provides irrigation water for users in Costilla County, southwest of the town of San <br />Luis. The Company's primary storage reservoir is Sanchez Reservoir. The approximately 104,000 <br />acre -foot reservoir was built in 1910 and is impounded by two separate earthfill dams known as the <br />Main Dam and East Dike. The Main Dam is 135 feet tall and 1,170 feet long and is classified as a <br />large, high hazard structure. <br />The reservoir's outlet includes a 135 foot tall concrete gate tower. Within the tower there are eight <br />sets of 30 -inch diameter valves located at varying elevations. Water exits the gate tower through a <br />10 '/z foot concrete outlet conduit that is approximately 600 feet long. In order to access the gates to <br />operate the dam, a tramway /gondola runs along a cable and is powered by a portable gasoline <br />generator. Because daily access to the tower is required during irrigation season, the reliability and <br />safety of the gondola system has been a concern of the Company. <br />In July of 2011, the Company was awarded $95,000 in WSRA grants ($10,000 from the Rio Grande <br />Basin Account and $85,000 from the Statewide Account) to assess the deteriorating infrastructure <br />and safety concerns of the reservoir. That study, titled "Phase I Assessment & Upgrade, " <br />concluded that abandoning the gondola and replacing the outlet works with remotely operated <br />valves would provide for the most efficient management of the water and would improve safety for <br />Company employees. <br />Loan Feasibility Study <br />The loan feasibility study, titled "Feasibility Study for Sanchez Reservoir Outlet Rehabilitation <br />Plan," dated July 2012, was prepared by Duane Smith, P.E. of Smith Geotechnical. The study was <br />prepared in accordance with CWCB guidelines and includes preliminary engineering and an <br />engineer's estimate of probable cost that were used in determination of the total Project cost. The <br />Loan Feasibility Study was included as a part of the "Phase I Assessment and Upgrade" report <br />completed with the July 2011 WSRA grants. <br />The Sanchez Ditch and Reservoir Company <br />The Company is a Colorado Mutual Ditch Company, incorporated in 1955 and is in good standing <br />with the Colorado Secretary of State. The Company serves over 13,400 acres of irrigated crop land <br />and another 18,400 acres of farm land which, due to lack of water, are either not irrigated or are <br />irrigated in rotation. The Company's system includes Sanchez Reservoir (103,155 AF), <br />Stabilization Reservoir (300 AF), 38 miles of concrete lined ditch, 15 miles of earthen ditch, 23 <br />miles of canal, and a diversion structure at the inlet of Culebra Sanchez Canal. <br />The Company is governed by a five- member board of directors. There are 34 shareholders with a <br />total of 21,790 shares of stock. The board has the ability to take on debt and to withhold delivery of <br />water to stockholders if assessment are unpaid. Liens can also be placed against any shares of stock <br />if assessments are unpaid. Shareholder approval is required in order to set assessments for <br />engineering services and reservoir repair projects. <br />Water Rights <br />