C150363 Feasibilty Study

• Contract/PO #: C150363
• Contract/PO #: CT2015-001
• Contractor Name: Petrocco Family Limited Partnership, LLLP
• Contract Type: Loan
• Water District: 2, 3
• County: Adams
• County: Larimer
• Loan Projects - Doc Type: Feasibility Study

lternative 43
'he third alternative considered was to use the proposed loan to improve the efficiencies
f the existing Petrocco Farms irrigation systems on owned land, and to purchase the
later available to be used on leased land. The installation of new more efficient
Tigation equipment such as drip irrigation systems, or center pivot systems would
onserve water, but at the same time be extremely costly. The center pivot system is not
ractical due to the small acreages of the fields irrigated and the diversity of the crops
rown in each field. Drip irrigation systems could provide up to 90% efficiency, but at a
such higher cost. Petrocco Farms has considered permanent drip irrigation systems in
ie past and has received bids for a satisfactory quality system for an approximate cost of
2,500 /acre in capital expenditure. It is difficult to estimate annual maintenance costs for
drip irrigation system, however, a 2008 report by the Colorado Agriculture Water
.11iance estimates the annual maintenance costs for drip irrigation could be as high as
120 /acre. Normal life expectancy of a drip irrigation system is 12 -15 years, however,
)me systems have been reported to last 20 years with good maintenance. It would not
e a wise business decision to invest in irrigation infrastructure to improve the
fficiencies to short-term rental lands that may be sold in the future. Table 2 below
this Alternative's cost estimate.
Table 2
Alternative #3 Cost Estimate
Fulton Ditch Shares (flood irrigation)
$570,000
New Cache La Poudre Irrigating Co. Shares
0
Cache La Poudre Reservoir Co. Shares
0
Drip Irrigation Capital Expense ( #7 & #8)
705,000
Drip Irrigation Maintenance
503,000`
Total Water Purchase + Capital Expense
$1,778,000
Feasibility Study
10,000
Water Engineering
7,500
Transaction Fees
7,500
TOTAL PROJECT COST
$1,803,000
* Capitalized cost of annual maintenance @ $120 /acre, 282 acres, 20 year period, 3% rate
:)f return (consistent with the Petrocco Revenue/Expense projection in Appendix F).
.lternative #3 provides an additional 255 acre -feet of consumptive use water. The
ulton shares provide an additional 92 ac.ft. of consumptive use water (153.7 ac.ft (total
ew water purchased) x 0.6 (flood irrigation efficiency) = 92 ac. ft.). The installation of a
ubsurface drip irrigation system on Farms #7 and #8, with an increased efficiency to
0 %, would result in an additional 163 ac.ft. of consumptive use water (545 ac.ft.(total
xisting water on Farms #7 & #8) x (0.90 — 0.60)) = 163 ac.ft. Therefore, the total
roject cost per acre -foot of new consumptive use water is: $1,803,000/255 ac.ft. _
7,070 /ac.ft.
0