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Feasibility Study for the Plaza Project —Phase 2: McDonald Ditch Implementation Project <br />Section io - Opinion of Feasibility <br />There do not appear to be significant roadblocks that would keep the McDD and RGHRP from <br />successfully completing the project. The Project co- sponsors have secured 92% of the total <br />project costs from grants, NRCS programs, and in -kind contributions. As such, the McDD does <br />not anticipate having to raise stock shares to meet the CWCB loan requirements. The Project <br />will greatly improve the function of the Rio Grande at the Sevenmile Plaza and the ability of the <br />McDD to deliver water to shareholders. A failure at the McDD diversion and headgate would <br />stop all deliveries to water users. As such, the project will secure the long -term stability of the <br />McDD system. <br />Following is a cost- benefit analysis of the project: <br />Total Project Cost including interest <br />$838,000 Project Engineering, Construction, and Administration — Minus Loan <br />$ 70,000 McDD 8% Contribution — CWCB Loan <br />$ 7,000 1% Loan Origination Fee <br />$ 19,8o6 Total Interest to Be Paid on the Loan <br />$934,8o6 TOTAL <br />Total Cost per Share of Stock <br />$934,8o6 / 14.4 = $64,917 <br />Cost per Share of Stock per Year <br />$64,917 / 20 years = $3,246 <br />Cost per Acre-foot of Water Delivered For an Average Year <br />$934,8o6 / (5,018 of x 20 years) = $9.31 <br />Using a rental rate of $75 per acre foot (which is the value farmers must pay to pump one acre- <br />foot of water in the San Luis Valley's Subdistrict #1) and the total cost of the project per year as <br />the cost, the benefit to cost for the project is: <br />Benefit /Cost = [$75 x 5,018 of / ($934,8o6/20)] = 8.1 <br />23 <br />