Fesability Study

• Contractor Name: Pine River Irrigation District
• Contract Type: Loan
• Loan Projects - Doc Type: Feasibility Study

FUNDING REQUEST FROM CWCB
PRID, through VWC, requests $300,000 from the CWCB in the form of a grant because: (1) the
project is located in the middle of the largest gas producing area in the State of Colorado; (2)
many of the people residing in the service area work in the gas fields and are part of the cause of
the growth; (3) many of the homes in the area are currently served by wells contaminated with
methane gas; (4) the State of Colorado is deeply involved in researching methods to resolve the
methane contamination issue and the rural water system will provide an alternate source of good
quality drinking water; (5) Rural Development has determined the area to be low income as
evidences by their $2 million grant for construction; (6) there is precedence for grants from the
CWCB Energy Fund as was provided to Douglas County which is not a low income area; and (7)
the CWCB has a fund that derives its income from energy development largely from gas wells
within the initial service area.
FINANCIAL PLAN
Once, USDA Rural Development approves the number of taps and agrees to provide the
construction funding at the appropriate time, VWC will begin the designs for the facilities to
serve the initial service area. When this occurs, VWC hopes to have the contract in place with
the CWCB so that the $300,000 can be utilized immediately designs. The designs include
engineering and surveying activities necessary for the development of: plan and profile
drawings of the pipeline routes; plans for tank(s); design of the raw water facilities to the
treatment plant and the treatment plant; and other associated facilities such as valves, river
crossings, etc..
If all of the $300,000 is a grant, there would be no need for a repayment plan. If any part is a
loan, VWC would request that repayment not begin until one year after construction begins when
there is cash flow from tap fees and water sales. Further, VWC would request a 10 year loan at
4% interest.
The CWCB loan for construction of raw water facilities into the treatment plant is proposed to be
handled separately from these funds because the timing is different. The construction of raw
water facilities is needed about 1 to 2 years later than the design funds.
The tables included in Appendix D show the overall financial plan for the project. The portion,
if any, of the $300,000 that is a loan has not been specifically included but as can be seen there
are adequate funds to repay the yearly debt service on $300,000 or a portion thereof.
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