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Sylvan Dale Ranch,LLLP Agenda Item 35a May 9,2014(Updated May 23,2014) Page 2 of 4 • Background The Ranch has been owned and operated by the Jessup family since 1946 as both a guest ranch and a working ranch encompassing 3,200 acres in the foothills at the mouth of the Big Thompson Canyon, seven miles west of Loveland. There are 160 irrigated acres of alfalfa-hay pastures. Hay is harvested off these pastures in June. During the rest of the year,the pastures are grazed by the Ranch's grass-fed cattle herd. Beef produced is sold directly to local customers. The Ranch owns two adjoining ponds next to the Big Thompson River, downstream from Riverview Campground in Loveland. The ponds, which were silted in during the flood, are fed by springs and drain into the river just above the George Rist Ditch diversion. The Ranch pumps water out of the ponds to irrigate pastures located immediately south of the ponds. Between 142 and 190 acre-feet(AF) are used per season, using two center pivots. Loan Feasibility Study David Jessup, General Partner of the Ranch, prepared the Loan Feasibility Study, titled"Emergency Loan Application and Feasibility Study," dated December 2013. The study includes an alternative analysis, cost estimates, and three years of financial statements. In addition, permitting was evaluated by Grand Environmental Services. The study was prepared in accordance with the CWCB guidelines. Borrower—Sylvan Dale Ranch,LLLP The Ranch is a family owned, limited liability limited partnership (LLLP) registered in the state of Colorado since 1983 and is in good standing with the Secretary of State. There are two General Partners, David Jessup and Susan Jessup, and eight Limited Partners. This is a closely held corporation so the CWCB requires hard collateral equal to or greater than 110% of the loan amount. Ranch revenues are generated from guest ranch operations, hay production, and beef and cattle sales. Water Rights On average,the Ranch diverts 166 AF annually. It owns 2.5 shares of the Handy Ditch. The Ranch also has the contractual right to use 259 Colorado-Big Thompson(C-BT)units. As irrigation water is pumped out of its ponds, an equivalent amount of replacement water is simultaneously released into the river from the C-BT allotment at the flume from the Hansen Feeder Canal,two miles upstream from the ponds. Upon initial review of the Ranch's loan application, it was discovered that the Ranch did not have decreed storage rights for the ponds. Since that discovery, the Ranch applied for a substitute water supply plan(SWSP)to replace evaporation losses from the ponds. The SWSP is pending approval. The Ranch also filed an application to Water Court for a surface water right and permanent plan for augmentation. Staff anticipates the Ranch will be successful with both its SWSP and application to Water Court. Project Description The goal of this Project is to dredge the silt deposited during the flood from the ponds so irrigation can resume.