CT2015-134 Approval Letter - Laserfiche WebLink

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Prairie Ditch Company Agenda Item 3 1 b May 9,2014(Updated May 23,2014) Page 2 of 5 Background The Prairie Ditch diversion structure and headgate is located seven miles northwest of Monte Vista, Colorado on the Rio Grande River. The Company's service area covers approximately 23,000 irrigated acres. The diversion and headgates were constructed in the early 1900s and were most recently reworked in 1962. They are now deteriorating,presenting a growing concern the diversion structure may soon completely wash out. Both the diversion and headgate were highlighted as river rehabilitation priorities in a 2001 study titled"Rio Grande Headwaters Restoration Project."The study analyzed the condition of riparian habitats and structures along a 91-mile reach of the Rio Grande from the town of South Fork to Alamosa, and triggered a more localized effort known as the Plaza Project. The Plaza Project is a multi-phased project intended to improve the health and function of the Rio Grande River in the Sevenmile Plaza area through stream bank restoration,wetland restoration, and the replacement of aging and inefficient diversion and headgate structures. Phase 1 was a planning phase and identified several diversion and headgate structures in need of replacement. Phase 2 (McDonald Ditch Implementation Project)was the Plaza Project's first implementation project and was funded in part with a CWCB Loan(C150334) and WSRA grant(C150492). Phase 3 is the second implantation project and the subject of this loan request. Project Tasks include the final engineering design and construction of new Prairie Ditch diversion and headgate, as well as stream bank stabilization, monitoring, outreach, and education. The Company is only responsible for a portion of funds that will cover the Prairie diversion and headgate improvements(Tasks 2 and 3 of the Phase 3 Plaza Project). Project funding comes from a variety of grants,this CWCB loan, and in-kind services. Concurrent with this request(See Agenda Item 31a),the Colorado Rio Grande Restoration Foundation(CRGRF) is seeking approval of a Water Supply Reserve Account(WSRA) Grant to help finance Phase 3. Loan Feasibility Study The Rio Grande Headwaters Restoration Project and the Natural Resources Conservation Service (NRCS)prepared the Loan Feasibility Study titled "Feasibility Study, The Plaza Project—Phase 3: Prairie Ditch Implementation Project,"dated February 1, 2014. The study was prepared in accordance with CWCB guidelines and includes an alternative analysis,preliminary engineering design, cost estimates, and financial statements. Borrower-Prairie Ditch Company The Company is a Mutual Ditch Company formed in 1887. It operates as a nonprofit corporation and is in good standing with the Colorado Secretary of State. The Company is governed by a five-member board of directors responsible for general supervision over the affairs of the corporation. The Board has general powers in connection with any and all of the business in which the corporation may engage, and is authorized to set assessments should the shareholders fail to set an assessment at its annual meeting. The Board is authorized to incur debt up to $25,000; accordingly a shareholder resolution is required to authorize this loan request. The Company is made up of 257 shares held by 65 shareholders. The Company's Articles of Incorporation require that water rights of the Company shall be used only for agricultural irrigation or incidental domestic use. Revenues are primarily derived from annual shareholder assessments. The Company's By-laws provides the Board authority to restrict water deliveries, and allows for the sale of delinquent shares.