CT2015-097 Approval Letter - Laserfiche WebLink

Home Browse Search

Sterling Irrigation Company Agenda Item 6a September 11-12,2014 Board Meeting(Updated September 12, 2014) Page 2 of 4 Background The Sterling Irrigation Company (Company) operates the Sterling No. 1 Ditch for the benefit of its shareholders by providing irrigation water through an existing diversion and ditch system off the South Platte River, just upstream of Sterling in Logan County. Approximately 7,400 acres are irrigated by the Company's 77 shareholders. Citing concerns of the ability of its aging diversion and headgate structure to withstand a flood event, the Company obtained a loan through the CWCB in 1998 to rebuild its diversion and headgate structure. That project was successfully completed in 2000. During the unprecedented flood of September 2013 in the tributaries of the South Platte River, a significant number of diversion structures and dams along the river corridor were damaged. Although the Company's newly rebuilt diversion and headgate structure withstood the flooding with minimal damage, a large amount of sediment was deposited in the ditch when floodwaters overtopped the structures and ditch banks. The Company funded the ditch clean out efforts with its cash reserves and was hopeful an emergency loan would not be required. However, during the subsequent spring 2014 snowmelt runoff, the river again rose depositing additional sediment in the ditch and, due to an already weakened ditch bank and river shore, breached the ditch bank in two locations. Together, these two events have made a loan necessary. Loan Feasibility Study Katherine Seetch, Secretary and Treasurer of the Sterling Irrigation Company, prepared the Loan Feasibility Study, titled "Emergency Loan Application and Feasibility Study," dated July 29, 2014. The study includes an alternative analysis and construction cost. The feasibility study was prepared in accordance with the CWCB guidelines. Borrower- Sterling Irrigation Company The Company is a mutual ditch company and was incorporated in 1915. The Company's office is located in Sterling. It operates as a nonprofit corporation and is in good standing with the Colorado Secretary of State. The Company has issued 1290 shares of stock, owned by 77 shareholders. The Company's revenues are primarily derived from assessments charged on shares of stock owned by the stockholders. The Company's By-laws (2000) provide the six-member Board of Directors with authority to levy assessments to meet the necessary expenses of operation and maintenance of the Company, and to enforce unpaid assessments by ceasing water deliveries and eventually by selling the outstanding stock. The By-laws require shareholder's approval to incur more than $30,000 in debt. The Company held a special shareholders meeting on July 7, 2014 and obtained a shareholders resolution authorizing the Company to incur this loan debt. Water Rights The water rights impacted by this project include: TABLE 1: IMPACTED WATER RIGHTS Name Amount Appropriation Adjudication Water Court Date Date Case No. Sterling Irr Co Ditch 1 113.9 AF 7/15/1873 11/15/1894 CA0304 On average, annual diversions of the Company are 21,364 AF.