CT2015-097 Approval Letter - Laserfiche WebLink

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Sterling Irrigation Company Agenda Item 6a September 11-12,2014 Board Meeting(Updated September 12, 2014) Page 3 of 4 Project Description The goal of this Project is to bring the ditch into operational condition, to restore water deliveries, and to remove accumulated sediment upstream of the diversion structure. Alternative 1 - Do Nothing: This alternative was considered unacceptable. Failure to bring the ditch into operating condition would prevent approximately 7,400 acres on 77 farms from receiving irrigation water. Alternative 2 -Rebuilding Collaboratively: The Company did not identify any collaboration opportunities with other water rights holders. Damage was specific to the Company's ditch system, though the removal of accumulated sediment upstream of the diversion structure will help the upstream landowner by lessening the rate of stream bank erosion occurring at that location. Selected Alternative 3 -Reconstruct to Pre-Flood Conditions: This alternative will remove the sediment from the ditch channel, repair the ditch breaches,and remove sediment in the river channel just upstream of the diversion structure. The first Phase was the immediate clean out following the September 2013 flood event and the second Phase was the clean out and breach repair following the spring 2014 snowmelt runoff. The total Project cost was $123,260 as shown in Table 2. TABLE 2: Construction Cost Task Cost Phase 1 - September 2013 Flood Repairs $46,435 Phase 2 - Spring 2014 Snowmelt Event Repairs $76,825 Total $123,260 Schedule: Phase 1 was completed by February 2014. Phase 2 was completed by May 2014. Financial Analysis The Company qualifies for an agricultural interest rate of 1.50%for a 10-year term (reduced from a 2.0% rate per CWCB Loan Policy#7). The Company depleted its cash reserves to provide upfront Project funding. This loan will enable the Company to maintain its cash reserve account at an acceptable operating level (91% of current expenses). As an existing CWCB borrower, it is in CWCB's interest for the Company to maintain acceptable financial ratios. Table 3 provides a summary of the Project's financial aspects. TABLE 3: FINANCIAL SUMMARY Total Project Cost $123,260 Borrowers Contribution $23,260 CWCB Loan Amount $100,000 CWCB Loan Amount (Including 1% Service Fee) $101,000 CWCB Annual Loan Payment $10,664 CWCB Annual Loan Obligation (1st Ten Years) $11,730 Number of Shares 1290 Annual Loan Obligation per Share $9.10 Current Assessment per Share $105/share Future Assessment per Share $115/share