CT2016-2001 Approval Letter

• Contract/PO #: CT2016-2001
• Contractor Name: Tunnel Water Company
• Contract Type: Loan
• Loan Projects - Doc Type: Approval Letter

Tunnel Water Company Agenda Item 22c
September 15-17,2015 Board Meeting(Updated September 18, 2015)
Page 2 of 4
Background
The Company is located in Larimer County and operates the Laramie-Poudre Tunnel (Tunnel), aka
Laramie River Tunnel, for the benefit of its two shareholders: Water Supply and Storage Company
(WSSC) and Windsor Reservoir and Canal Company (WRCC). The Tunnel diverts from the Laramie River,
a tributary of the North Platte River, about 60 miles west of Fort Collins, and delivers water through a
2.15-mile tunnel to the Cache la Poudre River. WSSC was founded in 1891 and delivers irrigation water
to its shareholders, primarily for agricultural irrigation on approximately 40,000 acres lying below the
Larimer County Canal. WRCC was founded in 1890 and delivers water to its municipal shareholders via
the Soldier Canyon and Bellvue Water Treatment Plants.
The Tunnel was originally built in 1910. The Company purchased the Tunnel and its adjoining Laramie
River System in 1938. Significant construction occurred in 2001 when the mid section of the tunnel
collapsed. That repair was funded through CWCB loans (C150052 Et C150065). There is a current
concern that the west portal infrastructure, as well as the east portal's energy attenuation structure,
are at the end of their service life.
Loan Feasibility Study
Dennis Harmon, General Manager of the Tunnel Water Company, with assistance from John Andrew,
PhD, P.E., of Andek Consulting, prepared the Loan Feasibility Study, titled "Feasibility Study: Laramie-
Poudre Tunnel West Portal Reconstruction Et Rehabilitation of East Portal Energy Attenuation
Structure," dated July 2015. The feasibility study was prepared in accordance with the CWCB
guidelines.
Borrower - The Tunnel Water Company
The Company is a mutual ditch company that was incorporated in 1938. Its office is located in Fort
Collins. It operates as a nonprofit corporation and is in good standing with the Colorado Secretary of
State. The Company has 450 shares of stock, owned by 2 shareholders: WSSC (2/3 interest) and WRCC
(1/3 interest). The Company's revenues are primarily derived from share assessments.
The Company's Articles of Incorporation provide the five-member Board of Directors with authority to
levy assessments to meet the expenses of operation and maintenance of the Company, including the
repayment of debt. The Articles of Incorporation were amended in 2012 to provide the Board with the
power to borrow money and provide Company property as security for debt. The Company's By-laws
provide the authority to enforce unpaid assessments by ceasing water deliveries and eventually by
selling delinquent stock shares.
Water Rights
The water rights of the Company include:
TABLE 1: WATER RIGHTS
Appropriation Water Court
Name Amount Date Adjudication Date Case No.
Laramie River Tunnel 300 cfs 8/25/1902 2/20/1914 CA2725
McIntyre Ditch 40 cfs 8/25/1902 2/20/1914 CA2725
Rawah Ditch 225 cfs 8/25/1902 2/20/1914 CA2725
Rawah Lower Supply Ditch 275 cfs 8/25/1902 2/20/1914 CA2725
The Laramie-Poudre Tunnel is one of five transmountain diversion structures included in the Laramie
River Compact between Colorado and Wyoming. The Laramie River Compact sets the maximum annual
volume to be diverted by all transmountain users to be 19,875 AF per year. On average, 16,040 AF per
year runs through this tunnel, of which 6,875 AF belongs to the Company, with the remainder being
water solely owned by WSSC.
Project Description
The goal of this Project is to extend the service life of the Tunnel and improve maintenance access.
The west portal (inlet) has deteriorated since it was originally constructed in 1910. The interior timber
cribbing and concrete lining are near the end of their useful lives and the steepness of this section