CT2016-1795 Approval Letter

• Contract/PO #: CT2016-2795
• Contractor Name: Orchard Ranch Ditch Company
• Contract Type: Loan
• Loan Projects - Doc Type: Approval Letter

Orchard Ranch Ditch Company Agenda Item 18a
January 25-26, 2016 Board Meeting (Updated January 27, 2016)
Page 2 of 5
Background
The Company serves approximately 350 irrigated acres in Delta County, approximately 10 miles north
of the town of Delta, diverting all its supplies via a concrete diversion structure on Surface Creek. The
Company's ditch was constructed in the late 1800s by a group of early settlers cooperating to get water
to their new farms, and has been in continuous operation since that time. The Company seeks to
convert a ditch system to piping to improve system reliability and management, leveraging available
Federal funding for the related benefit of salt load reduction.
The Colorado River Basin Salinity Control Program (Salinity Control Program) is a US Bureau of
Reclamation (Bureau) program, active since the 1980s in the Gunnison Basin, with the goal of
controlling and reducing salt loading to the Colorado River. Beginning in 1995 the Bureau introduced a
basin-wide program to award Salinity Control Program grants to owners of irrigation delivery systems
through a competitive process to be offered approximately every three years.
The Company, in a successful bid to secure such funding, utilized a grant from the CWCB through its
Gunnison Basin Salinity Control Technical Assistance Program (authorized via CWCB Projects Bill HB14-
1333). This program assists qualifying owners of certain irrigation infrastructure in the Gunnison Basin
to plan for, and compete in, the Salinity Control Program by reimbursing them for a portion of the
engineering services required to complete the application. The Company was able to demonstrate
competitively effective and efficient use of Federal funding based on a cost per ton of salt reduction
over a twenty-five year period. The general criteria for a successful application is $50 to $70 per ton
of salt reduction, and the Company was able to demonstrate $53.16 per ton reduction.
The piping project will accomplish two main goals:
1) Decrease the amount of salt entering into the Colorado River by an estimated 1,004 tons each year
over the planned 50-year lifespan of the Project.
2) Modernize the irrigation delivery system for the shareholders of the Orchard Ranch Ditch. The piped
system will be pressurized for a third of the area served by the system, resulting in increased
opportunities for shareholders to implement water saving irrigation practices such as sprinkling. The
Project will also increase the amount of water available for irrigation by decreasing canal transit
losses.
Loan Feasibility Study
Paul Kehmeier, Company Vice President, prepared the Loan Feasibility Study titled "Feasibility of
Piping the Orchard Ranch Ditch", dated November, 2015, with technical assistance from Brian Deeter,
P.E. of J-U-B Engineers, Inc. The study includes an analysis of alternatives, preliminary engineering
design, and cost estimates in accordance with CWCB guidelines.
Borrower - Orchard Ranch Ditch Company
The Company is a Colorado mutual ditch company and a non-profit corporation, incorporated in 1915,
in good standing with the Colorado Secretary of State. The Company has 34 shareholders and has issued
17,280 shares of stock. The Company's revenues are derived from shareholder fees and assessments
charged on shares of stock owned by stockholders. The Company owns their main diversion structure,
two Parshall flumes, nine diversion boxes, and the ditch system itself, located within prescriptive
easements.
The Company has a three-member board of directors. The Company's by-laws authorize the
shareholders to determine assessments on all stock for the purpose of maintenance, upkeep, and
repairs. The Board has the authority to take measures to enforce assessments, including the suspension
of water deliveries and eventual sale or forfeiture of shares for failure to pay assessments.