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<br />" <br /> <br />) <br /> <br />. <br /> <br />. <br /> <br />. <br /> <br />3T Cattle Company <br />May 24-27, 2004 <br /> <br />Agenda Item 21 b <br /> <br />Alternative 1, No-action alternative - This was not acceptable. If a project were not pursued, <br />3TCC would run out of an augmentation supply on the August 22, 2004. At such time and <br />according to water law the well could no longer pump. Since this is the only supply of water for the <br />feedlot, it would have to close down. This alternative is not acceptable to 3TCC. <br /> <br />Alternative 2, Purchase senior water rights to use for augmentation - This alternative is <br />currently used by many municipalities to meet their augmentation needs. Shares of senior water <br />rights for sale are limited but provide more certainty than junior recharge rights. The cost of this <br />alternative is $275,000. <br /> <br />Alternative 3, Construct recharge ponds filled using a junior water right - This alternative is <br />currently used by many of the farms located around the feedlot. 3TCC could purchase <br />acceptable ground for the construction of recharge ponds filled either by a ditch system or a <br />recharge well. The ponds would be filled with a junior water right. The cost of this alternative would <br />range from $250,000 to $500,000. The uncertainty of a junior water right makes this alternative not <br />acceptable to 3TCC. <br /> <br />Selected Alternative 2, Purchase senior water rights to use for augmentation - 3TCC plans to <br />pursue Alternative 2. Features of this alternative are as follows: <br /> <br />1. Purchase up to 5 shares of the Weldon Valley Ditch Company. <br />2. Convert the shares to augmentation use and incorporate the water into a court approved <br />augmentation plan, or join an existing group augmentation plan. <br /> <br />The Total Project cost is estimated to be: <br />1. Planning and Engineering Costs <br />2. Water Costs <br /> <br />$ 5,000 <br />270.000 <br />$275,000 <br /> <br />TOTAL <br /> <br />Note: Costs do not include any legal and engineering costs to obtain a change in use of water <br />shares or augmentation plan approval by water court. <br /> <br />Financial Analvsis <br /> <br />The total estimated cost of the project is $275,000. Staff is recommending a maximum loan amount <br />of $247,500 (approximately 90% of the estimated project cost) for 30 years at an interest rate of <br />2.5%. 3TCC will pay the additional $27,500 of the project cost. <br /> <br />Table 1 is a summary of the financial aspects of the project. A CWCS Loan of $247,500 would <br />have an annual payment of $13,008 (including the 10% reserve reqUirement) at the loan terms of <br />2.5% for 30 years. The annual loan cost for the project will be $138 per acre foot of water diverted <br />annually from the well, assuming an average of 95 AF of consumptive use. <br /> <br />Table 1. Financial Summa <br /> <br /> <br />$275,000 <br />$2,895 <br />$247,500 <br />$13,008 <br />$138 <br /> <br />Page 3 of 5 <br />