BOARD00182

• Board Meeting Date: 3/21/2006
• Description: CF Section - Construction Fund and Severance Tax Trust Fund Perpetual Base Account New Loans - Orchard Mesa Irrigation District - Stokes Gulch Siphon Replacement
• Board Meetings - Doc Type: Memo

Orchard Mesa Irrigation District
March 13, 2006
Page 3 of 4

Agenda Item 17a

e

private property. This siphon is located on the Power Canal which is the oniy source of River fiows
to the power plant and the main source of water to the irrigators. The siphon has required numerous
repair efforts in the recent years and several areas are currently showing significant spailing and
exposed rebar.

The District has evaiuated four alternatives and deterrnined that the risk of a siphon faiiure is too
high and repair is needed. The District evaluated two primary options: repair or replace the Siphon.
Replacement was selected since repair would only prolong the need for repiacement. Two
construction techniques were evaiuated: Cast-in-place and Precast placement of the new 12ft x 12ft
concrete box sections. The precast option has been determined to be the most cost effective.
Alternatives evaluated are listed below:

1. Repair the Siphon
2. Replace the Siphon with cast-in-place concrete box sections
3. Replace the Siphon with precast concrete box sections
4. No Action

The District chose Alternative No.3 with a total Project cost estimate of $600,000

Total

$385,000
75,000
140,000
$600,000

Construction
Planning/Engineering
Contingency (30%)

e Financial Analvsis

Table 1 shows a summary of the financial aspects of the Project for the loan request. A CWCS
Loan of $540,000 wiil have an annual debt service obligation of $28,380 ($25,800 for annual loan
payment and $2,580 for the 10% reserve funding) for the loan terms of 2.5% for 30-years. The
interest rate is based on the standard agricultural interest rate. The District wiil use cash available
for the remaining 10% of the Project costs that are not financed by CWCS. The total debt service
obligation for this Project represents an annual cost of $0.50/ac-ft of water delivered to District
lands.

Table 1. Financial Summary of Project

Total Project Cost .
CWCS Loan (90% of Total Project Cost)
CWCS Annual Loan Payment
CWCS Loan Obliqation (includinq 10% debt reserve fundinq)
Annual Assessment for Project Only (based on 9,206 acres)
Annual Project Cost per Acre-Foot delivered (based on 58,300 AF)

$600,000
$540,000
$25,800
$28,380
$3. 1 O/acre
$0.50/ac-ft

e

Creditworthiness: The District currently has a 1997 CWCS loan (C153723) for the Mutual Mesa
Ditch Lateral Rehabilitation Project. Current balance is $392,627 with annual payments of $27,169
plus the 10% reserve funding. The District is current in the repayment and has been prompt with ail
payments. The District raised assessments in 2004 in anticipation of the capital improvements
needed on the water supply delivery system. As of December 2004, the District had $1.9 million in
cash reserves to begin a series of system improvements. Repayment of the loan wiil be
accomplished utilizing the current assessments.