BOARD00336

• Board Meeting Date: 7/28/2003
• Description: CF Section - New Loans - Windsor Reservoir & Canal Company - Storage Recovery Project for Windsor Reservoir No. 8 and No. 8 Annex
• Board Meetings - Doc Type: Memo

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Windsor Reservoir & Company
July 28-29 2003

Agenda Item 21a

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Alternative 3, Excavate and recover a portion of the lost storage, 620 acre-feet ($750,000) _
This alternative allows WRCC to recover lost storage at a reasonable cost with a minimum of
design and regulatory control. Based on the amount of area necessary to store the excavated
material as well as the amount of area that can be excavated by conventional equipment, it was
determined that 1,000,000 cubic yards of earth materials could be removed. This would provide an
additional 620 acre-feet of storage which allows WRCC to supply irrigation water for an additional 3
days. This is significant because the total number of days the system normally runs is 30 to 45
days.

Selected Alternative 3, Excavate and recover a portion of the lost storage, 620 acre-feet was
chosen as the desired alternative. This alternative is least costly, in terms of cost per acre-feet of
storage, and can be initiated immediately, as opposed to Alternative 2 that would take several years
to plan, permit, and bring to completion. Approximately 1,000,000 cubic feet of material will be
removed and spread over 30 acres of land adjacent to the reservoir. The fill area will be seeded
and wind and water erosion addressed.

Total Project cost is estimated to be:

1.
2.

Construction Costs
Engineering Fees & Contingency
TOTAL

$700,000
50,000
$750,000

The implementation schedule calls for initiation of the project in 2003 and completion in Spring
2004. Approximately 38% of the project has been competed to date, prior to the 2003 irrigation
season. Contact with the Corps of Engineers indicated that the silt removal project falls under their
. nationwide permit.

Financial Analvsis

The total estimated cost of the project is $750,000, and WRCC water is used exclusively for
agricultural purposes. Staff is recommending a 30-year maximum amount of $675,000 (90% of the
estimated project cost) for 30 years at an interest rate of 2.50%. WRCC has sufficient cash assets
to cover its $75,000 share of the project.

Alternative financing sources: The Company has investigated alternative financing with the
Farmer's Bank in Eaton, Colorado. The bank indicated they would consider a loan for the
company after review of their financial status. The loan would initially be a one year revolving line
of credit, prime plus 1 Y. percent, floating, with an up front loan fee of Y. percent. As of May 1,
2003, the prime rate was 4.25% that would set the loan rate at 5.5% plus the Y. % loan fee.

Table 1 is a summary of the financial aspects of the project. A CWCB Small Project Loan of
$675,000 would have an annual payment of $35,475 (including the 10% reserve requirement) at the
loan terms of 2.50% for 30 years. This represents an annual loan cost of $$57.22 per acre-foot,
based on an average annual delivery of 620 acre-feet. The CWCB loan will be repaid from
increases in the base assessment rate from $400/$380 to $520/$500 per share.

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