BOARD00559

• Board Meeting Date: 1/24/2001
• Description: CF Section - STTFPBA New Loans - Colorado Water Protective and Development Association - Purchase of Water Rights
• Board Meetings - Doc Type: Memo

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Proposed Purchase

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Twenty of the wells in CWPDA are not Rule 14 wells, meaning their depletions must be
covered by a Substitute Water Supply Plan and, eventually, a PI,1n of Augmentution. Four
of the 20 non-Rule 14 wells are covered by Fry-Ark return flows while 16 will require the
lease or purchase of water which is the subject of this loan request. The estimated average
depletions from these 16 wells are 1865 acre-feet per year. The wells are located from
Leadville to La Junta as shown on the attached maps.

CWPDA has purchased 87.35 shares in the Bessemer Ditch to be used as a source of
replacement water for the 16 wells. The average annual consumpti ve use from these
shares is estimated at 168 acre-feet. The shares were used for the irrigation of 92 acres of
land that will be dried up and revegetated. The difference between the average annual
depletions of 186.5 acre-feet and the replacement water of 168 acre-feet will be made up
initiully by leasing about 18 acre-feet.

The Bessemer headgate is locuted in Pueblo Reservoir and the service urea is generally
east of Pueblo on the south side of the Arkansas River. The Bessemer system has u total
of IS direct flow rights and one storage right. Appropriation dates range from 1861 to
1887 and water has been availuble in virtually every year of operution. Only the most
junior water right would be out of priority in drought years.

In October 1999, W,W. Wheeler (Wheeler) of Englewood submitted a comprehensive
feasibility study for the purchase or leuse of a nUmber of water sources for offsetting
CWPDA's well depletions. Wheeler and CWPDA also submitted a supplementury report
for the purchase of the Bessemer shares in Junuary 2001.

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In January 2001, Wheeler submitted an appraisal of the 87.35 Bessemer shures. The
appraisal indicates un average value per share of $4,220 or about $2,200 per acrc-foot of
consumptive use. At $4,220 per share, the estimated market value of the 87.35 Bessemer
shares would be about $368,600.

Loan Request

CWPDA acquired the 87,3 Bessemer shares at a cost of $245,]21 finunced through loans
from the Community Bank of Southern Colorado and from CWPDA's own water
acquisition account. The commercial bank loan was made at 9.0 percent for 30 years.

The total estimated cost of the project including ,the loans for acquiring the shares,
engineering costs and an augmentation (flow-measuring) station is summarized in Table
1.

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