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<br />Abbott Ranch
<br />March 21-22, 2006
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<br />Agenda Item 17b
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<br />Alternative 4, Drill a replacement well and add a new well- This was selected since it allows
<br />the ranch to maximize its water rights and irrigation practices to the fuiiest extent possible. The
<br />additional well will allow both center pivots to operate concurrently, which will optimize hay
<br />production, critical during hot summer months, and will provide a back-up system in case one well
<br />becomes inoperable for a period of time.
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<br />Selected Alternative 4, Drill a replacement well and add new well- This alternative includes:
<br />1) drilling the 80-foot replacement well with 16" casing (40' steel and 40' stainless steei), using the
<br />re-built pump from the existing well, and connecting the replacement well to the existing system
<br />with 250 If of new 6" PVC piping; and 2) drilling a new80-foot well with installation of a new 60 hp
<br />pump, construction of 21 00 If of 6-inch PVC piping from the new well to the 80-acre center pivot,
<br />and installing power to the new pump from existing power in the area via 6 new poles. In addition,
<br />the Ranch has incurred costs of $12,678 in well-related expenses to-date, which will be included in
<br />the project. In March 2005, a well drilling company investigated the existing well and casing and
<br />determined that the pump could be re-built but the casing needed to be replaced.
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<br />The Total Project cost is estimated to be:
<br />
<br />1.
<br />2.
<br />3,
<br />4,
<br />5.
<br />6.
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<br />$ 36,270
<br />12,678
<br />62,730
<br />12,000
<br />26,630
<br />20,645
<br />$170,953
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<br />Replacement Well
<br />Prior Costs for Existing Well
<br />New Well, Pump, etc.
<br />Electric Power to New Well
<br />Piping, Fittings, Air Vent
<br />Contingency (15%)
<br />TOTAL
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<br />The proposed project is expected to increase annual hay production from 300 tons to 900 tons (2
<br />tons/acre to 6 tons/acre). Assuming 70% of the hay produced is sold as horse hay, the Ranch's
<br />annual income from hay sales would increase by approximately $78,500, with a corresponding
<br />increase in expenses of $13,500 for supplies and labor. Projected future average Ranch revenues
<br />(including cattle sales) would be $155,400, with corresponding projected future expenses at
<br />$72,050. The well drilling and construction would take place in Spring 2006 with completion in
<br />April/May 2006,
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<br />Policy Discussion - "On-farm" Improvements
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<br />This loan request has presented Staff with some interesting questions to consider pertaining to
<br />CWCB policy on making project loans to individuals for what might be considered "on-farm"
<br />improvements. An example of an on-farm improvement might be the lining of field irrigation laterals
<br />or purchasing and installing a pivot irrigation sprinkler system, as opposed to constructing a
<br />diversion structure, canal lining or dam repair for a ditch company, or a new or replacement well for
<br />a town or homeowners association. Historically, staff has refrained from considering this type of
<br />"individual" loan, however there have been some exceptions. A number of the recent loans for
<br />groundwater recharge/well augmentation projects along the South Platte have been made to
<br />individual borrowers, or "closely-held" corporations, and two loans have been made to individuals
<br />for reservoir improvement projects over the years, one such loan being the Porter Ranch on the
<br />western slope, and the other being to Owl Creek Reservoir north of Greeley.
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<br />Individual loans are not precluded by State Statute, as Section 37-60-119 (2), C.R.S. states that the
<br />Board may enter into contracts with "any agency or political subdivision of this state or the federal
<br />government, individuals, corporations, or organizations composed of citizens of this state." Staff
<br />feels that the Abbott Ranch loan request is an opportunity for the Board to discuss the issue of on-
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