BOARD01816

• Board Meeting Date: 11/19/2001
• Description: CF Section - Proposed Statute Revisions Construction Fund and Severance Tax Trust Fund Perpetual Base Account
• Board Meetings - Doc Type: Memo

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The draft BBA feasibility study provides an estimate by the District of the value of the
assets being acquired. The analysis was done,hy conservatively estimatingthe.amQunts..of
water the EDWD would purchase in each year of the next 30 years and the price of the
water under the terms of the 1983 MOA between the District and Vidler. The present
value of the total annual payments for 30 years was calculated using a 5.00 percent
discount factor. The resulting present value was $3.40 million. The cost per acre-foot for
94 acre-feet of consumptive use plus the five acre-feet of storage water amounts to about
$34,000.

Using comparable sales information from 1998, BBA estimated the purchase price of
augmentation water in the Dillon area at about $39,000 per acre-foot. Escalated for
inflation at 3.00 percent in the last three years, the year 2001 cost would be about $42,000
per acre-foot. An evaluation by BBA of water available to lease in the Dillon area
indicates a present value of $55,000 per acre-foot.

CWCB Instream Flows

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In an MOA dated October 25, 1988 between Vidler and the CWCB, Vidler agreed not to
oppose II number of the Board's instream flow filings in the Blue River Basin. In return,
the Board agreed to allow Vidler and its designees to utilize 19 acre-feet of storage in
Dillon Reservoir, directly or by exchange in the Blue, Swan and Snake Rivers. The
Board reserved the right to file a statement of opposition to any application involving the
Dillon water to ensure the terms and conditions of the MOA are met. The EDWD is
aware of and will comply with the applicable terms of the CWCB MOA.

Vidler has filed a plan for augmentation in Case No. 97CW305 involving a portion of the
19 acre-feet mentioned above. This augmentation plan may include the 5 acre feet of
Dillon water conveyed to EDWD in the December 2000 Purchase Agreement. The
CWCB has filed a statement of opposition to this augmentation plan, pursuant to the
MOA, to ensure instream flow water rights are not injured.

As mentioned above, the December 2000 Purchase Agreement between EDWD and
Vidler includes 5 acre-feet of the Dillon water and an interest in the plan for
augmentation as part of the conveyance to EDWD. The EDWD is not currently a party to
the pending augmentation plan application and does not intend to obtain water under that
augmentation plan. The EDWD understands that CWCB loan funds may not be used to
purchase an interest in the plan for augmentation.

Loan Request

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The EDWD is requesting a 30-year loan for $2.55 million, which represents 75 percent of
the $3.40 million purchase price of the assets to be acquired. Since median household
income (MHI) figures are not available for the District, the unweighted average MHI for
the two nearby communities of Dillon and Prisco was used to estimate the MHI for the

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