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<br /> <br />. <br /> <br />. <br /> <br />. <br /> <br />Stleb Brothers, Inc, - Well Augmentation Project <br />March 25-26, 2003 <br /> <br />Agenda Item 24b <br /> <br />Selected Alternative 3, Construct recharge ponds filled using recharge wells was selected as the <br />desired alternative, This alternative would consist of drilling 2 wells to pump water into two <br />recharge ponds in winter months when there is not a call on the river. Water from the ponds would <br />have a delayed return to the river in summer months when SBI has depletions that need to be offset <br />with augmentation water. The 2 wells, drilled within 100 feet of the South Platte River, would pump <br />up to a combined maximum rate of 13.4 cfs producing up to 6000 acre feet annually. They would <br />pump to the recharge ponds through 6500 lineal feet of 18" buried PVC piping. The recharge <br />ponds would use natural topography to minimize earthwork for containment. An existing irrigation <br />well will be converted for supplying augmentation water directly to the river, using the pipe in ' <br />reverse to return "stored" water to the river when necessary. This is a drought management tool <br />currently being used by GASP, with approval from the State Engineer, to help provide augmentation <br />water during the most severe drought situations. An added benefit of developing the reCharge <br />ponds would be wildlife habitat enhancement. <br /> <br />The total project cost is estimated to be: <br /> <br />1. <br />2. <br /> <br />Planning and design costs <br />Construction (w/Contingency) <br />TOTAL <br /> <br />$ 2,000 <br />200,000 <br />$ 202,000 <br /> <br />The project schedule, following CWCB approval, will be to complete construction in early April <br />2003, with the project operational by the end of April 2003. One recharge well and pump, as well <br />as the piping to the large recharge pond, have already been constructed uSing SBI funds. <br /> <br />Permits- SBI expects to be exempt from Corps of Engineers 404 permitting, but will confirm this <br />with the Denver office. Recharge well permits have been issued and the augmentation well permit <br />has been applied for and is under review. Easements for right-of-way from neighboring properties <br />for the wells and pipeline have been agreed to verbally and formal agreements are in process. <br />SBI will provide CWCB with copies of the recorded easements when they are available. <br /> <br />Financial Analvsis <br /> <br />The total estimated cost of the project is $202,000, and water is to be used exclusively for <br />agricultural purposes. Staff is recommending a loan for a maximum amount of $151 ,500 <br />(approximately 75% of estimated project cost) for 20 years at an interest rate of 2.5%. SBI has <br />sufficient cash assets budgeted to cover its $50,500 share of the project. <br /> <br />Alternative financing sources: The Company investigated alternative financing at several local <br />lending institutions but found that the project is outside of the scope of typical financing <br />arrangements. <br /> <br />Table 1 is a summary of the financial aspects of the project. A CWCB Small Project Loan of <br />$151,500 would have an annual payment of $10,690 (including the 10% reserve requirement) at the <br />loan terms of 2.5% for 20 years. This represents an annual loan cost of $1.78 per acre-foot, based <br />on an average annual recharge diversion of 6000 acre-feet. SBI anticipates that its loan payment <br />can be offset with savings in GASP assessments and revenue generated from the lease of excess <br />augmentation credits from the project. <br /> <br />Page 3 of6 <br />