BOARD02413

• Board Meeting Date: 3/22/2005
• Description: CF Section - Construction Fund/Severance Tax Trust Fund Perpetual Base Acct. New Loans Lower Sacramento Creek Reservoir Company - Reservoir Rehabilitation Project
• Board Meetings - Doc Type: Memo

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Lower Sacramento Creek Reservoir Company
March 15, 2005
Page 3 of 4

Agenda Item 14a

The augmentation water is stored from May through September and then released from October
through April to replace the depletions from the various augmentation plans. By 1984 it was obvious
that there was considerable leakage from the Reservoir and the loss prompted the Company to
make application to Water Court to receive credit for the leakage (84CW250 and 85CW465). The
leakage has been sufficient to cover the current winter depletions.

Proiect DescriDtion

The original purpose for the Project is to eliminate seepage loss in the Reservoir. The Company's
engineer, KRW Consulting, Inc. evaluated several alternatives. The alternatives are as follows:

1. The no-action alternative at this time.
2. Line the sides with PVC or clay ($235,000).
3. Line the sides with PVC or clay and install riprap armor ($618,000).
4. Line the sides and bottom with PVC or clay ($281,000).
5. Line the sides and bottom with PVC or clay and install riprap armor ($646,000)

Alternative 4 was selected, howeyer during the site survey it was determined that the Reservoir
capacity is.26 AFinstead of the decreed 37 AF as shown in the original construction pians. Due to
this discrepancy Alternative 4a was developed, which includes increasing the capacity to 35 AF. The
Company decided not to increase the storage to the decreed .storage right of 37 AF. The expanded
Reservoir of 35 AF will cover all shareholder augmentation storage requirements except for MMRC.
MMRC can reduce their storage space required since it has not been committed to a specific
augmentation plan. This reduction in storage will also reduce the shares in the Company to 3500.

Alternative No. 4a, involves excavating material from within the high water level, preparing a suitable
bed for the.30 mil PVC liner, placing a protective cover/ballast material, and replacing riprap where
necessary. KRW has submitted construction plans to the SEO for review. Construction is expected
to begin June 2005 and to be completed by August 2005.

Total Project cost estimate is:

1.
2.
3.

Planning/Permitting/Engineering
Construction
Contingency

$66,567
. 349,017
79.488
$495,072

TOTAL

Financial Analvsis

Table 2 shows a summary of the financial aspects of the Project for the current loan request A
CWCB Loan of $371,300 will have an annual debt service obligation of $29,392 ($26,720 for annual
loan payment and $2,672 for the 10% reserve funding) for the loan terms of 3.75% for 20-years. The
interest rate was determined based on the median income for unincorporated Park County, which is
$51,900/household. This is in the CWCB middle-income category, which establishes a 4.0% interest
rate for a 30-year loan. The rate is reduced by 0.25% to 3.75% for a 20-year loan. The total debt
service obligation represents a cost of $840 per AF of reservoir storage.

Table 2. Financial Summary of Project

Total Proiect Cost $495,072
CWCS Loanf75% of Total Proiect Cost\ $371,300
CWCB Annual Loan Pavment $26,720
CWCS Loan Obiklationnncludina 10% debt reserve fundii1a\ $29,392
Annual Assessment for Project Only (based on 3500 shares) $8.40/share
Annual Project Cost per Acre-Foot (based on 35 AF of consumptive water) I $840/ac-ft