C150008 Feasibility Study

• Contract/PO #: C150008
• Contractor Name: Leroux Creek Water Users Association
• Contract Type: Loan
• Water District: 40
• County: Delta
• Bill Number: HB 95-1155
• Loan Projects - Doc Type: Feasibility Study

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FINANCIAL PLAN

The Leroux Creek Water Users Association have an emergency loan from the Colorado Water
Conservation Board (CWCB) for $300,000 at all interest rate of 4%, and a term of 30 years. This
loan is for financing of up to 90% of the project cost not to exceed $300,000. No funds have been
drawn from this board authorization, The Company does plan to draw on this loan at the start of
1999 to finance the breach that was completed in 1998 and for a portion of the engineering and
investigation costs,

With this "Feasibility Study" the Leroux Creek Water Users Association is applying for a loan
from the CWCB to fmance the full rehabilitation of the reservoir which has an estimated total
project cost of approximately $1,389,000. Tbe loan as we understand will be for 90% of the
project cost, or approximately $1,250,100, at an interest rate of approximately 3.75%, for a term
of 30 years.

Revenue for operations and payment of loans is derived from assessments on shares of stock.
There are three categories of stock in the compaIlY; the Al shares, Bl shares, and B2 shares. The
Al and Bl shares provide the stockholders with approximately 1 acre-foot of water from direct
flow rights and storage rights the Company holdS. The B2 shares are for early water onIy and do
not entitle the share holder to any of the stored water. The Al shares include approximately 2843
shares that are the older issue certificates that originated with the inception of the company. The
B 1 shares include 2969 shares and are a later issue of stock and include the shares owned by the
town of Hotchkiss. The B2 stock includes 14,000 shares of stock that are assessed at a lower rate
because they do not pay for reservoir repair or maintenance,

The assessment levels are presented to the stockholders and approved at the armual stockholders
meeting held in December of each year. The assessments were level from 1993 to 1997 with an
assessment of $2.50 per share of stock on Al shares, $4.85 per share of stock on the Bl shares,
and $0,25 per share for the B2 stock. The assessments were raised in 1998 to $5.00 on the Al
shares and $7.35 on the Bl shares to pay for plarmed reservoir repair. The stockholders have
voted for a 1999 assessment not to exceed $15.00 per share as needed to proceed with the
rehabilitation of Carl Smith Reservoir Darn.

We believe the financial condition of the compaJlY to be solid based on the value of the land and
water rights associated with the Company. Based on the financial statements provided by the
Company they do have a po~itive cash flow; however, as is the case with most ditch companies
they do not have large cash reserves. Their cash reserve has been approximately $40,000 through
1996 and 1997 which is approximately equal to one year's expenditures. Much of this reserve has
been utilized however to care for fmancial obligations that have arisen from the failure of Carl
Smith Darn. They have onIy one outstanding obligation and that is to the North Fork Water
Conservancy District for their share in Paonia Reservoir. There has been no payment required
on this loan the past two years due to the way the payment is structured between the parties
involved in the project. In the past the Company has made payments of approximately $2000 per
year which has reduced recently due to the payments made by Montrose and Delta Counties. The

Carl Smith Dam Feasibility

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