C153808 Feasibility Study

• Contract/PO #: C153808
• Contractor Name: Arkansas Groundwater Users Association
• Contract Type: Loan
• Water District: 14
• County: Pueblo
• Bill Number: ARA
• Loan Projects - Doc Type: Feasibility Study

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for the 177 Venezia owned FMIC shares. Thus, the cost to purchase 177 FMIC shares is estimated to
be $265,500. Other costs associated with the purchase of FMIC shares by AGUA would include: 1)
annual assessments (1997 assessment $25 per shale), 2) legal and engineering costs associated with
changing the shares from irrigation use to augmentation use in a Water Court proceeding, and 3) a one
time cost to use the Spring Creek augmentation station and a nominal annual fee for operation and
maintenance (O&M) of the Spring Creek augmentation station.

The annual FMIC ditch assessment has varied from $15 per share to $35 per share over the last 10
years, and has remained at or near $25 per share for the last few years. Using the $25 per share ditch
assessment for 177 FMIC shares, the 1997 assessment would be $4,425. Converting the annual
assessment of $4,425 to a present worth cost using a 40-year project life with a three percent discount
rate results in a 1997 present worth cost of $102,300 for ditch assessments.

The attorney and engineering costs associated with changing the water rights from irrigation to

augmentation use for the FMIC, as well as the other water rights purchase alternatives are considered

similar. The engineering and attorney costs are estimated to be $100,000 for each water right

purchase alternative. This estimate may vary considerably depending upon the degree of opposition

involved in the change of use of a water right.

The estimated construction cost for the Spring Creek augmentation station by the FMIC is $6,000. The
Ditch Company estimates that there are presently 700 to 1,000 FMIC shares that will run augmentation
water through the Spring Creek augmentation station. Thus, an additional 177 shares run through the
Spring Creek augmentation station would increase the total shares run through the structure to
between 877 and 1,177 shares. The Ditch Compar1Y intends to levy a one-time fee to shareholders
who use the augmentation station to recapture its capital investment. Thus, the one-time fee for use of
the augmentation station may range from $5.10 pel share to $6.84 per share. Using the upper end
cost of $6.84 per share, the one-time fee for running 177 FMIC shares through the Spring Creek
augmentation station is approximately $1,200. The Ditch Company will also assess an annual O&M
fee for the users of the Spring Creek augmentation station. The O&M fee will be shared equally by the
shareholders who use the Spring Creek augmentation station, and the fee is expected to be in the
$1.00 to $2.00 per share range. Using the upper range of cost for O&M, the 177 FMIC shares run
through the Spring Creek augmentation station would cost $354 per year. Converting the $354

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