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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Chapter VIII - Funding Analysis for Purchase of Replacement Source

The present worth total cost of $889,300 associated with the purchase and use of 1,007 shares of the

Excelsior Irrigating Company by AGUA was discussed in Section E of Chapter VI. The $889,300 cost

estimate included the following components: $650,000 for purchase of the 1,007 shares, $33,000 for

costs associated with recent ditch improvements (i.e., new river head agate and trash rack, and a new

rated section of the wasteway equipped with a stage-recorder), $100,000 for engineering and legal

fees to change the decreed use of the water right from irrigation to augmentation, $4,028 per year in

annual ditch assessments (present worth cost of $93,100), and $570 per year to lease water to pay

back estimated winter return flow obligations (present worth cost of $13,200). AGUA is seeking a

loan from the Colorado Water Conservation Board (CWCB) Arkansas River augmentation loan account

for $650,000 to purchase 1,007 shares of the Excelsior Ditch Company stock.

The term and rate for the CWCB loan is requested to.be 40 years and three percent. At this rate, the
annual costs of the $650,000 loan would be $28,121. Other annual costs associated with the water
rights purchase and use by AGUA are estimated to be $4,598 ($4,028 per year for annual ditch
assessments and $570 per year for lease of winter return flow water), making the total annual payment
for the Excelsior Ditch water $32,719. In addition to the new loan for the purchase of the Excelsior
Ditch shares, AGUA has a $25,000 feasibility study loan from the CWCB with a term of 10 years and
an interest rate of 4 percent. The annual debt service on this loan is $3,082 per year. AGUA's
obligation of the Excelsior Irrigating Company's small project loan from the CWCB construction fund
for headgate improvements is $33,000. The annual debt service on this loan, which has a term of 30
years and an interest rate of 3.75 percent, is $1,851. AGUA's total annual repayment obligations for
these three loans is $33,054 for the first ten years, $29,971 for the following 20 years, and $28,121 for
the final ten years. AGUA has sufficient funds in a certificate of deposit to commit $33,054 to a loan
reserve fund which would be adequate to make one annual payment on the three loans.

In addition to the debt service on the three loans and the annual expenses projected for the Excelsior
ditch, AGUA's annual operating expenses are projected to be $154,812 during 1998. This amount
provides for leases of water rights for replacement of depletions, legal and engineering expenses, well
tests, and general office expenses. An analysis of AGUA's annual revenues and expenditures
including the purchase of the 1,007 Excelsior Ditch shares is shown on Table VIlI-1.

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