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Town of Coal Creek March 24-2625, 2001 Agenda Item 24f, (Updated March 28, 2003) Page 2 Water Riahts Coal Creek owns a 1 CFS water right out of the "Coal Creek Pipe", with a priority date of 1884. The average annual total diversions for this water right have been 90 acre-feet, for the period 1971-1994. This water right was out of priority for portions of 1977,1978, and 2002, The Town of Coal Creek The Town of Coal Creek is a Colorado municipal corporation with the authority to set water rates, issue debt, and provide services in accordance with the laws of the State of Colorado, The Town is subject to the provisions of T ASOR and plans to repay the CWCS loan using revenues from its water enterprise fund, Proiect DescriDtion Three alternatives were analyzed in the feasibility study: 1, The no-action alternative, 2, Purchase sufficient Union Ditch and Fremont County Ditch shares to satisfy the Town's existing water need of 34 acre-feet consumptive use, 3. Purchase sufficient Union Ditch shares to satisfy the Town's existing water need of 34 acre- feet consumptive use, Alternative 2, Purchase sufficient Union Ditch and Fremont County Ditch shares to satisfy the Town's existing water need of 34 acre-feet consumptive use, was ruled out because the consumptive use per share from the Fremont County Ditch has not been established in water court, It could take up to 10 years to obtain such a ruling, with uncertain outcome. Alternative 3, Purchase sufficient Union Ditch shares to satisfy the Town's existing water need of 34 acre-feet consumptive use, is the preferred alternative, Union shares have been transferred to municipal use in the past. Each share produces approximately 1.25 acre-feet, of which 27% is allowable consumptive use, The no-action alternative is unacceptable since it means the Town's water rights will be out of priority during dry years, most likely including the present year, Selected Alternative 3 involves purchase of up to 100 shares of the Union Ditch Company, 100 shares equates to approximately 125 acre-feet, of which 27%, or 34 acre-feet is allowable consumptive use, Coal Creek's current annual water need is 34 acre-feet, consumptive use. The cost of Union Ditch shares is in the range of $600 to $750 per share such that the cost of 100 shares would be in the range of $60,000 to $75,000. Financial Analvsis The high estimated cost of the water rights purchase is $75,000, Staff recommends a Small Project loan from the Construction Fund in amount of $67,500, which is 90 percent of the total cost. The Town will fund its 10% from existing cash reserves. Water is used for municipal purposes and the Town of Coal Creek has a Median Household income that is less than 80% of the statewide average, The CWCS municipal "low income" rate of 3,75% for 30 years would apply to this loan, Table 1 is a summary of the financial aspects of the project. A CWCS loan of $67,500 would have an annual payment of $4,165 (including the 10% reserve requirement.) This payment would be made from current net income so that the monthly water bill would not increase, 2