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I I I I I I I I I I I I I I I I I I I Mditional advantages include: 1. The plant can be designed, built and placed into operation. in less than a year where a conventional project would take a year and a half. 2. There is reduced risk to the 'I'ovm due to expanded opera- tional and warranty guarantees. 3. Project costs are reduced significantly due to elimination of the contractor's markup on equiprrent, lc:wer overhead, reduced contingencies and lower engineering costs. d. North Poudre Negotiations The 'I'ovm presently c:wns 53 shares of North poudre Irrigation Co. stock. The Tc:wn therefore requested that they be allc:wed to take delivery of their shares of water at the No. 3 Reservoir. The Irrigation Ccmpany, however, has a policy that they will not deliver municipal water through their system on a share basis due to financing limitations on their loans, plus the fact that their i=igation system is not set up to deliver water on a year round basis. Their position is that, although V€llington' s demand is insignificant COllpared to the volurre of water in Reservoir No.3, if they open the door to this type of arrangerrent, they will be overwheJ.rred by other requests in the future. As an alternative, the Irrigation CoI1lJal1y has agreed to accept the 'I'ovm's 53 shares in exchange for the granting of a perpetual right to the Tc:wn of 275 acre feet per year. For this right the Tc:wn will pay the Irrigation Ccmpany a sum equal to the annual assessrrent on the original 53 shares. For all water used in excess of the 275 acre feet the 'I'ovm will pay for the water on a per thousand gallon basis. The armunt of this charge will be detennined annually by the follc:wing formula: charge per 1,000 gal (l + O. 07) X (P x I + A + N) 326 (1,000 gal/AF) Where: P = Average cost per share for North Poudre stock during previous 12 rronths. I = Actual interest rate charged by the Federal Land Bank Association. A = Armua1 North Poudre assessrrent per share. N = Northern Colorado Water Conservancy District charge for delivery of domestic water. 0.07 = Irrigation CoI1lJal1y charge for delivering water year round of (7%) . The principal advantage of this agreerrent is that it provides for a continual water supply of 275 acre feet regardless of the yield per share to the existing residents at little increase in cost over the actual c:wnership cost of their existing shares. Another advantage is that the Irrigation Company will lease the land for the treatment plant and tank for no additional cost. FUrtheITIDre, the Irrigation Conpany will ccmnit to supplying additional water for future grCMth at the agreed to price if the Tc:wn pays a reservation fee of $6 per acre foot per year. 9