PROJ00193

• Contract/PO #: C153800
• 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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Financial Analysis
Rocky Mountain Consultants has submitted a detailed 40-year projection of revenues and
expenditures for AGUA over the assumed period of CWCB debt retirement. AGUA is
requesting a 40-year loan at a 3.0 percent lending rate. Table 3 gives AGUA's current fee
structure and the projected fee structure after a $650,00 loan. The augmentation cost per
acre-foot of water pumped, using 19,452 acre-feet, amounts to about $10 per year in
current dollars.

Table 3. AGUA Fee Schedule

Current
$205.00
$50.00
$9.44

Future
$225.00
$60.00
$1D.68

Discussion
The Excelsior Ditch is not a senior water rigl1t but does have a good record of diversions.
The Ditch has diverted water in all but one year (1977) since 1908. The 1,007 shares
proposed for purchase should provide a reliable average yield of about 750 acre-feet.

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Staffhas reviewed AGUA's financial statement for 1996 and detailed budget projections
for 1997 and 1998. All of these items (along with the 40-year projection described
above) indicate that revenues are or will be sufficient to provide for operating expenses
and debt service on the loan. The increase in well fees and water charges in Table 3
appear reasonable and appropriate to cover eiCpenses plus debt service.

As collateral for the loan, AGUA will pledge the 1,007 shares in the Excelsior Ditch and
revenues from membership fees. Staffhas requested that AGUA submit an llppraisal of
the Excelsior water rights prior to entering into a loan contract.

AGUA's articles of incorporation give the Association the powers to establish and collect
charges for all costs incurred in doing business and providing augmentation water. In
addition, the application and membership agreement signed by each member includes a
commitment to abide by the Rules and Regulations of the State Engineer's Office for
groundwater use in the Arkansas Basin as well as an agreement to cease pumping in the
event of failure to pay membership fees.

Staff finds the AGUA proposal to be economically, financially and technically feasible.
In addition, the proposal and the Association appear to meet all of the requirements for
the Arkansas River Augmentation Loan Account as set forth in C.RS. 37-60-130(3) .
provided that the collateral is adequate based upon the results of the appraisa1.

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