PROJ00279

• Contract/PO #: C153572
• Contractor Name: North Poudre Irrigation Company
• Contract Type: Loan
• Water District: 3
• County: Larimer
• Bill Number: HB 85-1042
• Loan Projects - Doc Type: Feasibility Study

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late 1970's. The City of Thornton recently purchased Water Supply
and Storage water rights for approximately $1000 per acre-foot.

North Poudre water is currently selling for $3,400 to $3,800
per share. For the years 1957 through 1988 the cost of water
ranged from $75 per share to over $10,000 per share which relates
to a cost of $11.50 to $2,128 per acre-foot. The attached Figure
VII-1 shows the cost of water per share and the cost per acre-foot
for the years 1957 to 1988.

Based on this data, we have chose a value of $1000 per acre-
feet as being a reasonable and justified value to use for an
economic analysis. This value is higher than the cost of water
at the present time in Northern Colorado but is not as high as we
have seen in the past. With the completion of the Windy Gap
Project, the purchase of water by the city of Thornton and the
introduction of a high water use industry such as Anheuser-Busch,
the water picture in Northern Colorado is really in a state of
flux. What the trend will be in the future due to these influen-
ces can only be guessed at. However, the price of water is
currently rising and we would expect the price of water during the
life of this project to be much higher than the $1000 per acre-
feet used in the analysis.

Another way the value of the water was evaluated was to
determine the value of the crop produced by irrigation versus a
dry land crop. Figure VII-1 shows the estimated production on the
land served by Reservoir No.2. The analysis was based on an
estimate of the number of acres of each type of crop grown in the
area served by No.2 and applying the yield and price data from the
Colorado Agricultural Statistics for 1987 for Larimer County.
This analysis is for a general comparison and is not used to
provide a direct value of water as is the comparison with the
market value of water above. Also, the loss of Reservoir No.2
would not necessarily mean the loss of irrigation on this land as
the 3400 acres below No.2 could be irrigated from Reservoir No.15.
The evaluation does however quantify the large increase in the
economic base of agriculture with irrigation and shows the
importance of maintaining the ability to provide irrigation water
to Larimer County.

B. Financial Evaluation.
A cost analysis in comparison with the value of water was
conducted for the three alternatives proposed. The following
analysis is based on 1988 dollars and no projections for the
change in the value of the dollar or increases in costs or
interest rates are predicted. The total project costs used in the
evaluation include the interest that will be paid on the CWCB loan
and also include the cost of interest on the half that will be
paid by North Poudre at a 9% interest rate over 40 years. The 9%
loan is not anticipated by North Poudre but can be considered as
the loss of income from the money not being available.

VII-2