02000000008 Feasibility Study

• Contract/PO #: 02000000008
• Contractor Name: Lake Canal Reservoir Company
• Contract Type: Grant
• Water District: 0
• County: Larimer
• Loan Projects - Doc Type: Feasibility Study

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places the rehabilitation cost near the current value of the water. However, the cost is expected
to be less than the future value of the water and should prove to be a good invesunent.
Following is a cost to benefit analysis of the project.
Total Project Cost including interest
$26,900 x 30 years + $4,240 + $48,600 = $ 859,840
Total Cost oer Share of Stock
$859,840 = 160 = $5,374
Cost Per Share of Stock Per Year
$5,374 = 30 years = $179
Cost Per Acre-foot Of Water Delivered For An Average Year
$859,840 = (111 A-Ft x 30 yrs) _ $258
The current value of the water is expected to be in the range of $6,000 to $8,000 per acre foot.
This is based on the price of water sold in Northern Colorado over the past year. Over the 30 year
life of the loan the value would be expected to be much higher than the current value of the water.
For the analysis we have used the upper end of the current value due to this.
Benefit/Cost =[$8,000 x 111 A-Ft] =$859,840 = 1.03
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At the current value of water the project barely has a positive benefit to cost ratio. This ratio
would be expected to be greater than this if the future value of the water is utilized.
COLLATERAL
The Lake Canal Reservoir Company can offer the following collateral for the CWCB loan.
' 1. The revenue from assessments as allowed by the Company By-Laws and Articles of
Incorporation.
2. A certificate of deposit account in the amount of one annual payment to be held by the
' State Treasurer.
3. Assignment of the land the reservoir occupies.
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Gray Lake-Feasibiliry Study
Page 10
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