PROJ00454

• Contract/PO #: C153832
• Contractor Name: DeWeese-Dye Ditch and Reservoir Company
• Contract Type: Loan
• Water District: 12
• County: Custer
• Bill Number: HB 98-1189
• Loan Projects - Doc Type: Feasibility Study

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Feasibility Report for Dam Safety Modifications to De Weese Dam
April 22, 1997

25

5, The Company will make payments to the CWCB for the current feasibility Study
Loan until project construction is complete, at which time the Feasibility Study
loan will be wrapped into the construction loan. The terms of the Feasibility
Report loan are 3.25 percent for 10 years.

6, An Emergency Operating Fund will be established by the Company to help offset
costs that are beyond the scope of the Company's normal operation, maintenance
and replacement costs, Annual payments in the amount of 10 percent of the
armual repayment amount of the CWCB loan will be made to the fund for the fIrst
10 years of the loan, Assuming the full fund amount is available, the last payment
to the CWCB loan will be made from the Emergency Operating Fund.

6.5 ASSESSMENT OF FIIYANCIAL IMPACT

The principal fInancial impact of the proposed dam safety modifIcation project is the required
increase in the armual assessments to shareholders, As shown in Table 8, the project costs
developed for this report will require a long-term cost to shareholders of between $5.30 and
$5,83 per share, assuming a total of 7250 shares. This cost is signifIcant when compared to
current assessments; but the consequences of not proceeding with dam safety modifIcations are
also signifIcant, as described in Section 3.5. Total shareholder assessments, including the
proposed project costs, are estimated to be between $13.30 and $13.83 per share over the life of
the CWCB loan repayment period. Under the assumption that reservoir storage provides an
average of2480 af of diversions armually, the project cost to the shareholders ranges from about
$15.50 to $17,00 per af of water diverted from reservoir storage.

At the present time, the total armual cost to the shareholders for water is aboli~ $12 per af of
water diverted, assuming average diversions of 6200 af per year and an armual Company
operating budget of about $75,000 (operation, maintenance, administration and existing debt
service), The projected armual cost to the shareholders with the inclusion of the project costs for
the dam safety modifIcations is less than $19 per af of water diverted.

The fInancial impact of the proposed dam safety modifIcation project is summarized as follows:

Current "With-Project" "With-Project"
Costs Costs Increases
Per Share (7250 shares) $8,00 $13.30-$13,83 $5.30-$5,83
Per af of Stored Diversions (2480 at) $15.49-$17,04
Per af of Total Diversions (6200 at) $12,00 $18,24-$18,86 $6,24-$6,86

96006\REPORTS\FEAS\TEXT.NEW

~ GEl Consultants, Inc,