PROJ00495

• Contract/PO #: C153678
• Contractor Name: Lower Arkansas Water Management Association
• Contract Type: Loan
• Water District: 67
• County: Prowers
• Bill Number: SB 96-124
• Loan Projects - Doc Type: Feasibility Study

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By then, procedures for quantifying and replacing well depletions will be more clearly defined.
Because the water involved in this augmentation program is of the same general character as
that the surface right owners in Water District 67 have received historically, water quality
should not be an issue. It is believed that no regulatory permits will be required to implement
the augmentation program.

FINANCIAL ANAL VSIS

For purposes of analyzing the financial feasibility of this augmentation program, it was
assumed that LAWMA would obtain, over the next few years, a total loan of approximately
~ million from the Colorado Water Conservation Board Construction Fund for the
purchase of water rights. This amount would be sufficient to purchase both the X-V Ranch
and Manvel Canal water rights. Proceeds from the sale of the land in the X-V Ranch would
then be used to purchase additional water rights and should be sufficient to obtain 1,000 to
1,500 acre-feet of additional consumptive use credits.

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The repayment requirements on this loan were figured two ways: one had repayment
occurring over a 40-year period with a 2 percent interest rate and the other had repayment
occurring over a 30-year period with a 4 percent interest rate. The annual payments in these
two situations would be approximately $139,000 and $219,000 respectively. In addition,
it will be necessary to pay the Southeastern Colorado Water Conservancy District for the
Fryingpan-Arkansas Project return flow. At present, the District charges $8.00 per acre-foot
for this water so the cost of this water was figured at $8,000 annually. All of LAWMA's
obligations will be paid by revenue generated from its membership dues. When these annual
payments are spread over main stem irrigation pumping averaging 78,555 acre-feet annually,
they would raise the per-a ere-foot assessment from $0.65 to $2.52 and $3.54 respectively.
Some adjustment may be necessary to the dues for the Fort Lyon members in recognition of
their ability to use the return flow from the Fryingpan-Arkansas Project.

Obviously, if LAWMA's membership continues to grow, then the required amounts of
replacement water will increase. LAWMA should consider this in setting the dues for new
members. The present members of LAWMA have a significant equity in this replacement
program already -- in the water rights it has acquired and in the organization it has developed.

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