C153705 Feasibility Study

• Contract/PO #: C153705
• Contractor Name: Beaver Reservoir Company
• Contract Type: Loan
• Water District: 59
• County: Gunnison
• Bill Number: SB 94-029
• Loan Projects - Doc Type: Feasibility Study

I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I

~, ~/

averaged about $5,500. A 2.5 percent annual increase was estimated for operating and
maintenance expenses. In addition, the existing FHA payment was estimated to be
$4,000 per year and was assumed to be in-place for the entire life of the CWCB loan.
lt was assumed for this financial evaluation that the BRC would not have any assets to
cover construction costs.

The CWCB requires that the DCRC develop a reserve account equivalent to one loan
payment. This reserve account should be developed over a period equal to 1/4 the life
of the loan. The reserve account on Table 8-2 is calculated by subtracting the operations
and maintenance expenses and loan payment from the revenue from assessments and
adding the subtotal to the previous year's reserve account. Additional financial programs
were also developed for a 40-year loan term for interest rates of 2, 3 and 5 percent.
These financial programs are presented in Tables 8"3 through 8-5.

The total project cost comes to $341,400 or about $213.38 per acre-foot. For the
selected alternative, the BRC would pay $492,.2~5 on a $341,400 CWCB 2 percent loan
over a 40-year period. Averaged over the~O-y~ear loan period, this amounts to about
$7.80 per acre-foot per year. The project cost of $213.38 per acre-foot is about
155 percent of the estimated 1992 annual value of Beaver Reservoir water at $138 per
acre-foot. A distributed average annual project cost of $3.41 per acre-foot amounts to
only about 5.6 percent of the 1992.value of the water.

The assessments per share per year in Tables 8-2 to 8-5 were calculated by distributing
the total revenue"from,assessments needed to cover payments and expenses among the
1,600 shares.

8.3 SUMMARY

Regardless of the' option chosen, the present condition of Beaver Reservoir necessitates
the rehabilitation of the reservoir. The assessments necessary to make payment on the
CWCBloan for the selected alternative are feasible for the Beaver Reservoir Company
shareholders. It appears that the costs associated with rehabilitating the dam would be
well invested compared to the value of water which could otherwise be lost.

23067/Rl.8 09-03-93(3:42pm)/RPT

8-2