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<br /> <br />~, <br />~~:~>j <br />. "..,- <br /> <br />(,'~ <br />t(.J1! <br /> <br />'I'he capital costs associated with potential irrigated agri- <br />cultural developments on the Ute Mountain Ute and Southern Ute <br />Indian Reservations have two components. 'l'he first component is <br />an overall systems cost, which includes the. costs. of the water <br />storage and delivery facUities necessary to deliver water to <br />ir'rigable acreage. The second component is an dn-farm cost, <br />which includes the costs of irrigation ditches and/or pipes and <br />sprinklers for applying water to the land. <br /> <br />Contractor shall develop cost projections for both the <br />project syste~s and on-farm systems. In order to work out these <br />projections, contractor shall consult with the Department of <br />Law's experts in the fields of engineering and agricultural engi- <br />neering. The types of crops' proposed for various irrigated par- <br />cels to some extent determine the type of on-farm irrigation sys- <br />tems needed (e'.g., corn cannot be grown l,lnder side roll ,sprin- <br />.klers). Furthermore, the mix of crops grown, their evapotranspi- <br />ration rate and the efficiency of sprinkler systems employed dic- <br />tate the sizing of various water delivery, systems to irrigated <br />parcels. WEC shall consult with Boyle Engineering in the design <br />of all these system's components. 'l'he design process shall also <br />include a joint effort between WEC and the other experts in the <br />different disciplines described above. Contractor shall partici- <br />pate in the. selection and design of the on-farm irrigation sys- <br />tems with the state's other consultants. <br /> <br />Contractor .shall evaluate and repo~t to the' Department of <br />Law, various methods to determine the interest rate'at which the <br />capital costs are to be financed. One method .to be examined sur- <br />veys private lending ins-ti tut'ions in the region to _determine a <br />current "market" interest rate for agricultural loans. Another <br />uses an interest rate that is comparable to that offered by vari" <br />ous federal and state agencies for financing public water <br />projects. A third uses the same interest rate as the assumed <br />"discount rate" used in comparing benefits and costs in a <br />benefit-cost framework. 'l'his latter approach is based upon the <br />assumption that the discount rate is a surrogate for the opportu- <br />nity cost of funds in the economy. <br /> <br />'l'he method to be used to determine the interest rate shall <br />be selected in consultation with and shall be subject to the ap- <br />proval of the Department of Law. <br /> <br />Product . Documentation of selection of interest rates. 'l'abula- <br />tionsshoving the break-down of overall systems cost and on-farm <br />cost by ite~ for selected systems. <br /> <br />Projected Costs. <br /> <br />-6- <br /> <br />,~. <br /> <br />1"'< <br />.,',:~~ .---,- ' <br />0,' ,,~_y, , <br /> <br />". ' " ".",,^,~ '. ",','" ",'-'1.:' ""'~ :,:', '~" " <br /> <br />_C,..,' <br />