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Board briefed on North Creek irrigation piping project; staff recommends partial loan covering 30.7% of cost
Summary
North Creek Irrigation Company (Sanpete County) asked the board for financing help to pipe seven miles of open ditch and upgrade headworks to reduce about 45% conveyance losses; staff recommended a loan covering 30.7% of project cost, up to $1,732,000, at 1% interest for approx. 27 years.
North Creek Irrigation Company, which serves about 43 shareholders on roughly 800 acres north of Mount Pleasant in Sanpete County, has asked the Division of Water Resources for a loan to pressurize and pipe roughly seven miles of open ditch and to upgrade headworks and turnouts.
Staff told the board the system now loses about 45% in conveyance losses and the project is expected to save about 1,600 acre-feet annually; a Zions Public Finance economic analysis produced a 50‑year benefit‑cost ratio of 1.14. Staff recommended the board authorize financing covering 30.7% of project costs, up to $1,732,000, at 1% interest over approximately 27 years with annual payments of about $75,000.
Why it matters: the piping and headworks upgrades are intended to reduce losses and deliver water more reliably to tail-end users; staff estimated a net annual benefit to the irrigation district after project completion of about $245,000 and said about 100 acres could convert from pasture to higher‑value alfalfa production once delivery improves.
Board members and staff discussed the affordability of the proposed payment for shareholders. Tom Cox said the recommended $75,000 annual payment would require increasing the current $10 per‑share assessment “almost 5 or 6 times,” and that the district is applying for additional ag‑optimization grant money that could lower the loan payment to about $35,000 a year. Staff said if the district receives additional grants the cost‑share percentage and repayment years could be adjusted before committal of funds.
Staff emphasized the feasibility stage of the review and said precise cost sharing and repayment terms would be finalized at committal of funds. No formal vote or committal occurred in the briefing; board members indicated a member would bring the motion at the board meeting.
Speakers on record included Blaine Ipsen, Ani Baynard, Tom Cox and others; direct questions addressed conveyance losses, storage (staff said the project includes a small regulating pond, not a storage reservoir), and how yield increases would occur by delivering existing water more reliably to fields.
