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<br />. <br /> <br />. <br /> <br />, <br /> <br />e <br /> <br />Technical Feasibility <br /> <br />Based on the information provided by the consultant, there appear to be no significant problems with <br />regard to the technical feasibility of the project. The proposed drop inlet spillway along with the <br />existing emergency spillway will pass well in excess of the 100-year flood until such time as PMP <br />estimates for high-elevation reservoirs are available. <br /> <br />Economic Feasibility <br /> <br />The economic analysis was based on the expected cost of $834,400, a 50-year project life, and annual <br />benefits from the entire 920 acre-feet of storage capacity which would be unavailable without the <br />project. The analysis indicated annual benefits of $61,000 in comparison with annual costs of about <br />$45,000 or a benefit/cost ratio of about 1A. In a second analysis, when the total present cost of <br />$1,026,400 ($834,400 plus sunk costs of $192,000) is compared with the 50-year present value of the <br />benefits, the benefit/cost ratio for the project is about 1.1. <br /> <br />Institutional Considerations <br /> <br />e The Vouga Reservoir Association is a not-for-profit corporation organized in 1955 for the purpose of <br />constructing and operating the Vouga Dam and Reservoir. When the original rehabilitation project was <br />presented to the Board in 1993 and 1994, the VRA included several shareholders. As mentioned <br />above, Remy and Ruth Labrouche are now the sole shareholders, in joint tenancy, in the Association. <br /> <br />Financial Feasibility <br /> <br />The VRA is applying for a loan of $600,000 for 20 years at a lending rate of3.75 percent. Because the <br />Labrouches are the only shareholders at the present time, the financial analysis concentrated on their <br />financial capacity and creditworthiness as well as the collateral being offered for the loan. <br /> <br />A commercial credit report was obtained and a letter from the Labrouche's commercial bank was also <br />requested summarizing any liens on the proposed collateral as well as the bank's credit experience with <br />the Labrouches. Both the credit report and the bank letter are quite favorable. <br /> <br />The Labrouches have submitted unaudited financial statements for 1994 and 1995 which the staff <br />reviewed and discussed with their accountant and with the Labrouches. That review indicated a net <br />annual operating income of about $100,000 per year from all of their agricultural operations in Mesa <br />and Saguache Counties. <br /> <br />If the Board should approve a lending rate of 3.75 percent, the annual payments on a 20-year <br />e Construction Fund loan would be about $43,177 per year. Annual operating expenses are estimated at <br /> <br />3 <br />