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<br />. <br /> <br />. <br /> <br />. <br /> <br />Total debt to be incurred by the City for the project is estimated at $35.8 million. Using <br />an estimate of 6,400 equivalent residential taps gives a debt per tap of $5,600 which is <br />significant but not necessarily prohibitive. <br /> <br />A review of the financial statements for the City's water fund for the years 1994 to 1996 <br />indicates that revenues are adequate and water fund equity is strong. Cash reserves are not <br />excessive. The City water fund operates as an enterprise fund. <br /> <br />Table 3 summarizes several financial and statistical characteristics of the City and the <br />project. <br /> <br />Table 3. City of Fort Morgan <br />Financial and Statistical Summary <br /> <br />. <br /> <br />Estimated Population 10,000 <br />Median Household Income (1990) $22,185 <br />Annual Water Demand (Acre-Feet) 3,500 <br />Equivalent Residential Taps 6,400 <br />Existing Water System Debt $8,000,000 <br />Future Water System Debt $35,800,000 <br />Future Debt per Equiv. Residential Tap $5,600 <br />Total Cost of Raw Water Facilities $23,000,000 <br />Total CWCB Financing (Existing and Requested) $13,500,000 <br />CWCB Financing as Percent of Raw Water Costs 58% <br />Project Yield (Acre-Feet per Year) 3,360 <br />Raw Water Cost per Acre-foot $6,845 <br /> <br />Based on a median household income of$22,185, the City would qualifY for the Board's <br />Municipal Low Income lending rate. As security for the loan, the City will pledge water <br />fund revenues at parity with any other lenders, the City's portion of capacity in the entire <br />pipeline from Carter Lake to Fort Morgan, and a security interest in the proceeds of any <br />lease of the pipeline capacity. <br /> <br />Discussion <br />Staff believes that the City's proposed water supply project is economically, financially, <br />and technically feasible. While the investment required here is substantial and debt <br />repayment will result in significantly higher water bills, the need for the project is clear. <br />The existing groundwater system is simply not suitable for potable water supply and <br />water users are already incurring substantial costs for treatment and from damage to <br />pipes, plumbing, and fixtures. <br /> <br />. <br /> <br />The only alternative to the project entails a very high degree of treatment of the <br />groundwater by reverse osmosis, a process which is very energy intensive and is likely to <br />produce large amounts of brine which have to be disposed of in some manner. The <br /> <br />4 <br />