PROJ01746

• Contract/PO #: FS0046FX
• Contractor Name: New Castle, Town of
• Contract Type: Miscellaneous
• Water District: 0
• Loan Projects - Doc Type: Approval Letter

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Agenda Item 109.
January 24, 1996

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Residents currently pay $16/month for water, and $14/month for sewer. Even if all new debt
service had to be repaid from a water rate increase, the new rate would be $21.70. (The
average water rate for the State is $33.15).

For 1995, the Town projects $87,000 in water service fees and $252,000 in tap fees will be
collected.

The Town of New Castle had a Median Household Income between 80% and 110% of the
Statewide MHI for 1990. A loan to the Town should thus be at the "Standard Income" rate of
5.25%, set by the CWCB November 1995.

STAFF RECOMMENDATION

The staff recommends:

1. That a construction fund loan in an amount of $266,250 not to exceed 75% of
actual total project costs, be approved for The Town of New Castle (and/or The
Water Enterprise for The Town of New Castle) to rehabilitate the Town's Raw
Water Pipeline, and

2. That the financing terms shall be at an annual percentage rate of 5.25%
(equal to the "Standard Income" rate for a municipality as set by the CWCB
November 6, 1995), for a duration of 30 years, and

3. That loan approval shall be contingent upon completion of the feasibility study,
and upon all standard contracting provisions of the CWCB, as determined by the
CWCB Director, and

4. That security for the loan shall be a collateral interest in the stream of income
derived by The Water Enterprise for The Town of New Castle from the sale of
water, and a CD in amount equal to one annual payment to be held by the State
Treasurer, and

5. That the loan may be used to refinance project costs incurred prior to
contracting with the State, if approved by the Director of the CWCB.

Action Taken by the CWCB. January 24.1996

The CWCB approved the Staff Recommendation.

Attachments
C:lwp51 IPROJ-NEWI IOg.jan