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<br />. <br />. ,. <br /><<~ <br />.;f -. J-i, <br /> <br />Agenda Item 8a. <br />January 28, 1998 <br />Page 2 <br /> <br />(Updated February 6, 1998) <br /> <br />DISCUSSION <br /> <br />The primary purpose of the project loan is to construct an emergency spillway on the Riverside <br />Reservoir. The secondary purpose of the loan is to purchase 3076 acres of land that lies primarily <br />within the reservoir basin. These lands currently belong to the BLM, and will be made available <br />for purchase by the Company in 1998. If purchased, the Company will place the lands into a <br />conservation easement with the Centennial Land Trust, with no permanent development allowed. <br /> <br />The BLM is offering the RRLC fIrst right of refusal on the land, 2787 acres of which lie below <br />the high water line of the reservoir, with the remainder (288 acres) lying adjacent to the <br />reservoir. The land is being appraised, and preliminary indications are that the sale price will be <br />about $300,000. The value per acre of the inundated lands is estimated to be about 5 % of the <br />value per acre of lands surrounding the reservoir. The surrounding lands consist mostly of <br />comers of square parcels. It makes sense for the Company to own these lands since they are an <br />integral part of their operation. See attached map. <br /> <br />This project will assure that 63,400 acre feet of water can continue to be stored by the RRLC. <br /> <br />An assessment increase from $45 to $60 per right will be voted on at the RRLC' s annual meeting <br />on February 6,1998. This increase will be used to repay the CWCB loan, and to fund the <br />Company's 15% cost share. <br /> <br />The Riverside Irrigation District is the majority stockholder (77%) in RRLC. On October 5, <br />1997, the District increased its tax levy from $10.50 to 13.50 per acre on the 22,500 acres within <br />its boundaries. This will raise $67,500 per year, a portion of which will go to pay the assessment <br />increase to the RRLC. Since the District is a majority stockholder in the RRLC, passage of the <br />$15 per right assessment increase is assured. N"OIO !i;b/I-//M <br /> <br />The RRLC provides water for irrigation. A loan to the Company should thus be at the <br />"Agricultural" rate, as set by the CWCB on November 24, 1997. RRLC has requested a 20 year <br />loan at 3 % % . .. <br /> <br />COLLATERAL <br /> <br />The RRLC receives assessments from its stockholders. The CWCB will take a security interest in <br />this stream of revenues. <br /> <br />The RRLC can also provide a certifIcate of deposit in amount of one annual payment, and a <br />security interest in the land purchased. <br />