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,. '''1.- .. .....~\i...... Agenda Item 8a. January 24, 1996 2 (b) Collateral: The Company will receive a portion of the annual income that the Town of Pagosa Springs derives as a result of leasing its "waste water" to the pipeline. The amount received will be equal to the annual payment for the CWCB loan (approximately $4030 per year). The CWCB can take a collateral interest in these lease revenues. The Company will own the pipeline project, and can pledge it as collateral. The Company has the ability to levy assessments against its stockholders to repay the loan, and the CWCB could take a collateral interest in those assessments. See the attached letter from Janice Sheftel, the Town's Attorney. (c) Financial Condition: The Company has no current debt. The Company will have an annual payment of approximately $4030, as a result of the $60,000 CWCB loan. However, the Company will receive $4030 per year in income from the Town of Pagosa Springs as part of the Stipulations and Articles of Incorporation of the Company. The primary Company shareholders (The Town of Pagosa springs, The Pagosa Resort Company, and Giordano Inc.) represent significant fmancial strength. STAFF RECOMMENDATION The staff recommends: 1. That a construction fund loan in an amount of $60,000, be ratified for The Pagosa Springs Pipeline Company to construct a new geothermal raw water pipeline, and 2. That the fmancing terms shall be at an annual percentage rate of 5~25%, 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 CWCBDirector, and 4. That the Board finds that delay of this project will result in undue hardship on the Borrower, and that the loan may be made from the CWCB Small Project Loan Account, [and