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<br />~ <br /> <br />Penrose Water District <br />January 23-24, 2007 <br /> <br />Consent Agenda Item 2.3 <br /> <br />deliberations in December 2006, it became apparent that establishing a loan reserve fund up . <br />front, with one future annual payment of $461,334, would not be advantageous budget-wise for <br />the District, in view of upcoming project expenses. <br /> <br />The requested change is consistent with adopted CWCB loan program guidelines and standard <br />contract language. Staff does not have any objections to the request. The borrower would be <br />required to begin establishing the reserve fund following project completion. Based on the <br />proposed construction schedule, it is anticipated that the project would be completed in 2010 <br />and the first year of permanent loan repayment would begin 2011. <br /> <br />Recommendation <br /> <br />Staff recommends that the Board eliminate Condition #3, and require the borrower to follow the <br />standard CWCB loan procedure of accumulating the equivalent of one annual loan payment in a <br />loan reserve fund, by placing 10% of the annual loan payment in reserve for each of the first 10 <br />ears of the loan. <br /> <br />cc: Lissa Pinello, Board President, Penrose Water District <br />Ron Gasser, District Manager, Penrose Water District <br />Amy Stengel, AGO <br /> <br />Attachment <br /> <br />. <br /> <br />~. <br /> <br />20f2 <br />