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<br />;.. <br /> <br />Using 826 acre-feet of consumptive use and an average value of $715 per acre-foot, the <br />appraisal thus concludes that the fair market value of the 1,007 Excelsior shares is <br />$590,590. This assumes that the most likely use of the water for some time in the future <br />will be for agricultural purposes. <br /> <br />I see no substantive reason to question the assumptions or the analyses in the appraisal <br />report. The worst case scenario, from our perspective, is that RMC's estimate of <br />consumptive use is correct at 752 acre-feet and that the market value of the water right is <br />$715 per acre-foot of consumptive use or less. If we assume 752 acre-feet and $715 per <br />acre-foot, the valuation of the 1,007 shares would be $537,680 as compared with <br />Blatchleys' estimate of $590,590. This could leave us with somewhat insufficient <br />collateral for the first few years of the loan term. <br /> <br />I recommend final approval for a loan of $590,590 to the Arkansas Groundwater Users <br />Association from the Arkansas River Augmentation Loan Account of the Construction <br />Fund. <br /> <br />Cc: Jan Illian <br />Linda Bassi, AGO <br />