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<br />e e <br /> <br />a e . n 1Dt! te om panson <br />Lending Payments Payments <br />Rate Years 1-10 years 11-40 <br />2.00% $67,200 $ 87,650 <br />3.00% $67,200 $112,500 <br />3.75% $67,200 $134,700 <br /> <br />T bl 3 Le d. Ra C <br /> <br />It should also be noted that: (1) LAWMA's previous water rights loan was made at a 3.0 percent <br />rate of return, (2) the requested lending rate is 1.75 percent less than the Board's standard <br />agricultural rate for 1997, (3) the term of the requested loan is ten years longer than our standard <br />loan term, (4) the Board would be financing 100 percent of the acquisition costs, and (5) the <br />annual payments in the first ten years would be reduced at LA WMA' s request which procedure is <br />not typical of most of our loans. <br /> <br />Weare sensitive to the sequence of expensive and frustrating requirements facing water users in <br />the Arkansas Basin as a result of decisions in Kansas v. Colorado. The Board has made extensive <br />efforts to be of assistance to Arkansas Basin water users under these circumstances and will <br />continue to be of assistance to other water user associations as they prepare augmentation <br />programs and apply for funding of these programs. <br /> <br />We are also concerned, however, that adequate resources be available in the Construction Fund to <br />provide similar assistance to other Colorado water users in the future. Our experience in the last <br />few years has been that the list of funding needs continues to grow and the cost of potential <br />projects continues to increase. The staff feels very strongly that 3.0 percent is the minimum rate of <br />return needed to offset, to at least some extent, the long-term impacts of inflation on the principal <br />of.this loan over a period of 40 years. <br /> <br />. ; <br /> <br />ECONOMIC AND FINANCIAL FEASIDILITY <br /> <br />Helton & Williamsens' letter report includes a projection of revenues and expenditures for <br />LAWMA from the present through the end of the period ofCWCB debt retirement in 2038. <br />Attachment B is our adaptation of the spreadsheet in the report with projections which include a <br />new 2.0 percent loan and a new 3.0 percent loan. In both scenarios, deficits begin occurring in <br />2004 but small to moderate rate increases would likely eliminate these. <br /> <br />Assuming total well pumping by LAWMA members of85,000 acre-feet per year, these costs <br />would result in a cost per acre-foot pumped in the year 2009 of about $5.25 under the 2.0 percent <br />loan scenario and $5.54 per acre-foot under the 3.0 percent loan scenario. <br /> <br />4 <br />