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. . . FINANCIAL ANALYSIS LA WMA is requesting a $3,750,000 loan at 2.0 percent for 40 years. The 1996 Construction Fund lending rate for agricultural loans is 4.25 percent for 30 years as adopted at the November 1995 Board meeting. Table 3 gives the annual payment for loans of 30 years and 40 years with lending rates of 2.0, 3.0, and 4.25 percent for purposes of comparison. TABLE 3. ANNUAL LOAN PAYMENTS AT 2.0,3.0 AND 4.25 PERCENT ON A LOAN OF $3,750,000 Rate 30 Years 40 Years 2.00% $167,000 $137,000 3.00% $191,000 $162;000 4.25% $224,000 $197,000 . The staff has also examined the concept of a 40-year loan with initial payments of $150,000 per year for the first five years and approximately $211,000 per year for the remaining 35 years such that the effective rate of return would be approximately 4.25 percent over 40 years. Using the 1990-94 average of 78,000 acre-feet per year of mainstem well pumping by LAWMAinembers, the annual cost per acre-foot would be about $1.92 in the first five years and $2.71 in succeeding years. If the longer-term 1986-94 average of 60,000 acre-feet of m.ainstem pumping is used, the comparable acre-foot costs would be $2.50 and $3.52. Currently, LAWMA charges all regular irrigation, commercial, and municipal members $275 per well per year. In addition, irrigation well t1serspay $2.40 per acre-foot pumped. This dues structure is expected to generate approxinia.tely $302,000 of revenues in 1996. LA WMA's annual operating expenses are estimated at $130,000 per year and payments to the Southeastern Colorado Water Conservancy District for Fryingpan-Arkansas Project return flows are estimated at $8,000 per year leaving about $162,000 per year for debt service without an increase in dues. CONCLUSION Staff review of the augmentation program outlined in the Supplemental Feasibility Report fmds no reason why the program would not be adequate to meet the intended purpose of eliminating all but about 1,500 acre-feet of depletions. It is LA WMA's intent to purchase sufficient additional water rights, in addition to the acquisitions described above, to offset these remaining depletions. Also, it appears that LA WMA will be able to meet the requirements of the Arkansas legislation in the 1995 Construction Fund bill and in SB96-124. The financial analysis indicates that, with the current dues structure, LA WMA would have . . about $162,000 per year available for debt service after the first year or two of start-up costs. - 4 -