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<br />Financial Plan <br /> <br />The total cost of the project is $1,153,000. $1,037,700 or 90% <br />may come from a loan with the Colorado Water Conservation Board, <br />and the remainder from the project sponsor, OWW. The CWCB Loan <br />Application is found in Appendix C. <br /> <br />The OWW is a new company and has no debt or history of income and <br />expenses. The Company has collected initial capital of $80,000 <br />from its shareholders. These funds, as well as future assessments <br />and CWCB loan proceeds will be used to construct the project and <br />pay O&M costs. (Note: Shareholders of the OWW previously were <br />members of GASP and paid a total of $100,000 for augmentation of <br />their wells. These GASP dues can now be used to pay assessments <br />of the OWW.) <br /> <br />The annual payment would be $54,536 (including the 10% reserve <br />requirement) at the loan terms of 2.5% for 30 years. This <br />represents $9.10 per acre-foot, based on expected annual well <br />diversions of 6,000 acre-feet by the Company shareholders. The <br />Company's cost share will come from a one-time special assessment <br />of the shareholders. <br /> <br />Collateral <br /> <br />1. As security for the loan OWW will pledge assessment revenues <br />backed by an assessment covenant. <br /> <br />Institutional Considerations <br /> <br />Orphan Wells of Wiggins needs authorization to borrow $1,037,700 <br />from the CWCB Construction Fund. The loan, if approved, from the <br />CWCB will be contingent upon the successful negotiation of a <br />contract between the CWCB and OWW. Agreements with contractors <br />will be finalized upon authorization of the CWCB loan. <br /> <br />Opinion of FeasLbility <br /> <br />The selected alternative is technically and financially feasible. <br />There are no known roadblocks, which would keep OWW from <br />successfully completing this project. <br /> <br />Feasibility Study <br />OWW Aug Project <br />October 2003 <br /> <br />7 <br />