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<br />January 22 closing NPIC received approximately $500,000 with the remainder of <br />the purchase price to be paid in 20 annual payments of approximately $190,000. <br /> <br />NPIC has additional annual income of approximately $280,000 from recreational <br />leases. <br /> <br />Complete financial information may be found in NPIC's Annual Reports. The <br />Annual Reports for 2001, 2002, and 2003 are found in Appendix D. <br /> <br />Alternative financing considerations: NPIC has investigated alternative <br />financing sources. <br /> <br />Collateral: As security for the CWCS loan NPIC can pledge assessment <br />income, and the project itself. <br /> <br />Economic Analysis: <br /> <br />The economic benefit of the project is considerable. Sy rehabilitating the <br />reservoir NPIC will regain 417 acre-feet of water. Using the current estimated <br />cost of building new storage of $2,500/AF the value of the project is $1,042,500 <br />compared to the estimated cost of $760,000. <br /> <br />Using an estimated total project cost of $760,000 the cost of the 674 acre-feet of <br />water annually is $78 per acre-foot. The recent drought has created large <br />fluctuations in the price of water. During the past year (2003) water sold for as <br />much as $400 per acre-foot. Although it is difficult to predict the future price of <br />water it is safe to assumethat its value is increasing. <br /> <br />Social and Physical Impacts: <br /> <br />The project will have no significant social impact as the reservoir will continue to <br />operate as it has in the past. Physical impacts include the changes to the dam <br />and the cut and fill areas at the upstream end of the reservoir. The cut and fill <br />areas are limited to the area below the flood elevations of the reservoir and will <br />have a positive impact by containing the reservoir to a more well defined area. <br /> <br />Conclusions <br /> <br />1. North Poudre Irrigation Company, Inc. is an incorporated entity in the <br />State of Colorado with the ability to enter into a contract with the <br />CWCS for the purpose of obtaining a Construction fund loan. <br />2. NPIC is in the process of obtaining Rights-of-Way easements and <br />flood easements for the rehabilitation of this dam. <br />3. The project would provide for additional storage of water for the <br />beneficial use of the shareholders and ensure that NPIC retains its full <br />decree of water dating to the 1880's. <br /> <br />-6- <br />