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<br />~.~. <br />~- <br /> <br />MEMORANDUM <br /> <br />TO: <br /> <br />The City of Fort Morgan File <br /> <br />FROM: <br /> <br />Bill Green <br /> <br />DATE: <br /> <br />March 28, 1997 <br /> <br />RE: <br /> <br />Fort Morgan Financing Meeting <br /> <br />On March 25th, I met with the following individuals at the Water & Power Authority <br />offices: Dave Yamada, Ray Sieler, and Perry Eisenach of the City of Fort Morgan; Leroy <br />Cruz and Linda Sundine of Rural Development; Dan Law and Mike Brod with the Water <br />& Power Authority. The purpose of the meeting was to discuss the current funding <br />situation with regard to the Fort Morgan water supply project. <br /> <br />The City is seeking about $31 million in financing to complete the new water supply <br />system. The CWCB and the Authority have made loans for $5.5 million and for $2.5 <br />million respectively for the pipeline portion of the project which has been completed to the <br />vicinity of Fort Lupton (the Northern District's Southern Water Supply Project). <br /> <br />The Colorado Office of Rural Development might commit $8.0 million ($3.2 m as a grant <br />and $4.8 m as a loan) to the project this year if other funding agencies are willing to at <br />least give a preliminary indication that they might be willing to participate in the rest of the <br />$31 million needed. Rural Development may be able to obtain more funding for the <br />project next year. <br /> <br />The City will hold an election on June 17th regarding the completion of the project. No <br />specific indebtedness will be included on the ballot. It now looks as if the average' <br />residential water bill will go from $23 per month to about $51 per month with completion <br />of the project. It was pointed out that many residents are now paying as much as $15 per <br />month or more for water softeners and in-home treatment. <br /> <br />. The City has looked into the possibility of issuing revenue bonds for a major part of the <br />$31 million. Revenue bonds are likely to be very expensive and to result in unacceptably <br />high costs of financing (an opinion expressed by Dan Law and Mike Brod). Dan Law <br />suggested that Water & Power might be able to issue general obligation bonds through the <br />Drinking Water Revolving Fund. The City staffwas not enthusiastic about GO bonds but <br />indicated they might consider the possibility, <br /> <br />A potential financing scenario that was discussed (in concept only) would involve a $31 <br />million funding package to include $8 million or more from Rural Development, $15 <br />million in GO bonds through the Water & Power Authority and $ 8 million or less from <br />