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<br />grants, while the remaining 25% be funded through loans with an option of a higher grant <br />to loan ratio if possible. <br /> <br />Debt repayments are calculated based on a 40-year loan at a 4.375% interest rate. If the <br />proposed project is funded 100% through loans, the annual loan payment would be <br />approximately $99,360 or $8,280 per month. Assuming 75% of the proposed project <br />costs are funded through grants and 25% of the costs are funded through loans, the annual <br />loan payment is $19,750 or $1,645 per month. The applicant is contributing to the <br />proposed project by funding the required reports for the loan application process. <br /> <br />4. Reserves <br />Reserves will be required for both debt service and short-lived assets, including the <br />booster pumps. The replacement of terminal assets includes the booster station pumps <br />and metering pumps for sodium hypochlorite, if required. The estimated usefullife of the <br />pumps is lO-years. Table VII-5 below presents estimated costs for the short-lived asset <br />reserve. <br /> <br />Table VII-5: Estimate of Short-lived Asset Reserve Requirements <br /> <br />Item <br />Booster Pump <br />Metering Pumps <br /> <br />Estimated Cost <br />$4,000 <br />$1,100 <br /> <br />Quantity Total <br />2 $8,000 <br />2 $2,200 <br /> <br />Total Replacement Costs <br />Annual Reserve <br /> <br />$10,200 <br />$1,020 <br /> <br />The annual amount required for debt service reserve is $1,975, corresponding to 1/10 of <br />annual debt repayment for a loan amount of 25% of the proposed proj ect cost. <br /> <br />Goodman Point Water Association - Preliminaty Engineering RepOli <br /> <br />23 <br />