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checking account at the Mancos Valley Bank presently has a balance of $2,700 as a reserve for <br />maintenance expenses. <br />Credit worthiness: The Company has no existing debt. The Company's ability to repay the <br />loan is supported by the Funding Agreement and the payment reserve account. <br />Loan Application: The Loan application to CWCB for the Project financing is contained in <br />Appendix E. <br />Alfernative financing considerations: The Company has obtained approximately $753,354 in <br />cost share (grant) from the NRCS to cover 75% of the construction costs plus an in-kind grant <br />from the NRCS for engineering design and construction inspection. Long-term financing for the <br />Company's portion of the construction costs ($188,339) could not be attained elsewhere, and <br />the cost could not be financed internally with a one-time assessment. <br />Collateral: As security for the CWCB loan, the Company can pledge the Funding Agreement, <br />the project structures, and a payment reserve account of two annual payments. <br />Economic Analysis <br />The economic benefit of the project is considerable. The additional water to be delivered to the <br />Members after completion of the Project is estimated by the NRCS to be 50% greater than with <br />the open Ditch. Regulation and measurement of water deliveries will be significantly improved. <br />The Members will be in a better position to make improvements to on-farm water systems that <br />can result in improved efficiencies and farm yields. The NRCS Plan identifies other <br />environmental, social and economic benefits that will result from the Project. <br />Physical Impacts <br />The Project will assure improved operation of a currently existing irrigation system. The Project <br />will change the appearance of the irrigation delivery system as portions of the Ditch will be <br />buried and the surface will return to natural grasses and other native species. Some sections of <br />the Ditch will be left intact to carry livestock water and manage runoffs from irrigated pastures <br />and rain/snow. The new diversion structure will be in the same location and somewhat larger <br />than the previous structure. <br />Conclusions <br />1. The Company is an incorporated entity in the State of Colorado with the ability to enter into <br />a contract with the CWCB for the purpose of obtaining a Construction Fund loan. <br />2. Rights-of Way easements are adequate for the construction of this project. <br />3. The project would provide improved delivery of irrigation water to share holders. <br />4. The total estimated cost of the project is $904,000 and this will be financed, in part, by a <br />grant from the NRCS of 75°/a of the project cost. The Company is applying for a bridge loan <br />for the full cost of the project and a$458,074 long-term loan from the CWCB Construction <br />Fund for the amount not covered by the federal grant. <br />5. Company is eligible for a Ioan from the CWCB. <br />� <br />