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<br />Loan Application: The Loan application to CWCB for the Project financing is <br />contained in Appendix F. <br /> <br />Alternative financing considerations: The Company has investigated alternative <br />financing sources. NRCS will commit 75% of estimated construction costs and an in- <br />kind grant from the NRCS for engineering design and construction inspection. The <br />Company is also investigating financing from the Southwestern Colorado Water <br />Conservation District and from local banks for the Company's 25% of the estimated <br />construction costs. <br /> <br />Collateral: As security for the CWCB loan, the Company can pledge the Funding <br />Agreement, the project structures, and a payment reserve account of two annual <br />payments. <br /> <br />Economic Analysis <br />The economic benefit of the project is considerable. The additional water to be delivered <br />to the Members after completion of the Project is estimated by the NRCS to be 50% <br />greater than with the open ditches. Regulation and measurement of water deliveries <br />will be significantly improved. The Members will be in a better position to make <br />improvements to on-farm water systems that can result in improved efficiencies and <br />farm yields. The NRCS Project Plan identifies other environmental, social and <br />economic benefits that will result from the Project. <br /> <br />Physical Impacts <br />The Project will assure continued and improved operation of a currently existing <br />irrigation system. The Project will change the appearance of the irrigation delivery <br />system as portions of the ditches will be buried and the surface will return to natural <br />grasses and other native species. Some sections of the ditches may be left intact to <br />carry livestock water and manage runoffs from irrigated pastures and rain/snow. <br /> <br />Conclusions <br /> <br />1. The Company is an incorporated entity in the State of Colorado with the ability to <br />enter into a contract with the CWCB for the purpose of obtaining a Construction <br />Fund loan. <br /> <br />2. Rights-of Way and easements are adequate for the construction of this project. <br /> <br />3. The project would provide improved delivery of irrigation water to Members. <br /> <br />4. The total estimated cost of the project is $195,000 and this will be financed, in part, <br />by a grant from the NRCS. The Company is applying for a $48,750 long-term loan <br />from the CWCB Construction Fund for the amount not covered by the federal grant. <br /> <br />5. Company is eligible for a loan from the CWCB. <br /> <br />10 <br />