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<br />Alternative financing considerations: The South Side Ditch Company has investigated alternative <br />financing sources. However, long term financing could not be attained elsewhere. <br /> <br />Collateral: The five projects themselves will be offered as collateral. <br /> <br />Economic Analysis <br /> <br />If the Projects one and two are not completed the annual production of lands in the 8oo-acre service area <br />will continue to be reduced. The loss of water and considering the South Side Ditch is considered a water <br />short ditch makes the economic loss significant A major benefit of Projects one and two is avoiding the <br />annual economic loss associated with the lack of irrigation water within the service area. <br /> <br />Conclusions <br /> <br />1. The South Side Ditch Company is an incorporated entity. The Company must be registered in the <br />State of Colorado in order to enter into a contract with the CWCB for the purpose of obtaining a <br />Construction Fund loan. <br /> <br />2. Rights-of-Way easements will be obtained in time for the construction of these projects. <br /> <br />3. The projects would provide for the continued delivery of irrigation water to shareholders. <br /> <br />4. The total estimated cost of the project is $80,000 and will be financed by a $72,000 CWCB loan for <br />construction. <br /> <br />5. The South Side Ditch Company is eligible for a CWCB Small Project Loan because the loan amount is <br />less than $100,000, and because the project is necessary to avoid undue hardship on the borrower. <br />Requiring the South Side Ditch Company to apply through the standard CWCB loan process would <br />delay the project one-year, and jeopardize the Company's ability to deliver water to its shareholders. <br /> <br />Opinion of Feasibility <br /> <br />The project appears to be technically and financially feasible. <br /> <br />Page 15 <br /> <br />South Side Ditch Company <br />Feasibility Study <br />2003 <br />