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Table 1. Ryan Gulch Reservoir Co. Estimated Revenues and Expenditures for 1995 —1997 Operating Revenues Assessments Other Income Total Operating Revenues Operating Expense 1995 $5,089 8,200 $13,289 5 855 1996 $4,925 8,275 $13,200 3 389 1997 $4,989 8,200 $13,189 10.413 Net Operating Income $7,434 $9,811 $2,776 The Company is requesting a 30-year loan for $317,500 which represents 75 percent of the project cost less a$5,000 feasibility study grant which the Board provided to the Company in 1998. The Company will finance the remaining 25 percent of project costs, about $112,000, by the use of existing cash reserves and a one-time special assessment. Nine of the ten Company shareholders are agricultural and one is commercial. A weighted lending rate of 4.25% was calculated based on 25 shares at the commercial rate of 5.75°Io and 75 shares at the agricultural rate of 3.75%. • Company assessments are currently about $50 per share. As a result of the project, it is expected that the annual assessment will increase to approximateiy $185 per share over the period of debt retirement. The corresponding cost per acre-foot of yield, using 800 acre-feet per year, is about $23. The only alternative source of funding for this project would likely be a commercial bank loan involving a lending rate of about eight percent and a loan term of much less than 30 years. As security for the loan, the Company will offer a pledge of revenues from assessments and the Ryan Gulch Reservoir. Using an assumed value of storage at $1,000 per acre- foot, staff estimates the value of the collateral at about $900,000. Conclusion C� Staff finds the proposed project to be economically, financially and technically feasible. Recommendation Staff recommends that the Board recommend to the General Assembly a Construction Fund loan of $317,500 to the Ryan Gulch Reservoir Company of Loveland for the construction of a new spillway on the Ryan Gulch Dam. The recommended lending rate is 4.25 percent for a term of 30 years. Staff further recommends that the Board require,