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<br />. <br /> <br />. <br /> <br />. <br /> <br />presently being revised to reflect the financial arrangements that are expected to involve <br />the Company, Parks and the CWCB. Those arrangements will be finalized following the <br />January Board meeting. <br /> <br />Sources of Funding <br /> <br />It is expected that a total of $3.0 million in funding for the project will be provided from <br />the following sources: <br /> <br />A loan for $1.0 million at 4,0 percent for 30 years from the CWCB to the <br />Company, <br /> <br />$300,000 in cash from Parks to the Company ($220,000 has been paid and <br />$80,000 is expected to be paid during construction), and <br /> <br />A loan of $1.70 million from the CWCB to Parks, the proceeds of which Parks <br />will use to pay up to $1.70 million in construction costs in addition to the <br />$300,000 described above. <br /> <br />Loan Request <br /> <br />. <br /> <br />Parks is applying for a Construction Fund loan of $1.70 million for 30 years at zero <br />interest to provide financial assistance for the rehabilitation project. The loan, along with <br />$300,000 in cash (as described above) will bring Parks' total contribution to the project to <br />$2,0 million, <br /> <br />Parks has deposited $900,000 in an interest-bearing account at the Office of the State <br />Treasurer. The account is dedicated to repay the loan and is intended to function as an <br />annuity in that annual loan payments will be made from the account. The account will <br />also serve as collateral for the loan, In the event that the balance in the account in any <br />year is insufficient to make the loan payment, Parks will commit to use all other available <br />sources of revenue to cover the payment. <br /> <br />Preliminary opinions from the Attorney General's Office and the Office of the State <br />Controller indicate that that there are no fundamental constitutional or statutory barriers <br />to the proposed loan, <br /> <br />Financial and Economic Feasibilitv <br /> <br />. <br /> <br />As noted above, a condition of the Company's loan approval was a review of the <br />Company's financial condition and ability to repay the loan. Staff has reviewed the <br />Company's three most recent financial statements and the financial information provided <br />in the Wheeler feasibility study. Thc results of that analysis are presented in the table <br />below. The analysis indicates that the financial ratios, with the exception of Cash <br />Reserves to CUlTent Expense, are acceptable per the Board's adopted financial criteria. <br />The cost per acre-foot of water to the Company's shareholders will increase from $3.44 <br /> <br />3 <br />