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Silver Springs Trout Farm I Sherwood Trust Agenda Item 22a, November 19-20, 2001 (Updated November 26, 2001) Selected Alternative 3 consists of replacing all earth fish rearing ponds with concrete raceways that can be cleaned. The raceways segments are 12 feet wide and 80 feet long, with a total length of 560 feet. The raceways are constructed of 8-inch thick walls and 12-inch thick floors of steel reinforced concrete. The raceways are in series, but can be isolated from each other and independently supplied with water. The raceway surfaces are smooth concrete that is easy to clean and which provides poor habituate for the whirling disease aiternate host, T. tubifex, Surface drainage is directed away from the raceways. The raceway work was completed in August 1998. Source water protection consists of installation of 600 feet of 10-inch PVC transmission line and 400 feet of 10-inch perforated collection line. Four gate valves will be installed to provide full control, and the system will be tied into the existing pump house and water box. The estimated cost is $41,230. Predator control consists of constructing a 10' chain link fence and installing a wire mesh (2" by 2" openings) to keep the birds out. The estimated cost is $16,600. The implementation schedule for the source water protection and predator control calls for completion of financing arrangements and final engineering design in fall 2001. Construction will start in fall-winter 2001-2002 and be completed by fall 2002. The SSTF / ST will obtain construction financing elsewhere, and will refinance this debt, as well as other existing debt associated with the project, when the CWCS loan becomes available in summer 2002. Financial Analysis The total estimated cost of the project is $ 408,000, and the water is used by a commercial fish hatchery to produce trout that are sold on the open market. HS 91-1270 defines this type of commercial operation as "Aquaculture" and further states that "... aquaculture shall be considered an agricultural enterprise.." Staff is recommending that CWCS agricultural rates be applied to loans for rehabilitation of commercial fish hatcheries. Further, because of the great importance of proper management in maintaining the facility free of whirling disease, staff is also recommending that these loans not exceed 15 years in duration. In this case the facility has operated whirling disease free for several years and the owners have exhibited excellent management. For these reasons, Staff is recommending a 15-year loan at 3%, in maximum amount of $365,000 (90% of estimated total project cost.) Alternative financing sources: The SSTF I ST actively sought alternative financing and was able to obtain a private loan in amount of $350,000 at 8% to finance construction of the new raceways. That loan is amortized over 30 years and has an annual payment of $30,818. However, the loan also has a balloon payment in amount of $311,000 due in ten years (year 2009). This private loan does not provide a permanent financing solution, since the Hatchery Company will need to seek new financing in 2009. Table 2 is a summary of the financial aspects of the project. A CWCS loan of $365,000 would have an annual payment of $33,632 (including the 10% reserve requirement) at the loan terms of 3% for 15 years. Project Cost $408,000 Number of Shareholders 1 Number of Shares of Stock 50,000 CWCS Loan Amount $365,000 CWCS Loan Payment (includes 10% reserve) $33,632 Table 2. Financial Summary 3