PROJ01945 ‎(3)‎

• Contract/PO #: C150193
• Contractor Name: Dolores Water Conservancy District
• Contract Type: Loan
• Water District: 34
• County: Montezuma
• Loan Projects - Doc Type: Feasibility Study

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G. WHEREAS, another significant source of funding for WETPACK is the
$250/acre contribution of the WETPACK irrigators, a total of approximately $723,000
plus interest. Because the majority of WETP ACK irrigators are financing their
WETP ACK per acre payment through the District, funding from District reserve accounts
will be needed temporarily for certain, immediate District repayment obligations to the
CWCB under Loan Contract One;

H. WHEREAS, under a CWCB loan, Interest on Actual Funding During
Construction, generally referred to as "Interest During Construction" or "IDC", accrue$
on CWCB loan proceeds actually paid by the CWCB to an entity until the entity has
substantially completed construction of its pr~je<;:t and notifies the CWCB of the
completion of the project for which the loan was made;

1. WHEREAS, if the DistrictlEnterprise were to close out the Loan Contract One on
December 1, 2005, after receiving from the CWCB the approximately $2,530,000 of the
CWCB Loan Amount, used for MVIC Class B shares and Sandstone West, the
DistrictlEnteiprise, through a combination of the DistrictlEnterprise' s WETP ACK,
Future Projects and Discretionary Reserve Accounts ("Reserve Accounts") will need to
make the first two annual payments of $137,559 each under Loan Contract One until
Annuity payments start in December of 2008, and a, one-time payment of the IDC due
under Loan Contract One of approximately $215,000;

J. WHEREAS, the DistrictlEnterprise will repay the Reserve Accounts for the Loan
Contract One IDC and initial debt service with payments made by WETP ACK irrigators
for their $250/acre share of WETP ACK costs;

K. WHEREAS, Harris Water Engineering, was authorized by the DistrictlEnterprise
to complete a feasibility study ("December 2004 Feasibility Study") describing the
facilities necessary to irrigate, at an estimated construction cost of $3,692,000, 2,200
WETPACK Acres. The 2,200 Acres are in addition to those in Sandstone West (4c:I~0
acres) and those served directly from Project Canals (252 acres);

L. WHEREAS, the DistrictlEnterprise is considering requesting a new loan contract
("Loan Contract Two") with the CWCB for a loan of $3,323,180, ninety percent (90%)
of the estimated construction cost to develop the delivery facilities to the 2,200
WETP ACK Acres, at an interest rate of 2.5% for 30 years, with annual debt service iQf
approximately $158,774;

M. WHEREAS, the Annuity is sufficient to make the annual payments, as describl;}d
above, to the CWCB under the Loan Contract One, when closed out, and Loan Contact
Two;

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