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Loan Request <br />The Lower Poudre Augmentation Company is requesting a 30 year loan of 90% of the cost <br />($3,073,320) at 2.5 %. The users are all agricultural and justify being given the straight ag interest <br />rate. The remaining 10% of the cost will be bourn by the Augmentation Company. <br />Financing Sources <br />The applicant is seeking a 90% loan amount from CWCB. The remainder of the financing would <br />come from the shareholder assessments. The augmentation company already has the assets in 2 <br />place for this loan. The combined amounts will be used to fund the land and water purchase. A <br />positive ote om shareholders to fund the loan payback was obtained before any negotiations for <br />property or,te r were started. <br />I � 11 <br />Loan Repayment Sources / <br />The repayment will be made strictly from annual assessments of th 'e shared ersd . The value of <br />the water and the project on a per- acre -foot basis make the project repayment economical. Future <br />values of. 'the project will actually make this project an asset of growing value to the shareholders. <br />Appendix J illustrates the proposed re- payment schedule. <br />Collateral <br />The project sponsor proposes to use the land and water rights that are being purchased as the <br />collateral for the loan. The value of reservoir storage has steadily increased over the past 20 years. <br />Gravel pit storage has been in place for enough years to have proven itself as a viable method to <br />store and release water. The Northern Colorado area has significant growth and a vibrant economy <br />which makes this asset credit worthy. The water rights come from the Boxelder Ditch which has a <br />healthy demand for shares. The value of the shares as they are pledged for collateral are in line <br />with the value of other agricultural water rights on a per acre -foot of consumptive; use basis. <br />The location of the project also gives added value to the project. It is located adjacent to the Town <br />of Timnath which could see an increase in growth of over 10 times it's current sire. These; <br />indicators would indicate that making this loan is based on a secure collateral backing. <br />Sponsor Creditworthiness <br />The Lower Poudre Augmentation Company is a new company, yet it is derived from The New <br />Cache la Poudre Irrigating Company (New Cache), which has over 100 year history. The <br />formation of the new company was done to separate the costs and the benefits accrued by -the <br />project to those people that use and pay for it. New Cache has had several projects funded with <br />CWCB loan funds and it in good standing with the State. One of the reasons that New Cache has <br />had so much success with project and project funding is its principle to illicit support from its <br />members. This concept is also practiced by the Lower Poudre Augmentation Company. ]'he <br />members of this new company are also members of New Cache and thus have proven their <br />creditworthiness on other loans for other projects. <br />Conclusions <br />This application fits the criteria generally required by CWCB. It is secured by assets that should <br />give the State reasonable assurance that their loan is secured. The costs of the project on at per- <br />10 <br />