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' <br />, <br />' <br />' <br />an interim loan up to ;�50,000, and has subsequently increased this to cover final design and <br />permitting costs. See Appendix E for a letter detailing the Reservoir Company's commitment to <br />alternative financing. This letter is from 2004. At the request of CWCB, a specially called <br />Stockholders' meeting will be held December 9, 2006 in Mesa, Colorado. The purpose of this <br />meeting is to allow stockholders to formally vote on the current proposal. <br />' COLLATERAL <br />' As security for the CWCB loan, the Reservoir Company has pledged the value of Bull Creek <br />Reservoir No. 4(see Appendix E, Commitment of Collateral). For purposes of this loan <br />' application the Reservoir Company has estimated the value of stored water as_ $3,000/AF; at <br />418 AF this is a total of $1,250,000. The Reservoir Company has further committed to adjusting <br />' assessments to cover the cost of servicing this loan and to cover associated operating <br />expenses. <br />ECONOMIC ANALYSI� <br />The economic analysi� is best viewed from opportunity cost vs. return on investment. The <br />opportunity cost is the loss of 312.69 AF of senior water rights. The current value of these rights <br />is conservatively valued within a range of $780,000 to $1,094,000 ($2,500 to $3,500 per AF). <br />Based on similar construction of new facilities, e.g. taking a"replacement cost" view of <br />valuation, this would pl�ce the cost per acre-foot more in the $10,000 to $12,000 per AF range. <br />This would produce a"high" range of $3.1 to $3.8 million. Viewed from this perspective, the <br />cosUbenefit ratio varies from approximately 1.0 to 4.0 to 4.7. <br />Regardless of the methodology used, the value of the water rights will continue to increase, <br />particularly as domestic demand continues to drive the value of rights. <br />SOCIAL AND PHYSIC�►L IMPACTS <br />The project will have no significant negative social impacts, since it will assure the continued <br />operation of a currently existing irrigation system. The project is scheduled to be completed in <br />Bull Creek Reservoir, Canal and Power Company <br />Bull Creek Reservoir No. 4, Feasibility Study <br />Nov. 30, 2006 Page 12 of 13 <br />