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I I I I I I I I I I I I I I I I I I I associated with the planned acquisition of the one-third portion of the water rights. If the District's offer is accepted, then the cost ofthe purchase of the one-sixth (3cfs) interest will be $400,000.00, plus the associated legal costs. It is the District's current intent that this possible purchase would be made with monies from the reserve. If this transaction is executed the reserve would be reduced to approximately $420,000.00. The District is in the process of negotiating an agreement with River Island Ranches, LLC, (RIR) in which RIR would transfer ownership of a water right associated with the ranch it acquired for residential development. A preliminary estimate indicates that the consumptive use associated with the water rights is approximately 300 acre-feet. The District would take the water right through a change of use court case for inclusion in the District's Augmentation Program. The District would make available to RIR the necessary augmentation water required to service its wells associated with residential development of the property. The District will have the right to purchase any remaining consumptive use or remaining water in excess of the water acquired by the District in its original transaction to provide RIR with the augmentation water it needs. The parties have agreed to a purchase price of $2,980.00 per acre-foot. The amount of water that will be available for purchase will not be known until a final decree is issued in the change of use case. It is likely, however, that it will require a significant amount of the District's remaining reserves. It should be noted, that the District has agreed in principal to assume the responsibilities of an augmentation plan for a developer, which will provide the District approximately $110,000.00 over a two to three year period. 4.3 Revenue and Expenditure Projections A spreadsheet showing Revenue and expenditures of the District for the past seven years and projected changes resulting from inclusion of the proposed water rights purchase is included at Table 4-1. Projected future revenue and expense categories have been increased at an assumed inflation rate of 3112% per year from a recently experienced recent conservative value with the exception of the "Net Water Sales", "Annual Fees", "Facility Maintenance", "Storage Costs" and "Legal/Engineering" categories. Net Water Sales The current charge for augmentation water sold by the District is $15,000 per acre-foot. A copy of the District's rate schedule is included in Appendix B. The charge is projected to increase to $17,500 per acre-foot for water sales after acceptance of the requested CWCB loan if approved. E01662 13 ~iJ SINCE :O;<W1& _.~. :'I!fi:'. j948 ....,cG;.).;\<'.....).J.'J." ~~:-::~ ;S;f-l.~.'J\J~ts::,~.1'.~ ~~ ~~ Q~-. ~:;:;l~ti;t~~ :I~t:.