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SECTIONFIVE Selection of Alternative and Financial Plan <br />operating expense is $10,000 for the first year. The annual escalation of the operating expense is <br />estimated at 1% of estimated first year cost of $10,000. The new assessment also includes a <br />credit back from the interested on the loan reserve fund at a rate of 6% annually. The total <br />annual assessment including the new loan will be approximately $45 per share. Table 5-3 <br />presents the schedule of revenue and expenditures assuming a 30 year loan at a blended interest <br />rate of 3.48%. <br />5.5.1 Collateral <br />The Company can offer Panama Reservoir and its appurtenant structures as collateral for the <br />loan. <br />5.6 INSTITUTIONAL CONSIDERATIONS <br />5.6.1 Social, Economic, and Physical Impacts <br />The project will have no social impacts since its use as an irrigation facility will remain the same. <br />The project will have a positive economic impact by assisting the Company to more efficiently <br />provide irrigation water to over 5,685 acres of irrigated farm land. The project will have no <br />significant physical impacts except in the immediate vicinity of the construction. These impacts <br />will be minor in nature and will affect an area of less than 35 acres. <br />5.6.2 Permitting <br />The Company has contacted the United States Army Corps of Engineers (USAGE) related to <br />environmental permitting. Since the reservoir is off stream, any wetlands impacted by the <br />construction of the project will not be considered Waters of the US, and therefore will not <br />require a 404 permit. <br />~S 5-3 <br />