C150290 Approval letter - Laserfiche WebLink

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Joseph W. Bowles Reservoir Company May 12, 2009 (UPDATED May 22, 2009) Page 5 of 6 Agenda Item 17c The Company has chosen Alternative No. 2 because it appears to be the best of the three proposed alternatives to improve the dam-safety deficiencies identified by the SEO and to repair the inlet ditch within a reasonable budget. TABLE 2 PROJECT COST Construction Dam Repair $ 1,443,000 Ditch Re air $ 118,000 En ineerin $ 313,000 TOTAL $ 1,874,000 The Project schedule is as follows: final design complete by January 2010, SEO approval by May 2010, construction beginning in August 2010, with the Project expected to be operational by March 2011. Financial Analysis The Company shareholders are a mix of 5% agricultural, 37% middle-income municipal, 16% high-income municipal, and 42% commercial interest. Blending these with the current interest rates, the Company qualifies for a 4.65% loan with a 30-year term. TABLE 3 FINANCIAL SUMMARY Total Pro'ect Cost $1,874,000 CWCB Loan Amount $1,687,000 CWCB Loan Amount (Includin 1% Service Fee) $1,703,870 CWCB Loan Payment $106,457 CWCB Loan Payment (Includin 10% Reserve) 117,102 Current Assessment er share $500 Cost of Loan (with Reserve Account) per share ~2~6 Credihvorthiness: The Company has no existing debt service. The CWCB loan will be repaid from increases in share assessments. For the past several years, the Company's assessments have been $500/share. While the cost of the CWCB loan per share is $276/share, assessments will only have to be raised by approximately $240/share for the first year and $180/share for the remainder of the loan. This is because the Company has been assessing shareholders for other maintenance projects and assessments would have decreased if the Company had not chosen to pursue this Project. The Company believes this Project will reduce maintenance costs, therefore, ultimately providing cost savings for its shareholders.