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FINANCIAL IMPACTS <br />This project is a net revenue generator; therefore, the financial impacts to the shareholders and the <br />organization are favorable. <br />TABOR ISSUES <br />The Rio Grande Canal Water Users Association is a registered non-profit 501 (c)(12) Mutual Ditch <br />Company. The RGCWUA does not assess taxes, and therefore is not subject to TABOR. Although the <br />organization is subject to revenue restrictions in order to remain a non-profit entity. According to <br />I. R. C. 501 (c)(12) rules the organization must receive 85% or more of its income each year from its <br />members. The income must be collected solely to meet the organizations losses and expenses. The <br />revenues from this project will not exceed 15% of the total revenues, of which currently is made up <br />only of shareholder assessments. All of the revenues from this project will be used for operation <br />and maintenance of the ditch system. <br />RECOMMENDATIONS <br />The financial feasibility of this project depends on pending grants and the rate at which the <br />produced power is purchased. A power purchase agreement needs to be in place before committing <br />to this project. We recommend beginning negotiations with Xcel or other potential power <br />purchasers before continuing with a loan application to the CWCB. <br />Rio Grande Canal Water Users Association � Financial Feasibility Analysis <br />