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C, <br />�J <br />DESCRIPTION OF THE LOAN: A $3,018,000 leveraged loan with a 20 year term and two payments annually and an <br />estimated interest rate of 4.0% will cost the Town approximately $220,650 in debt service each year. <br />RECOMMENDATION: The Town of Lyons serves a mostly residential area in northern Boulder County. Current <br />monthly water rates are higher than the estimated state average, and the proposed loan represents a significant rate <br />increase to the system's users. The Town has two developments that are expected to generate significant contributed <br />capital for the water system in future years. To support coverage for the proposed loan, the Town has increased tap fees <br />and is prepared to increase monthly rates if tap fee revenue does not meet expectations. We therefore recommend the <br />DWRF Committee favorably consider a $3,018,000 leveraged loan to the Town of Lyons. <br />5 <br />Prepared by: Barry Cress and Sarah Minton <br />Date: January 14, 2003 <br />