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As indicated in the Town'2 2006 budget, projected water sales will generate <br />approximately $195,000 per year and tap sales will generate an additional <br />$140,000. Tap sales for 2006 and beyond are expected to increase from <br />previous years due to development of a new multi-family project containing 60 <br />units and a new residential neighborhood with 23 lots. The Town is also in the <br />process of receiving annexation requests that will generate over 800 housing <br />units over the next five to ten years and generating $5.6 million. The $140,000 of <br />tap revenue represents the sale of 20 taps at $7,000 per tap. This revenue is <br />expected to continue and most likely increase over the next several years. In the <br />financial section of this report, a total of 30 taps per year was used for the next <br />two years and then a change back to the 4% growth for 2008 on. <br />The Town contracts with an operations company, which operates and maintains <br />the wells, water storage tank and the water distribution system. The Town <br />currently utilizes 5 wells, having a total capacity of 221 acre-feet per year. These <br />wells are connected directly to the distribution system. A 250,000 gallon water <br />storage tank is located southeast of the town and provides storage for fire <br />protection and maximum day demand. The storage capacity will need to be <br />increased by approximately 2013 due to the State design standards requiring <br />320,000 gallons per day when the population reaches 1500. One alternative that <br />will be investigated will be installing back into service an existing 200,000 gallon <br />storage tank and a new booster lift station to increase the system pressure to be <br />the same as the pressure of the existing 250,000 gallon tank. The 200,000 <br />gallon tank elevation is 30 feet below the 250,000 gallon tank. <br />The Town's water fund has one outstanding liability, a bond issued in 1989, <br />which requires an annual payment of approximately $22,000 per year. The <br />outstanding balance on this debt is approximately $90,000 as indicated in the <br />2004 Financial Report. It is not the Town's desire to borrow money to pay off this <br />bond. <br />D. LOAN REQUEST <br />The Town is requesting a 30-year loan from CWCB in the amount of $1.008 <br />million and is applying fora $0.5 million grant from the Colorado Mineral and <br />Energy Impact Assistance fund. The loan and grant represent approximately <br />65% of a $2.33 million project that will result in 139.6 acre feet of additional water <br />rights and the associated infrastructure to transport the water to the Town's <br />distribution system. CWCB Loan Policy No. 8 states that "the cost of water rights <br />acquisition are eligible for a CWCB loan if the purchase satisfies an existing <br />water need or shortage". <br />Keenesburg needs these improvements because of the poor water quality <br />(elevated fluoride and sodium), and inadequate disinfection as explained in <br />Section F of this report, Water Quality Issues. In essence, implementation of <br />Phase II of this project will enable the Town to acquire amuch-needed water <br />Feasibility Study -Keenesburg, CO <br />1/23/2009 3 <br />