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SECTIONFIVE Selection of Alternative and Financial Plan <br /> 5-3 <br />Phase 1 $15.00 assessment for the siphon and canal project. The assessment per share, for the <br />new loan, will range from $31.00 for the first year of the loan down to $28.00 for the eleventh <br />year of the loan, and then remaining at this level for the term of the loan. The change in the <br />assessment is due to the loan reserve fund required by CWCB. The new assessment includes the <br />cost for the loan and the CWCB 1 percent loan service fee, but also and an estimated annual <br />operating expense for the reservoir facility. The annual operating expense is estimated at 1.0 <br />percent of estimated first year cost of $10,000.00. The new assessment also includes a credit <br />back from the interest on the loan reserve fund at a rate of 3 percent annually. The total annual <br />assessment including the new loan will range from $74.00 for the first year of the loan to $71.00 <br />for the eleventh year of the loan, and then remaining at this level for the term of the loan. Table <br />5.3 presents the schedule of revenue and expenditures assuming a 30-year loan at an interest rate <br />of 1.75 percent. <br />5.5.1 Collateral <br />SMRC can offer the dam and reservoir as collateral for the loan. <br />5.6 INSTITUTIONAL CONSIDERATIONS <br />5.6.1 Social, Economic, and Physical Impacts <br />The Project will have no social impacts because its use as an irrigation facility will <br />remain the same. The Project will have a positive economic impact by assisting SMRC to more <br />efficiently provide irrigation water to more than 70,000 acres of irrigated farm land. The Project <br />will have no significant physical impacts except in the immediate vicinity of the construction. <br />These impacts will be minor in nature and will affect an area of less than 5 acres.