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<br />Town of Akron - Well and Pipeline ConstruoUon <br />September 11-12, 2002 <br /> <br />, <br /> <br />Agenda Item 120 <br /> <br />As security for the loan the Town of Akron will pledge water revenues backed by a rate covenant <br />and annual financial reporting. This is in compliance with CWCS Loan Policy #5 (Collateral). - <br />During the period 2003-2005, the period when the ewcs loan and the Y-W Electric loans overlap, - <br />CWCS would not have a parity position and would be in a second position to Y-W Electric in terms <br />of Water Fund revenue proceeds. <br /> <br />Staff is satisfied that loan conditions would meet the requirements of CRS Sec. 37-60-120, which <br />requires the State to take sufficient security interest in the project to assure repayment of loan <br />funds. The Town's Water Fund revenues have increased approximately $65,000 since receipt of <br />the Y-W Electric Loan in 1996. Also, the Town of Akron is a municipal borrower with strong ability <br />to pay both loans, and the period during which the ewcs loan would be subordinate to Y-W <br />Electric is fairly short, a maximum of three years. <br /> <br />Recommendation <br /> <br />Staff recommends a CWCS Small Project Loan, not to exceed $349,799, to the Town of Akron from <br />the Construction Fund to construct two new wells and! raw water transmission lines connecting to their <br />existing water supply system. The recommended terjn of the loan is 30 years and the recommended <br />lending rate is 3.75%. Security for the loan will be a :pledge of water rate revenues backed by a rate <br />covenant and annual financial reporting. <br /> <br /> <br />Staff further recommends that final approval of the loan be conditioned upon all other standard <br />contracting provisions of the CWCS. <br /> <br />e <br /> <br />cc: Anne Bowin, Town Manager, Town of Akron <br />Linda Bassi, AGO <br /> <br />Attachment <br /> <br />e <br /> <br />Page 6 oH <br />