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<br />COLLATERAL. <br /> <br />In accordance with the Board Policy No.5, adopted In September 1999, the CWCS staff <br />will evaluate and recommend to the Board collateral requirements taken in the following <br />priority until sufficient security is established for a project loan to a district: <br /> <br />(1) Pledge of revenues backed by a rate covenant and annual financial reporting, <br /> <br />(2) Facilities, water rights, and/or other real property, <br /> <br />(3) Any other assets. <br /> <br />The staff has reviewed and analyzed the District's and the Vallecito Water Company's <br />financial statements and related information,and considers adequate collateral for the <br />loan to be a pledge of water system revenu~s backed by a rate covenant and annual <br />financial reporting. <br /> <br />INTEREST RATE. <br /> <br />In accordance with the Board Policy No.7, adopted in January 1999, the District qualifies <br />for a Municipal Low Income Rate, which applies to a loan In a service area where the <br />median household income is less than 80 percent of the statewide median household <br />income. The 30-year Municipal Low Incom13 Rate for loans authorized in 2000, as <br />approved by the Board at the November 1999 meeting, is four percent. The 30-year rate <br />is reduced by one-quarter of one percent for Ibans with repayment terms of 20 years or <br />less, but more than 10 years, and by one-half of one percent for loans with repayment <br />terms of 10 years or less. <br /> <br />STAFF RECOMMENDATION <br /> <br />The staff recommends that for the $300,OO~ loan to Pine River Irrigation District. the <br />Board approve (1) collateral in accordance with CWCB Policy No, 5; and (2) an interest <br />rate in accordance with cwes Policy No.7. ' <br /> <br />13 <br /> <br />- <br /> <br />. <br /> <br />. <br />