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<br />. <br /> <br />. <br /> <br />t <br /> <br />/ <br /> <br />months supply of industrial and "haul" water. <br /> <br />Regarding CWCB fmancing, staff proposes that, in amending the loan contract, we reduce the term <br />of the loan from thirty to ten years. The ten-year term would accelerate repayment of the loan and <br />reduce the Board's exposure to the many variables in the situation, especially after RM1 has ceased <br />to operate the RIO plant. The lending rate would be reduced accordingly from 3.75 percent to 3.25 <br />percent per the Board's guidelines for loans of less than 30-year duration. For purposes of <br />comparison, the annual loan payments for 10,20 and 30 years are shown in Table I. <br /> <br />Table 1. Lending Rates and Loan Payments for a Loan of $258,300 <br /> <br />Loan Term in Years Lending Rate Annual Payment <br />10 3.25% $30,748 <br />20 3.50% $18,268 <br />30 3.75% $14,604 <br /> <br />An additional option is a variable repayment scht:dule with lower payments the first few years and <br />a rate of return based on the entire term of the loan. The disadvantage of that type of arrangement is <br />that payments art: usually substantially higher in later years. Staff has not prepared a variable <br />payment schedule at this time since we are still trying to determine the most acceptable financing <br />scenano. <br /> <br />Financial AnalysiR <br /> <br />Two financial projections were prepared to attempt to evaluate the "best case" and "worst <br />case" scenarios with respect to financial feasibility for the PMRCA project (copies attached). <br />Several assumptions were common to both scenarios: <br /> <br />Assumptions common to all fmancing scenarios: <br /> <br />. There are 13 existing year-round residences in the Pinon Mesa development. <br /> <br />. The total cost of the project is $344,433 with financing to be provided as follows: <br /> <br />CWCB loan: <br /> <br />$258,325 <br />$70,000 <br /> <br />RMI fmancing: <br /> <br />PMRCA funds: <br /> <br />$16 108 <br /> <br />Total <br /> <br />$344,433 <br /> <br />. The CWCB loan would be for a term of 10 years at a lending rate of 3.25 %. <br /> <br />. The PMRCA tap fee would be $4,000 per dwelling unit. <br /> <br />3 <br />