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<br />. <br /> <br />. <br /> <br />. <br /> <br />Town of Paonla - Water Rights Purchase <br />January 22.23. 2003 <br /> <br />Agenda Item 19ft <br /> <br />. Assumes $24,000 in non-operating revenue such as $17,000 in tap fees (2 out-of-town <br />taps @ $8500) and $7000 in existing Water Fund water storage funding, or 3 out-of-town <br />taps at $8500. <br /> <br />Tap fee revenue history has been: <br /> <br />2001 - $111,500 <br />2000 - $69,000 <br />1999 - $37,339 <br /> <br />1998 - $ 48,250 <br />1997 - $57,500 <br /> <br />As security for the loan, the Town of Paonia 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 /> <br />Recommendation <br /> <br />Staff recommends a CWCS Small Project Loan from the Construction Fund for $1,000,000 to the <br />Town of Paonia, acting by and through its water activity enterprise, for the buy-back and retirement <br />of 317 unused out-of-town water taps associated with the purchase of the Ark Land Property. The <br />recommended term of the loan is 30 years and the recommended lending rate is 3.75% per annum. <br />Security for the loan will be a pledge of water rate revenues backed by a rate covenant and annual <br />financial reporting. <br /> <br />Further, staff recommends the following approval conditions: <br /> <br />1. CWCS loan approval shall be conditioned upon the Town obtaining bond approval or alternate <br />funding totaling $710,000 (unless The Conservation Fund contracts for sale of the land <br />component of the property to another suitable private buyer), in addition to the Town's <br />. commitment of $190,000 from their Water Fund reserves. <br /> <br />2. Prior to execution of the loan contract with CWCS, the Town shall provide a copy of the Ark <br />Land Property appraisal obtained by The Conservation Fund; indicating that the appraised <br />value of land and water taps equals or exceeds the purchase price of $1.8 million. <br /> <br />3. Prior to execution of the contract with CWCS, the Town shall provide CWCS a final Feasibility <br />Study. <br /> <br />4. As part of this loan approval, the previous Construction Fund Loan (HS 95-1155) to the Town <br />of Paonia, in the amount of $600,000 for new reservoir construction, is recommended for de- <br />authorization. <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 />cc: Robert Johnson, Mayor, Town of Paonia <br />Jim Briscoe. Attorney, Town of Paonia <br />Christine Quinlan, The Conservation Fund <br />Linda Bassi, AGO <br /> <br />Attachments <br />Project Summary and Location Map <br />Opinion from Attorney General on Water Tap Purchase <br />Loan Request Letter - Town of Paonia <br /> <br />Page 7 of 8 <br />