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. Agenda Item 22. March 10, 1998 Page 3 (Updated April 14, 1998) If the CWCB approved a 4O-year loan with a rate of 1.5 % for the first 10 years, and 3 % for the remaining 30 years, the cost per acre-foot per year would be $32.42 for the first 10 years and between $38 and $48 for the remaining 30 years. These loan tenns would improve the financial feasibility of the project to an acceptable level, while resulting in a return to the CWCB roughly equivalent to a 4O-year loan at 2.25 %. GASP has 1440 members and a total of 3050 wells. The annual cost of debt service, per well, would be in the range of $23 to $35. COLLATERAL GASP receives assessments from its members. The CWCB will take a security interest in this stream of income. GASP owns water rights conservatively valued at $1.3 million, and other assets valued at about $350K. These assets can be generally classified as having moderate liquidity, and could provide additional security for the loan. GASP will own the Sedgwick Reservoir project at a cost of $1.7 million. The project (and the junior water rights associated with it) would be classified as having low liquidity, but would . provide additional security for the loan. . STAFF RECOMMENDATION 1. That a Construction Fund Authorization in an amount of $1,700,000, not to exceed 100% of actual costs, be recommended for Groundwater Appropriators of the South Platte (GASp), to construct the Sedgwick Augmentation Reservoir and related structures, and 2. That the financing terms for this Construction Fund Authorization shall be a 40 year loan at an annual percentage rate of 1.5% for the first 10 years of the loan, and an annual percentage rate of 3% for the rt'm"ining 30 years of the loan, and 3. That loan approval shall be contingent upon an afrmnative vote of the GASP membership approving the loan and any increase in membership assessments that may be necessary for repayment of the loan, and upon all standard contracting provisions of the CWCB, as determined by the CWCB Director, and 4. That collateral for the loan shall be a security interest in the stream of income derived by GASP from member assessments, and other collateral to be determined, as approved by the CWCB Director.