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<br />Collateral <br /> <br />e <br /> <br />As security for the loan, the Company is willing to pledge revenues from service charges <br />and stock sales, as well as some combination of assets consisting of water rights and/or <br />reservoir sites, including Fortune Reservoir and the two existing raw water reservoirs, for <br />which the total estimated value would be equivalent to the principal amount of the loan. <br /> <br />Conclusion <br /> <br />Staff finds the proposed Fortune Reservoir Project to be economically, financially and <br />technically feasible subject to verification in the applicant's final feasibility study. <br /> <br />Recommendation <br /> <br />Staff recommends that the Board recommend to the General Assembly a Construction <br />Fund loan often million dollars to the Consolidated Mutual Water Company of <br />Lakewood for the construction ofthe Fortune Reservoir Project as described in this <br />memo. The recommended lending rate is 4.75 percent for a term often years. <br /> <br />Staff further recommends that the following conditions be met prior to the execution of a <br />loan contract with Consolidated Mutual: <br /> <br />I. The applicant will prepare a revised feasibility study in accordance with the _ <br />requirements of the CWCB Construction Fund Guidelines; the study must be . <br />reviewed and accepted by the CWCB staff. <br /> <br />2. The board of directors of the Consolidated Mutual Water Company will adopt <br />a resolution or resolutions approving the loan, the pledge of revenues and the <br />conveyance of a security interest in collateral that is equivalent in value to the <br />principal amount of the loan. <br /> <br />3. Any collateral pledged for the loan shall be free of liens and encumbrances. <br /> <br />4. The CWCB Construction Fund loan shall have parity status with any existing <br />debt of the Company with respect to a pledge of revenues. <br /> <br />Attachments <br /> <br />Cc: Walter Welton, Cons. Mutual <br />Linda Bassi, AGO <br /> <br />e <br /> <br />5 <br />