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<br />. <br /> <br />e <br /> <br />e <br /> <br />e <br /> <br />Town of Paonia - Water Rights Purchase <br />November 25-26, 2002 <br /> <br />Agenda Item 201 <br /> <br />Cash Reserves to Current Expense <br />weak: less than 50% 102% 55% <br />average: 50% - 100% (strong) (average) <br />strong: areater than 100% <br />Debt per Tap <br />weak: greater than $5000 N/A $1233 <br />average: $2500 - $5000 (Strong) <br />strona: less than $2500 <br />Monthly Water Bill <br />average: $30 $10.50 $12.00 to $16.50 <br />weak: greater than $60 (strong) (Strong) <br /> <br />. Assumes $22,000 in non-operating revenue such as $17,000 in tap fees (2 out-of-town <br />taps @$8500) and $5000 in existing Water Fund water storage funding. <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 CWCB Loan Policy #5 (Collateral). <br /> <br />Recommendation <br /> <br />Staff recommends a CWCB loan, from the Severence Tax Trust Fund - Perpetual Base Account, <br />not to exceed $1,710,000 to the Town of Paonia, acting by and through its water activity enterprise, <br />for the purchase of water rights in the form of a buy-back of 317 unused out-of-town water taps <br />through the purchase of the Ark Land Property. The recommended term of the loan is 30 years and <br />the recommended lending rate is 3.75%. Security for the loan will be a pledge of water rate revenues <br />backed by a rate covenant and annual financial reporting. <br /> <br />Further, staff recommends the following approval conditions: <br /> <br />1. Upon sale of the Ark Land property by the Town, the proceeds of the sale shall be used to pay <br />down the CWCB loan. <br /> <br />2. Prior to execution of the loan contract with CWCB, the Town shall provide a copy of the final <br />purchase contract for the Ark Land Property, as well as a copy of the land and water rights <br />appraisal obtained by the Conservation Fund, indicating that the appraised value of iand and <br />water rights equals or exceeds the purchase price of $1.8 million. <br /> <br />3. Prior to execution of the contract with eWCB, the Town shall provide CWCB a final Feasibility <br />Study. <br /> <br />Staff further recommends that final approval of the loan be conditioned upon all other standard <br />contracting provisions of the CWCB. <br /> <br />cc: <br /> <br />John Norris, Town Manager, Town of Paonia <br />Linda Bassi, AGO <br /> <br />Attachment <br /> <br />Page 7 of 8 <br />