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<br />The major shareholder in the company had originally intended to complete the final
<br />portions of the project with private fmancing, The extensive flooding experienced on the
<br />Arkansas River in 1999 however has resulted in unforeseen financial hardships due to loss
<br />of crop revenues, The total project cost remaining to be completed is approximately
<br />$30,000 and includes installation of culverts, headgates, and the fmal excavation and
<br />shaping of a minor ditch lateral, The EI C has requested an increase to their loan in the
<br />amount of $21 , 125 for a total loan amount of $251 ,125,
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<br />Discussion
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<br />The Arkansas River flooding of April 1999 was devastating to several areas of the
<br />Arkansas River valley, The owners of the EIC lost almost 3 miles of fence and over 400
<br />acres of crop and pastureland totally inundated by floodwaters, A tremendous amount of
<br />debris was left in the fields resulting in a 100% loss of the annual crop yield,
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<br />The original project approved by the Board and authorized by the Legislature has
<br />not changed, only the total amount to be financed, The original authorization of
<br />$230,000 equals approximately 69% of the total project cost, Increasing the loan amount
<br />to the requested $251,125 would increase the project amount to be financed to 75%,
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<br />If the request were to be approved by the Board, all loan contract financial
<br />provisions would remain the same, including collateral, the 75% total project cost
<br />limitation, and original terms of the loan, The "agricultural" interest rate for 2000 is the
<br />same as the 3,75% interest rate of the original authorization, The value of the existing
<br />collateral (interest in the 1,876 water shares owned by the primary shareholder, project
<br />facilities including the Arkansas River diversion structure, and the stream of income
<br />derived by the sale of Arkansas Ground Water Users Association augmentation credits) is
<br />adequate to cover the additional loan amount. Staff has revised the project feasibility
<br />study and has found the project remains technically and financially feasible, Due to the
<br />construction delay caused by the flooding, the project time limits for completion must be
<br />extended by one year,
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<br />Recommendation
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<br />Staff recommends that the Board recommend to the General Assembly a loan
<br />increase to the Excelsior Irrigating Company's original 1997 loan in the amount of
<br />$21,125 for a total loan amount of $251,125 under the following conditions:
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<br />I, Terms of the additional loan amount would be at the FY2000 rate for agricultural
<br />interest rate 0[3,75% for 30 years,
<br />2, The loan is for up to 75% of the total project cost, or $251,125, whichever is less,
<br />3, The time limit for completion of the project will be extended by one year or until
<br />March 1, 2001.
<br />4, The collateral as defined in the original CWCB loan contract will remain the same,
<br />5, The loan increase shall be contingent upon all standard-contracting provisions of the
<br />CWCB,
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<br />Jan2000,lldmemo
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