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<br />t <br /> <br />193 <br /> <br />. <br /> <br />. <br /> <br />. <br /> <br />. <br /> <br />Tunne' Water Co. <br />January 24.26, 2001. <br /> <br />Agenda Item 1 Db. <br /> <br />Alternative 4, bore a new tunnel, was ruled out due to cost. <br /> <br />Alternative 5, rehabilitate the eastern % and parts of the western % of the tunnel, is now the <br />preferred alternative of the TWC. This saves mobilization costs, and shortens the time to <br />complete the overall project. The Company is using the existing $1.6 million emergency loan <br />now, as work progresses on Phase 1 of the project. Funds from this additional loan (if <br />approved) will become available around July 1, 2001. These funds will be used to complete the <br />project by early summer 2001. (Funds from the $1.6 million Emergency loan will be expended <br />by about May 1, 2001. The Company understands that it will need to arrange for short-lerm <br />bank financing to cover the period May 1 through July 1. The Company also understands that if <br />this additional CWCS Joan is not approved, it will need to obtain alternative long-term financing <br />to complete Phase 2 of the project.) <br /> <br />Selected Alternative 5 involves construction of access roads and construction staging areas at <br />both ends of the tunnel. For downstream access, a new road must be built up a steep <br />mountainside, across USFS property. The cost of access will be a major part of the total project <br />cost. The eastern 5,500 feet of the tunnel will be cleaned and stabilized, a temporary rail <br />installed to facilitate construction and portions of the tunnel will be re-mined to establish <br />sufficient width for construction equipment. <br /> <br />steel pipe liner will be installed along with shotcrete and rock bolts in various repair areas. <br />Existing concrete lined sections will be repaired and stabilized. Onoe this Is complete, <br />approximately 800 cubic yards of rock will be removed from a 400-foot section where the <br />collapse occurred, and that portion of tunnel will be rehabilitated. <br /> <br />A temporary rail system will also be installed from the west portal, and repairs and bracing work <br />will be completed on existing timbered supported sections. Portions of the west tunnel will be <br />re-mined and rehabilitated with steel supports. A trash rack and steel door will be constructed at <br />the east entrance, and the downstream deflection wall will be repaired. <br /> <br />The implementation schedule calls for completion of financing arrangements in winter <br />2000/2001, with formal approval and resolution by the TWC shareholders. Engineering design <br />was finalized by RMC in December 2000. Construction began December 2000 and is <br />scheduled for completion in summer 2001. <br /> <br />Financial Analvsls <br />The total estimated cost of the project is $4.1 million. Staff is recommending that the CWCS <br />Board approve an additional loan (Construction Fund Loan) of $2.08 million, so that total CWCS <br />financing for this project becomes $3,68 million (90 percent of the estimated cost.) <br /> <br />Alternative financing sources: The Company actively sought alternative financing. They were <br />not able to obtain a grant from the NRCS to cover project planning or construction costs. The <br />TWC also requested a loan from their bank, the First National Sank of Ft. Collins, but was <br />turned down because the bank does not provide long-term fixed rate financing for agricultural <br />projects. The bank will be able to provide short-term bridge financing for the period May 1 <br />through July 1 , 2001. <br /> <br />Loan rates for the TWC are calculated as a blended rate between the Agricultural, Municipal <br />Average Income and Municipal High-Income rates. (The rate for the $1.6 million Emergency <br /> <br />3 <br />