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Mancos Valley Beaver Ditch Company January 17, 2006 Page 2 of 2 Agenda Item 19a Table 2 shows a summary of the financial aspects of the Project. A CWCB Post-Construction Loan . of $226,188 would have an annual payment of $14,409 ($10,807 for the annual loan payment and $3,602 for the reserve account during the fir?t three years - see loan conditions below) for the loan terms of 2.50% for 30-years. Table 2. Financial Summary of Project Total Proiect Cost CWCS Post-construction Loan Amount Annual Loan Pavment Amount Annual Loan Obligation (including debt reserve funding) Annual Project Cost per acre-foot (based on 1,431 AF after 3 years) $904,750 $226,188 $10,807 $14,409 $7. 55/ac-ft Repayment of the CWCS loan will be accomplished by member assessments in accordance with the Company's Funding Agreement. Financial Ratios for the Company shall remain as shown on the originally approved loan memo (attached) with the exception of an annual operating cost of $8.00 per acre-feet. The Company proposes to assess the members based on the Company's executed Funding Agreement. Collateral: As security for this loan, the Company will pledge its assessment revenues backed by an assessment covenant which includes a security interest in the Company's Funding Agreement and the Project including pipeline, diversion structure No. 505 and all associated access easement rights. This security is in compliance with CWCS Loan Policy #5 (Collateral). Staff Recommendation e Staff recommends an initial loan, not to exceed $913,798 ($904,750 for project costs and $9,048 for the 1% Loan Service Fee) to the Mancos Valley Seaver Ditch Company from the Severance Tax Trust Fund Perpetual Sase Account, for the Mancos Valley Seaver Ditch Pipeline Project. The staff further recommends a post-construction loan not to exceed $235,236 ($226,188 for project costs and $9,048 for the 1% Loan Service Fee) to the Company with terms based on the current agricultural rate (30 years at 2.50% per annum). Security for the loan will be collateral in compliance with CWCS Loan Policy NO.5. Staff further recommends that final approval of the loan be conditioned upon the following: 1. Execution of a second USDA Conservation Program Contract for $354.971. 2. Company's Funding Agreement shall include a "step-up" provision. 3. All standard contracting provisions of the CWCS Loan Program including, a revised Debt Service Reserve Fund Provision that requires two annual loan payments (one annual payment set aside at the time of first draw of funds and one third of an annual payment set aside at the time of each of the first three annual loan payments. Email copy: Oran White, President, Mancos Valley Beaver Ditch Company Raymond Keith, Mancos Conservation District Mike Rich. District Conservationist. Engineeringrrechnical Support, NRCS Cortez Service Center Amy Stengel, AGO e Attachment Project Data Sheet and Board Memo, Agenda Item 4a, Revised September 17. 2004