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e' . e Agenda Item 19a (Attachment) Mancos Valley Beaver Ditch Company September 7. 2004 Page 3 of 4 Agenda Item 4a The engineering design and construction related services are provided by NRCS as in-kind services. NRCS is expected to complete the final design by September 2004. Construction is expected to begin October 2004 and to be completed in phases during 2004 and 2005. Financial Analvsis Table 1 shows a summary of the funding sources for the project. The total estimated cost of the project is $536,900. The Ditch conveys water, which is used exclusively for agricultural purposes, therefore the loan request is for an initial loan in the maximum amount of $413,000 during construction (approximately 77% of estimated total cost), reducing to $103,000 after the Project is complete and the Company receives the 75 percent construction grant ($310.000) from NRCS. Table 1. Project Funding Sources Funding Source In-Kind/Grant Loan Initial Financing Phase NRCS - Planninq and Desion $123,900 - NRCS Construction Cost Share - ' - CWCS Loan - $413,000 Company - - Total ($536,900) $123,900 $413,000 Post-Construction Financing Phase , NRCS - Planninoand Desion $123,900 - NRCS Construction Cost Share $310,000. - CWCS Loan $103,000 Companv - - Total ($536,900) $433,900 $103,000 . Received after construction is complete from NRCS Salinity Control Project. Table 2 shows a summary of the financial aspects of the Project. A CWCB Loan of $1 03,000 would have an annuai payment of $6,561 ($4,921 for the annual loan payment and $1,640 for the reserve account during the first three years - see loan conditions below) for the loan terms of 2.50% for 30- years. The annual loan payment represents a loan cost of $3.44 per acre-foot for the Project based on an average annual delivery of 1,431 acre-feet of water. Since all other funding for the Project is in the form of NRCS grants, the Company would have no other debt service on this Project. Table 2. Financial Summary of Project Total Pro'ect Cost Project Construction Cost CWCS Post-construction Loan Amount Annual Loan Pa ment Amount Annual Loan Obligation (including debt reserve funding) Annual Project Cost per acre-foot (based on 1,431 acre-ft) $536,900 $413,000 $103,000 $4,921 $6,561 $3.44/ac-ft Creditworthiness: The Company was incorporated in July of 2003 for the purpose of undertaking the Project and therefore has very little financial history. The Company has no existing debt. Repayment will be accomplished by member assessments according to the Company's Funding Agreement. Table 3 shows the Financial Ratios for the Company. The Company proposes to assess the members $701ishare to cover the CWCB Loan and maintenance costs. The Company has 10.49 shares, which is based on the amount of decreed flow in the ditch.