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<br />I <br /> <br />" <br /> <br />Agenda Item 7.a.l <br />September 7, 1995 <br /> <br />2 <br /> <br />. <br /> <br />AGUA does not currently have fIxed assets or water rights that it can pledge as collateral for <br />the Feasibility loan. They would like to pledge accounts receivable and new well assessments <br />as collateral. <br /> <br />AGUA is currently requesting $25,000 of the estimated total Feasibility Study cost of $75,000, <br />but say that they may need to request additional funds as the study progresses. The CWCB <br />normally loans up to 50% of the cost of feasibility studies. <br /> <br />AGUA understands that it will be required to repay the cost of the feasibility study, regardless <br />of whether a viable alternative is found. If an augmentation plan ultimately results which is <br />funded by a CWCB loan, the cost of this feasibility study can be rolled into that loan. <br /> <br />(As of the date of this memo AGUA's engineer has not yet submitted a plan of study, and <br />AGUA's financial condition and ability to pay have not been reviewed by staff.) <br /> <br />STAFF RECOMMENDATION <br /> <br />The staff recommends: <br /> <br />. <br /> <br />1. That a Construction Fund Loan in amount of $25,000 (4% interest..Agricultural <br />rate) be approved for the Arkansas Ground Water Users Association, to conduct a <br />feasibility study to evaluate alternatives for a substitute supply plan, and <br /> <br />2. That repayment of the loan can be included as part of a subsequent loan for an <br />augmentation plan. H an augmentation plan is not implemented, and/or there is no <br />subsequent Construction Fund loan, then this feasibility study loan will be repaid <br />over a 10 year period, amortizing all principal and accrued interest, and <br /> <br />3. That loan approval will be contingent upon staff review and acceptance of the <br />Plan of Study submitted by AGUA's Engineer, and <br /> <br />4. That loan approval will be contingent upon review of AGUA's f"mancial condition <br />and ability to repay, and upon a determination that there is sufficient collateral for <br />the subject loan, and upon all other standard contracting requirements of the <br />CWCR. <br /> <br />Attachments <br />C:\wp51\PROJ-NEW\7al.sep <br /> <br />. <br />