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<br />Town of HiIlrose <br />July 20-21. 2004 <br /> <br />Agenda Item 14b <br /> <br />recharge well. The ponds would be filled with a junior water right. The cost of this alternative would <br />range from $250,000 to $500,000. The uncertainty of a junior water right to meet their dry-year <br />need makes this alternative not acceptable to the Town, at this time. <br /> <br />Selected Alternative 2, Purchase senior water rights to use for augmentation - The Town has <br />elected Alternative 2. Features of this alternative are as follows: <br /> <br />1. Purchase 2 shares of Jackson Reservoir Company, and 0.25 shares of Riverside <br />Reservoir Company. <br />2. Incorporate the water directly into the LP&B plan, and if necessary in the future obtain a <br />change of use and augmentation plan approval. <br /> <br />The Total Project cost is estimated to be: <br /> <br />1. <br />2. <br />3. <br /> <br />Planning and Engineering Costs <br />Water Acquisition Costs <br />Water Shares Purchase <br />TOTAL <br /> <br />$ 1,700 <br />3,300 <br />71.250 <br />$76,250 <br /> <br />Note: Costs do not include any legal and engineering costs to obtain a change in use of water <br />shares or augmentation plan approval by water court. <br /> <br />Financial Analvsis <br /> <br />The total estimated cost of the project is $76,250. The Town qualifies for the Municipal Low-Income <br />interest rate, and staff is recommending a maximum loan amount of $68,625 (90% of the estimated <br />project cost) for 30 years at an interest rate of 3.5%. The Town will pay the additional $7,625 of <br />the project cost. <br /> <br />Table 1 is a summary of the financial aspects of the project. A CWCB Loan of $68,625 would have <br />an annual payment of $ 4,104 (including the 10% reserve requirement) at the loan terms of 3.5% for <br />30 years. The annual loan cost for the project will be $ 228 per acre foot of consumptive use <br />produced from the purchased shares. <br /> <br />Table 1. Financial Summary <br /> <br /> <br />e of 18 AF of consum . use) <br /> <br />$76,250 <br />254 <br />112 <br />$68,625 <br />$4,104 <br />$14.50 <br />$24,50 <br />$3.05 <br />$228 <br /> <br />Creditworthiness: The Town's Water Enterprise Fund has no outstanding long-term debt. The <br />Town has obtained temporary financing for the water rights purchase from the Bank of Colorado in <br />Brush, in the amount of $74,425. This loan will be paid off with the CWCB loan. <br /> <br />Page 3 of 5 <br />