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<br />" <br /> <br />. <br /> <br />. <br /> <br />Agenda Item 8b <br />November 9, 1993 <br /> <br />2 <br /> <br />Total payments for all loans is currently $106,713 per year. Because the larger existing loans <br />are at 3% for 40 years, there is little or no benefit to the Company in refinancing. The <br />Iequested loan will have an annual payment of about $27,000. <br /> <br />DISCUSSION <br /> <br />1. In the opinion of staff, the rapid draw-down slide at Brush Hollow Dam is an <br />emeIgency condition qualifying for an emergency loan. <br /> <br />2. The Brush Hollow Dam CIeates a reservoir which is used fOI fishing, camping, and <br />other recreational activities. This multiple use feature is the basis for requesting an interest <br />rate 1/2% less than the standard rate. <br /> <br />3. The loan request amount of $500,000 is preliminary. A better cost estimate will <br />be available after the company's engineer completes the investigation. (Mr. Terry Arnold <br />of Woodward-Clyde will comment on the status of the investigation, and answer the Board's <br />questions, ) <br /> <br />4. Several years ago the Company suffered a substantial financial loss as the result <br />of an embezzlement. In addition, the Company currently has about $1.8 million in loans <br />outstanding to the CWCB. Although the staff has not performed a rigorous evaluation of <br />the Company's financial condition and ability to pay, to is clear that the requested loan <br />could place severe financial hardship on the Company. These facts could also justify a loan <br />rate less than the standard rate. (Several members of the Board of the Beaver Park Water <br />Company will be available to discuss these issues.) <br /> <br />STAFF RECOMMENDATION <br /> <br />The staff recommends the following motion to get the issue on the table for <br />discussion: <br /> <br />1. THAT AN EMERGENCY LOAN FROM THE CONSTRUCTION FUND IN <br />AMOUNT OF $500,000 ( 3.5% FOR 40 YEARS) BE APPROVED FOR THE <br />BEAVER PARK WATER COMPANY, FOR THE DESIGN AND <br />CONSTRUCTION OF EMERGENCY REPAIRS TO THE BRUSH HOLLOW <br />DAM, and <br /> <br />2. THAT LOAN APPROVAL BE CONTINGENT UPON EVALUATION OF <br />THE COMPANY'S FINANCIAL CONDITION AND ABILITY TO PAY. <br />