Laserfiche WebLink
<br />VII-l <br /> <br />SECTION VII <br />PROJECT FINANCIAL EVALUATION <br /> <br />ALTERNATE METHODS OF CAPITAL FINANCING <br />Alternate potential methods of cqpital financing for the proposed pro- <br />ject include: privately purchased general obligation bonds, government- <br />backed revenue bonds, and other qvailable programs. <br /> <br />The debt service requirement will depend'upon the method of capital fin- <br /> <br /> <br />ancing. If conventional privately purchased general obligation bonds <br /> <br /> <br />are sold, the estimated interest rate would be approximately eight per- <br /> <br /> <br />cent. Using an assumed net inte~est rate of eight percent and level <br /> <br /> <br />debt service over a 20-year amortization period, the level debt service <br /> <br /> <br />requirement for the first phase tapital estimate would be approximately <br /> <br /> <br />$32,975 per year. <br /> <br />rf the system could not be reasol1ably privately financed, it would be <br /> <br /> <br />possible to apply for financing through the Farmers Home Administration. <br /> <br /> <br />Present FHA regulations provide for revenue bond purchases at a five per- <br /> <br /> <br />cent interest rate, repayable over a 40-year period. Level debt service <br /> <br /> <br />on this basis, assuming the emergency reserve replacement fund would be <br /> <br /> <br />derived from tap fees, would be approximately $18,730. However, it <br /> <br /> <br />appears that FHA will be unable to make a grant to the Allenspark District <br /> <br /> <br />at this time because funds are not available. <br /> <br />Another available source of funds for the capital financing of the pro- <br /> <br /> <br />ject is the Colorado Water Conservation Board. The Board has a flexible <br /> <br /> <br />program of financing, where the interest rate is set based on the District's <br /> <br /> <br />"ability to pay". The Board can make 30-year loans for up to one-half of <br /> <br /> <br />the total project cost at a minimum interest rate of 1%. Funds for the <br /> <br /> <br />remaining one-half of project COsts must be obtained from another source. <br /> <br />The Allenspark District sent out an inquiry letter to determine if the <br /> <br /> <br />potential District users would be in favor of paying a monthly service <br /> <br /> <br />charge of $13.50/month for year-round users and $10.80/month for summer <br /> <br /> <br />residents. The response was overwhelming in that the community residents <br />