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<br />distribution lines in town. Some of this is, replacement of old line <br /> <br /> <br />that is substa.'1dard in size, some is pipeline In ne'l areas of service <br /> <br /> <br />and some is replacement of pipeline that is not onJ,y too small, but <br /> <br /> <br />it is old and not bu:ri.ed at a proper depth. Along with this, we recommend <br /> <br /> <br />that several new valves end fire p~drants be installed. <br /> <br /> <br />Project Costs <br />The total cost for the project as outlined above, including contin- <br />gencies, engineering, inflation factors and a~~tnistration, is <br />$382,367.89. The tal'll has an application on file ,rith H.U.D. for grant <br />monies to cover the major portion of this project. There are other <br />agencies, such as Farmers' Home Adrninistraction and E.D.A., that Rico <br />is approaching for grant monies also. We estimate the rnirWnllJl1 amount <br />of grant money that ,rill be needed to make this project feasible w.i1l be <br />$305,894,31. This leaves a balarlce of $76,473.58 that Rico must borro,j <br />from the Co1o!'ado 'dater Conservation Board. This study compares the <br />relative annual costs for rep~vment of $76,473.58 at 1% and at, 3% simple <br />interest over a forty year repaywent period. The 3% interest rate will, <br />of course, require a more substantial increase in water revenues than <br />the 1% interest rate. The final detemination of the most practical <br />interest rate will be ascertained by reasonable water use rates, <br /> <br />Conclusions <br /> <br />The need for this project is self-evident. The most important <br /> <br />consideration is the financing arrl the high cost of reconstruction of <br /> <br />the town's system. Every logical means of procurement must be explored. <br /> <br />leans, grants and participation from several agencies will be needed. The <br /> <br />townspeople ..i.ll be called upon to participate with increased water <br /> <br />use rates. Participation by Rico Argentine Hining Conpany ill the financing <br /> <br />- 4 ~ <br />