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<br />. <br /> <br />. <br /> <br />For the first two segments, it's probably safe to assume that the value of capacity in the <br />SWSP will remain at original cost or may appreciate since the project is located in a <br />rapidly developing part of the state. <br /> <br />Development near the third segment is more limited but there is an interest by <br />communities east of Fort Morgan in participating in the SWSP because of problems with <br />groundwater quality in the area. Public Service Co. has also expressed an interest in <br />utilizing some ofthe capacity in the SWSP for their Pawnee generating plant near Fort <br />Morgan. <br /> <br />Conclusions <br /> <br />I believe that the $21.5 million total cost of Fort Morgan's participation in the SWSP <br />represents a good approximation of the value of the Board's collateral. For total lending <br />then of$13.5 million, the loans are secured by collateral with an apparent value of about <br />$21.5 million. In the event that the market value of the third segment is less than $13.5 <br />million, it still appears as ifthere is still more than sufficient value in the entire project to <br />cover the loan. <br /> <br />Cc: Bill Stanton <br />Mike Serlet <br />J an Illian <br />Linda Bassi, AGO <br /> <br />2 <br />