PROJ00202

• Contract/PO #: C153474
• Contractor Name: Oak Creek, Town of
• Water District: 0
• County: Rio Blanco
• Bill Number: XB 99-999
• Loan Projects - Doc Type: Feasibility Study

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CHAPTER VI - PROJECT EVALUATION

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VI.1 General

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The project to be constructed with this loan from the CWCB Construction
Fund is a single-purpose project for the municipal water supply to the Town of
Oak Creek. The estimate of the Town's ability to repay this loan in accor-
dance with the schedule detailed in Table 4 is based on a review of the
Comprehensive Annual Financial Report for the Town of Oak Creek for the year
ended December 31, 1985, prepared by Albaugh & Lee, P.C., Certified Public
Accountants, and upon interviews with Mr. Albaugh of Albaugh & Lee and with
Ms. Nancy Crawford, Town Manager of Oak Creek. The financial data for
interest revenue, property tax revenues, and operation and maintenance costs,
presented in Table 4, are based directly upon Statement 6, "Enterprise
Fund-Water, Statement of Revenues and Expenditures for the Year Ended December
31, 1985," in the Annual Financial Report. The debt service schedules for the
1976 and 1985 series bond issues are also found in the Annual Financial
Report, page 28.

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For purposes of the proposed repayment schedule presented in Table 4
herein, the following assumptions have been made:

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1. A constant projection of annual property tax revenues of $22,000 ear-
marked for the water fund, based upon 1985 actual revenues.

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2. A constant projection of interest revenue to the water fund in the
future of $1,800 per year based on 1985 actual revenues.

3. A beginning balance of zero in the water fund on January 1, 1987.

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4. Revenue for future annual payment requirements in excess of 1985
revenue levels is to be obtained through rate increases for water
service, rather than through increased property taxes.

5. Actual 1985 itemized expenditures detailed in the Town of Oak Creek's
1985 Financial Report for depreciation, "operating transfers" from
the water fund to the general fund, and "capital outlay" have been
eliminated from the assumed future obligations upon the water fund.
("Capital outlay" was a one-time-only expenditure for the Town's
street prOject that was financed by the 1985 bonds.) After
subtracting these items from the total 1985 water expenditures, this
remaining total of approximately $50,000 for actual 1985 expenditures
for the water fund was increased by 20 percent to $60,000 per year,
which was used as a flat projection of O&M costs in Table 4.

6. Actual 1985 itemized expenditures for interest and bond payments are
reported separately in Table 4, in accordance with debt service sche-
dules furnished by the Town's bond counsel, Hanifen-Imhoff, Inc., for
the 1976 and 1985 series general obligation water bonds.