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I I I I I I I I I I I I I I I I I I I account for loan repayment. In the past, annual operations and maintenance costs for both ditch systems were budgeted about $165,000, as shown on Table I. In the future, the project will reduce ditch operations and maintenance costs by approximately $10,000 because the project will abandon a significant portion of the Welch Ditch system. There will be additional pumping costs associated with the project for the Lena Gulch, Rolling Hills, and East Reservoir pump stations. Pumping costs were based on estimates obtained from a Public Service Company representative. Future pumping costs for the Lena Gulch and Rolling Hills pump stations were estimated to be $10,000 based on 1,000 ac-ft pumped and an a\'erage cost of$10 per acre-foot. The pump station at East Reservoir will be built in the future by Consolidated Mutual regardless of whether the project is undertaken, therefore, the estimated pumping cost of $3,000 for that station is not considered an increased cost due to the proposed project. Therefore, the total increase in pumping costs due td the project will be $10,000, which will be offset by the future reduction in ditch operations and maintenance costs outlined above. The annual CWCB loan payment and increases in depreciation due to the project will be offset by a combination of reductions in ditch operations and maintenance, water carrying charges, salary and related expenses, legal and engineering fees, and a reduction in the contingency, as shown in Table I. Table 2 showing cash flow for a $300,000 CWCB loan at 5.25 percent interest over a 30-year repayment period is attached. The table breaks out annual revenues and expenditures for both the Agricultural and Welch Ditches. Collateral The Ditch Company has the following collateral it can offer for the CWCB loan: The project itself can be offered as collateral. The project will be owned by the Ditch Company and Golden Reservoir and Canal Company and can be offered by vote of the Board of Directors. The land surrounding the Midway Reservoirs in Lakewood is owned by the Ditch Company and can be offered by vote of the Board of Directors. As a final resort, the Ditch company has the ability to assess its members to pay for the CWCB loan. The Agricultural Ditch and Welch Ditch shareholders can be assessed separately to pay for their proportionate - 11 - I Bishop-Brogden Associates, Inc.