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I I Ability to pay I The determination of the ability to pay for drinking water is not as straightforward as a similar determination for a use halTing a monetary return that can be attributed to the water, such as an irrigation use. Obviously a potential customer who does not now have a potable water supply may be willing to pay several times the amount that another would who has a usable water supply. As present ground-water supplies deteriorate in quality, and the users become more aware of the health aspects, it is expected that ability or willingness to pay will also change. Based upon the estimated present costs it is assuMed an average revenue of $35 per tap is within the payment capacity of the residents. A more definitive deter- mination will be available soon when the residents within the proposed district vote for or against the organization of the district. I I I I I I Proiected costs per tap The estimated monthly cost per tap will depend primarily upon two factors, (1) the number of taps and (2) the financial arrangements (i.e., interest rate and repayment period). Table 9 presents the approximate monthly cost per tap based on 1900 taps and various financial arrangements. I I Table 9. Esti8ated Average Monthly Cost per TaPll for Debt Service Plus O&M and \vater Costs - I Interest Repayment Period Rate 20 Year>: 30 Years 40 Years 4% $39 $34 $31 5% $41 $36 $34 6% $43 $39 $37 7% $46 $41 $39 I I I II - Assumes 1900 taps with $244,300 average annual operation and maintenance cost and $81,000 average annual water cost with $7.6 million loan principal. I It can be noted from Table 10 that a 3D-year repayment period at 4% interest or a 4Q-year repayment period at 5% interest is needed in order to stay within the $35 per month per tap figure. I I I - 19 - M. W. BITTINGER AND ASSOCIATES, INC.