C153739 Feasibility Study - Laserfiche WebLink

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Aristocrat Ranchette Water Project, Inc. Feasibility Study a I I I I I I I I I I I I I I I I I I I The company currently has 306 shareholders with a rate structure of $18 for the first 3000 gallons, plus $2.90/1000 gallons up to 20,000 gallons, and $5.80/10-00 gallons after that. The Company also adds a surcharge of $10 to each monthly bill to help fund the project. The average annualized water bill for the 306 customers is $38/month, based on this rate structure. ARWP/s financial condition appears good at the present time. ARWP is not in default on any of its current obligations. ARWP has existing loans with Farmer's Home Administration, which encumber the existing delivery system, in the original amount of $690,000.00. All payments have been made in a timely manner, according to FmHA records. The CWCB loan will be repaid primarily by revenue obtained from existing customers and by expansion of the system to the remaining residents. Of the residents presently on cisterns, 25 have indicated a willingness to purchase a tap immediately upon construction and availability of taps. Many others have indicated that they will purchase a tap within the first year after construction. ARWP plans to keep tap fees priced reasonably to increase the likelihood of future customers. As water availability decreases, the tap fees will be increased and then, eventually, taps will once again be discontinued. ARWP/s financial statements and ~udits are shown in Appendix E. ARWP has requested funding from Rural Community Assistance Corporation (RCAC) and has been initially approved for a loan in amount t of $700/000 and a Grant in amount of $1/057,000. The letter of commitment from RD is included in Appendix F. ARWP continues to pursue a grant from the Division of Local Government in approximate amount of $100/000. If this grant is received it will either decrease the loan requested from CWCB, if received prior to funding, or de~rease the loan directly, if received after funding. The source of financing for the Durchase of the water shares is a $600/000 loan authorization from the Colorado Water Conservation Board (CWCB). The ARWP Resoluti~n to apply for CWCB loan, the CWCB Loan Application, and the CWCB Memorandum of Loan Approval and Approval Letter are found in Appendix K. ARWP will need to increase the rate structure to fund this project such that the average annualized water bill for the 306 customers is about $66/month. A rate structure of $60 plus $1.75/1000 gallons was approved ~y the shareholders April 1, 1997. The shareholder resolution and rate proposal is included in Appendix J. Under this project, customers will have an . ~ -