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. . I Agenda Item 18 January 20, 1995 Page 4 e STAFF RECOMMENDA nON The draft feasibility study presents a number of logical alternatives for supplying water in the winter months to the Norwood area and does an excellent job of using both monetary and non-monetary factors to evaluate alternatives and to identify the selected alternative which is the 30 million gallon reservoir at an estimated capital cost of $1,019,350. In addition, the applicant is proposing $59,400 in improvements to diversion and flow monitoring facilities as part of the project for a total cost of $1,078,750 (a copy of the cost estimate is attached). Total CWCB funding of $950,000 would amount to approximately 88 percent of project costs. The new reservoir would provide Norwood with adequate raw water storage for the next 30 to 40 years and would eliminate any real operating problems for the Farmers Water Development Company in the winter months. The project would have few, if any, permitting problems, would utilize an existing all-gravity system, and would be higWy compatible with the San Miguel Project as proposed. The Board staff concurs in the study's recommendation for a 30 million gallon reservoir. While the increase in monthly water bills and the capital cost per tap are significant they do not appear to be unreasonable. The cash flow projections indicate that, with a moderate rate a increase, the project is fmancially feasible. The reservoir will be pledged as collateral for the ., loan. Water rights and ownership of sufficient shares in the Gurley Reservoir to fully utilize the proposed reservoir and provide sufficient water in the winter months with increasing demands remain a concern. The staff will request that the applicant provide further documentation of a plan for dealing with these items. The staff recommends that: I. Supplemental funding be approved in the amount of $630,000 at an interest rate of 4.0 percent for a repayment period of 40 years. 2. The loan shall be contingent upon satisfactory completion of the draft feasibility study and acceptance of the final version of the feasibility study by the staff. 3. The loan shall also be contingent upon submittal to the CWCS staff of a detailed plan, approved by the Norwood Water Commission, for acquiring and utilizing adequate water supplies for the purposes of the proposed project. The plan may be submitted as a part of the feasibility study or as a separate document. 4. The loan shall be further contingent upon all standard contracting provisions of the CWCB. e