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<br />. <br /> <br />, <br /> <br />The District is requesting a 30-year loan for $3,0 million. With a median household income <br />of about $23,000, the District is qualified for the Low Income lending rate, <br /> <br />As requested by the Board, the District has completed a second feasibility study of several <br />additional alternatives for the expansion of the MCQWD water supply system, These <br />alternatives include both the extension of the SWSP to the District's service area as well as <br />the continued use of the Hay Gulch Wells, <br /> <br />A total of five alternatives were evaluated in the feasibility study, The two least-cost <br />alternatives include continuing use of the Hay Gulch Wells as opposed to participation in the <br />SWSP, The least-cost alternative was based on continued leasing of the wells with a total 30. <br />year present worth cost of $6,409,000. The second least expensive alternative was the <br />purchase of the Hay Gulch Wells with a 30-year present worth cost of $7,147,000, <br /> <br />With regard to the SWSP, it is still the District's intention to participate in the project but <br />with a slightly different configuration of facilities and at a somewhat reduced cost for the Fort <br />Morgan segment of the pipeline, The District expects, at the present time, that it will fund <br />the SWSP costs itself and that participation in the SWSP may not occur for a number of <br />years, <br /> <br />The District is not an "enterprise" as defined in the TABOR amendment. It will therefore <br />submit to the voters this November the questions of the purchase of the Hay Gulch Wells and <br />of incurring $3,0 million of indebtedness as a result of a Construction Fund loan, <br /> <br />With regard to financial feasibility, the analysis included with my January 23 memorandum to <br />the Board indicated that the current financial condition of the District is sound and that a loan <br />of $4.26 million would not severely impact the water users and taxpayers of the District. <br />Since the current funding request is for approximately $1.26 million less than the previous <br />request, it seems logical to conclude that there would be no adverse financial impacts, The <br />financial projections included in the most recent feasibility study indicate that the District <br />would pay for the project with revenues from water sales, ad valorem taxes, and tap fees none <br />of which would have to be significantly increased, <br /> <br />The District is presently working with the staff of the Colorado Water Resources & Power <br />Development Authority to prepare a bond issue for the refinancing of the District's existing <br />water bonds, <br /> <br />The feasibility study indicates that the acquisition of the Hay Gulch Wells is one part of an <br />overall program of improvements to and expansions of the MCQWD system estimated to cost <br />about $6,5 million over the next 30 years and that, to date, the District has expended about <br />$1,016,000 on this program. This suggests that the entire loan request of $3,0 million would <br />be eligible for funding as 75 percent of total costs to date, <br /> <br />It is the staffs opinion that the proposed acquisition of the Hay Gulch Wells by the MCQWD <br />would be technically, economically, and financially feasible, While the purchase of the <br />wells is not the least-cost alternative, it would allow the District to have a much greater <br />