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<br />. <br /> <br />. <br /> <br />haggling with the Forest Service. A letter from the Forest Service District Ranger dated May 5, <br />1997 is attached for your information. . <br /> <br />At their last director's meeting on July 2, 1997, the Overland board discussed how they might <br />assess the shareholders to pay their remaining legal expenses. There are about 10,000 shares <br />outstanding held by about 100 shareholders in the Overland Ditch Company. The legal fees <br />amount to about $3.00-3.50 per share. The December CWCB loan payment is about $3.11 per <br />share. The shareholders are usually contacted in August about their December assessments. <br /> <br />The directors wondered if the Board could defer payment of their December CWCB loan <br />payment so the company could use the money normally collected from stockholders in the fall to <br />pay their legal fees. The directors felt they could not ask shareholders for both payments <br />(estimated between $6.11 and $6,61 per share) at the same time. <br /> <br />Discussion <br /> <br />The Overland Ditch and Reservoir Company currently has two loans with the CWCB as shown <br />below: <br /> <br />Loan Contract Current Annual Due <br />Number Date Principal Terms Balance Payment Date <br />DC 153307 7/01/83 850,000 2% -40 year, 745,395 31,076 December . <br />DC 153527 9/16/88 541.947 5% -30 year, 452,005 35.255 June <br /> Totals $1,391,947 $1,197,400 $ 66,331 <br /> <br />The $850,000 CWCB loan was for construction, and the $541,947 CWCB loan was to finance <br />a reduced price repurchase agreement for the remaining balance owed on a Small Projects Loan <br />from the USBR. <br /> <br />A deferment of the first payment of the construction loan from July 1, 1986 to December I, <br />1988 was made by the Board at the request of the company due to an unexpected extended <br />completion date. In November 1994 and in November 1996, the Board granted requests for <br />deferment of the December 1994 and 1996 payments to to help offset financial losses suffered by <br />the shareholders due to a combination of a dry year and the by-pass flow release imposed since <br />1986 by the U.S. Forest Service. Otherwise, there have been no problems with the repayments <br />made to date on the company's two CWCB loans. <br /> <br />The CWCB loan contract requires the company "to adjust its operating costs and service <br />charges from time to time to provide for adequate operation and maintenance, emergency repair <br />services, obsolescence reserves, debl service, and debt reserves. " <br /> <br />. <br /> <br />2 <br />