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<br />interest rate of about 7 percent. <br />The staff of the board is unable to concur with the total request. <br />Depending upon the yield of the aquifer north of the city, construction <br />of phase two does not appear necessary in the immediate future. How- <br />ever, this situation could change rapidly if wells constructed north of <br />the city do not prove to be successful. <br />Current water rates in the city are $0.20 per thousand gallons. <br />This rate is very reasonable. Construction of phase one of the pro- <br />posed project would cause an increase in rates of about $0.12 per <br />thousand gallons - a percentage increase of about 60 percent. Construc- <br />tion of both phases will increase the rate to about $0.60 per thousand <br />gallons - an increase of 200 percent. <br />In round numbers the estimated cost of phase one of the proposed <br />project is $700,000. The board staff believes that $350,000 should be <br />made available from the Colorado Water Conservation Board Construction <br /> <br />Fund for fiscal year 1975-76 to assist in the construction of phase one <br /> <br /> <br />of the Gunnison project. We believe that no appropriation should be <br /> <br /> <br />requested for phase two of the project until such time as construction <br /> <br /> <br />of that phase is imminent. On this basis, phase one of the project <br /> <br /> <br />would be financed as follows: <br /> <br />CWCB Construction Fund (Water charges @ 4% - 30 yrs.) <br /> <br />Gunnison Municipal Bonds (An estimated 7% - 20 yrs.) <br />Total Project Cost <br /> <br />$350,000 <br /> <br />350,000 <br />~700,OOO <br /> <br />Under this arrangement, retirement of the capital investment would <br />require the following annual payments: <br /> <br />To Colorado Water Conservation Board for Water Charges <br /> <br />To Retirement of Municipal Bonds <br />Total Annual Capital Retirement <br /> <br />$ 20,240 <br /> <br />33,036 <br />~ 53,276 <br /> <br />-5- <br /> <br />000851 <br />