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<br />-6- <br /> <br />2. The money in escrow will still be at our disposal in the event that <br />we need it; <br /> <br />3. We do not have to commit ourselves to the suggested installment <br />schedule. I can say with some certainty that we can make the $900,000 <br />transfer this year with no adverse effect on the budget. It is difficult <br />to predict the future--it may be that we will decide to give more or less <br />than proposed in future years. The size and dates of the Escrow install- <br />ments are flexible so long as we end up with a compounded sum of $1.6 <br />,million in 1985 if we built the plant or $3.2 million in the late 80' s to pay <br />for a sub-station if we don't build the plant. It is interesting that we <br />would need to set aside twice as much inoney if we do not build the plant <br />than we would if we do build the plant. <br /> <br />I f we decide to build the plant, and if we are not able to put enough <br />money in Escrow by 1985, we can elect to use the Ramped Capitalized <br />I nterest concept. <br /> <br />CONCLUSIONS: <br /> <br />The long term profitability of the project is good. <br /> <br />There is a high probability of short-term cash shortfall. <br /> <br />The shortfalls can be paid for with no tax increase to the citizens and no <br />disruption to or sacrifice of other City services by either transferring <br />Electric Department Surplus to an Escrow Account, the Ramped Capitalized <br />I nterest concept, or both. <br /> <br />The project can stand on its ownby paying for itself without transferring <br />money from other funds or raising electric rates to levels beyond those <br />charged by Appalachian Power Company. <br /> <br />*** <br />