---
kind: "section"
citation: "43 C.F.R. § 404.39"
title: "43"
number: "404.39"
heading: "What factors will Reclamation consider in evaluating my capability to pay 25 percent or more of the construction costs?"
url: "https://uscodex.org/cfr/43/404.39"
---

# §404.39. What factors will Reclamation consider in evaluating my capability to pay 25 percent or more of the construction costs?


Reclamation will consider the following factors:

- (a) **Economic factors for the project area, relative to the state average, including—**
  - (1) Per capita income;
  - (2) Median household income; and
  - (3) The poverty rate;
- (b) The ability of the project sponsor to raise tax revenues or assess fees such as user fees and ad valorum taxes or issue bonds;
- (c) The strength of the project sponsor financial statements in comparison to other similar entities over the previous 4 years, including a review of:
  - (1) Current (includes cash and inventory) and non-current assets (property, plants etc.);
  - (2) Net Assets (total assets minus total liabilities);
  - (3) Changes to net assets;
  - (4) Operating revenues (water and power sales);
  - (5) Operating expenses (variable costs and depreciation, maintenance and repair);
  - (6) Cash flow from operating activities (positive value from water sales minus payments to supplies and employees);
  - (7) Current (current bonds payable and accounts payable) and non-current liabilities (long term debt payable);
  - (8) Outstanding debts and all other financial obligations;
  - (9) Collateral/equity as appropriate;
  - (10) Cash flows from capital and related financing activities (negative value from principle paid on bonds and interest payments);
  - (11) Net cash flow; and
  - (12) Any non-operating revenues and expenses;
- (d) Funding commitments from non-Federal sources, other than the non-Federal project sponsor, including resources committed by state, county, or local governments;
- (e) The existing cost of water and the cost to develop new water supplies in the region; and
- (f) The impact of the proposed project on water rates;
- (g) The projected impact of the proposed project on the non-Federal project sponsor's ability to raise or generate revenues;
- (h) The non-Federal project sponsor's financial history including their past performance on repaying loans and other debts; and
- (i) Any other financial means of the non-Federal project sponsor that is not captured in this subsection.

## Notes

### Authority

Authority: Public Law 109-451 (43 U.S.C. 2401 et seq. )

### Source

Source: 73 FR 67782, Nov. 17, 2008, unless otherwise noted.