PROJ00457 App Letter

• Contract/PO #: C150065
• Contractor Name: Tunnel Water Company, The
• Contract Type: Loan
• Water District: 3
• County: Larimer
• Bill Number: SB 01-157
• Loan Projects - Doc Type: Approval Letter

Tunnel Water Co.
January 24-25, 2001,

Agenda Item 10b,

Credit worthiness: TWC has no debt, other than the two CWCS loans, Table 5 shows the
Financial Ratios and indicates average ability to repay with the project in place,

Table 5. Financial Ratios
Without the ro 'ect
101 % avera e
No debt (strong)

59%
$3,19

54%
$19.47

As security for the loan the TWC will pledge assessment revenues backed by assessment
covenant and Company property at least equal in value to the loan amount.

Recommendation

Staff recommends a loan not to exceed $2,080,000 to the Tunnel Water Company for
continued rehabilitation work on the Laramie-Poudre Tunnel. The recommended term of the
loan is 30 years and the recommended blended interest rate is 4,3%, (The Company would
also be allowed to borrow at 3,8% for 20-years or at 3,3% for 10-years, at its option.) Security
for the loan will be a pledge of assessment revenues backed by assessment covenant and
Company property at least equal in value to the loan amount. (Note: This loan is in addition to
the $1,6 million Emergency Loan already approved by the CWCS at terms of 4.5% for 30
years,)

Staff recommends that the Company be allowed to use this loan to refinance project costs
already completed and paid for with short term bridge financing,

Staff further recommends that final approval of the loan be conditioned upon acceptance of the
project and the associated financial obligations by a vote of the shareholders of the Company,
and all standard contracting provisions of the ewcs,

cc: Fred Walker, President, Tunnel Water Co.
Don Deere, P,E" RMC
Linda Bassi, AGO

Attachment

C:IWP51IProj-NewITunneIWaterCo1 01 memo
L:\boardmemljan01110b Tunnel Water Co

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