PROJ00204 App Letter - Laserfiche WebLink

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. . . Discussion Staff has reviewed, in varying levels of detail, the planning studies prepared for the Plateau Creek Pipeline project over the last eleven years. In May of 1998, staff prepared a report summarizing that review. In support of the present funding request, the District prepared a packet of financial and technical information, which has also been reviewed by CWCB staff. Based on these reviews and analyses, staff has concluded that the Plateau Creek Pipeline project is economically, financially and technically feasible. Both the 1988 and 1999 authorizations for the project represent a level of CWCB funding at 50 percent of total project costs. Staffrecommends continuation ofthe same level of funding using the most recent cost estimate of$55.36 million. Fifty percent of this figure would amount to $27.68 million. Subtracting the $17.6 million previously authorized would imply an increase of about $]0.0 million in the project authorizations. . A 1990 median household income (MHI) estimate for the District's service area is not available. For Mesa County, MIll for 1990 was $23,698, which may provide a reasonable estimate for the Ute service area. This would also imply a low-income lending rate for this loan. Staff believes, however, that the majority of the development that has occurred within the District in the last nine years is not low-income in nature. (According to information provided by the Division of Local Government, 1993 MHl for Mesa County was $28,089.) Staffwill therefore recommend the Municipa] Standard (or middle income) rate of 5.0 percent for a 30-year term for this additional increment of funding. The loan contract would be with the Ute Water Conservancy District acting by and through its Ute Water Activity EnteIprise. Pursuant to Amendment One, the EnteIprise currently receives less than ten percent of total annual revenues in taxes and has the ability to incur multi-year indebtedness and to issue its own revenue bonds. Recommendation Staff recommends that the Board request an increase of $10,000,000 in the Ute Water Conservancy District's 1999 authorization for the Plateau Creek Pipeline Rep]acement Project. Staff proposes that the entire $ ] 0,000,000 be funded from the PeIpetual Base Account of the Severance Tax Trust Fund. The $10,000,000 increment of additional funding would be for thirty years at a lending rate of 5.0 percent. Total lending (Construction Fund and Severance Tax Trust Fund) for the project would amount to $27,600,000 not to exceed 50 percent oftota] project costs. As security for the loan, the District and the Ute Water Activity EnteIprise will pledge water system revenues and the Plateau Creek Pipeline Project. Staff further recommends that: . 1. The boards of directors ofthe Ute Water Conservancy District and the Ute Water Activity EnteIprise will adopt a resolution or resolutions approving the 5