PROJ00204 App Letter - Laserfiche WebLink

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. . . . . years. The projection indicates that debt service coverage is adequate in each year of the 35-year period. The projection also indicates that the average residential water bill will increase from about $20 per month to about $25 per month, or about 25 percent. The District's water rates have not been adjusted since 1984. 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 this year, we prepared a 14-page report summarizing that review including a fairly detailed financial analysis (as summarized in this memo) that was done by CWCB staff with the assistance of the Ute Water Conservancy District staff. Based on these reviews and analyses, we have concluded that the Plateau Creek Pipeline project is economically, financially and technically feasible. The 1988 Construction Fund authorization for the project amounted to a funding level of about 50 percent of total estimated project costs for planning, design and construction. Staff will recommend the same level of CWCB funding using the most recent cost estimate for all project costs of $35,255,000. Fifty percent of this figure would amount to $17,627,500. Subtracting the $8,000,000 million authorized in 1988 would imply an increase of $9,600,000 in the project authorization. A 1990 median household income (MHI) estimate for the District's service area is not available. For Mesa County, MHI 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 since the criterion for the low-income municipal rate is an MHI of 80 percent of statewide MHI, or $24,100. Staff believes, however, that the majority of the development that has occurred within the District in the last eight years is not low-income housing. (According to information provided by the Division of Local Government, 1993 MHI for Mesa County was $28,089.) We will therefore recommend the Municipal Standard (or middle income) rate for this additional increment of funding. The loan would be to the Ute Water Conservancy District acting by and through its Ute Water Activity Enterprise. Pursuant to Amendment One, the Enterprise currently receives less than ten percent of its annual revenues in taxes and has the ability to incur multi-year indebtedness. The District has an accepted water conservation plan on file with the CWCB Office of Water Conservation. Recommendation Staff recommends that the Board recommend to the General Assembly an increase of $9,600,000 in the Ute Water Conservancy District's loan authorization for a total of $17.600,000 in funding for the planning, design, and construction of the Plateau Creek Pipeline replacement project. The term of the loan would be thirty years, as requested by the District, and the lending rate 5