C150152 Approval Letter

• Contract/PO #: C150152
• Contractor Name: New Castle, Town of
• Contract Type: Loan
• Water District: 39
• County: Garfield
• Loan Projects - Doc Type: Approval Letter

Town of New Castle - Colorado River Diversion
July 28-29, 2003

Agenda Item 21f

Table 1: Project Funding Sources

Funding Source Amount
CWCS Loan $700,000
State SEP Grant $200,000
Colorado River WCD Grant $ 15,000
Town of New Castle - Utilitv Fund $ 91,900
Total 1,006,900

Table 2 is a summary of the financial aspects of the project. A CWCS Small Project Loan of
$700,000 would have an annual payment of $47,271 (including the 10% reserve requirement) at the
loan terms of 4.5% for 30 years.

Table 2. Financial Summary

$1,006,900
2,628
1001
$700,000
$47,271
$24.50
$28.50
$3.94
$118.18

Creditworthiness: The Town's Utility Funds currently has two outstanding loans. One is a 1999
loan for $917,076 with the Colorado Water Resources and Power Development Authority
(CWRPDA) for wastewater treatment plant improvements. This loan has a remaining amount of
$418,427, ending in 2019, with an annual payment of $36,200. The second is a 1995 loan for
$65,000 with the Colorado Department of Local Affairs for a water tank, pumping and distribution
lines. This loan has a remaining amount of $17,261, ending in 2004 with an annual payment of
$9283. CWCS will require parity of pledged enterprise funds revenues with the CWRPDA loan.

Alternative financing sources: The Town has received a $15,000 grant from the Colorado River.
Water Conservation District for design assistance. In addition, a grant of $200,000 has been
awarded from the Colorado Department of Health SEP (Supplemental Environmental Project.) for
the project. Also, in April 2003, the Town applied to the Department of Local Affairs (DOLA) for a
$300,000 grant (Energy Impact Assistance Program). Grant funding from DOLA through the federal
mineral lease program would be applied toward the total construction project cost and thereby
reduce tap fees. A decision on the grant request is not expected until August 2003. If awarded
the Town states that they would likely decrease the amount of the requested loan of $700,000.
Staff recommends that any DOLA grant funds that might be obtained be used to reduce the amount
of the CWCS loan principal, and that the loan re-amortized to reduce the annual loan repayment

Table 2 shows the Financial Ratios for the Town and indicates average to strong ability to repay the
$700,000 CWCS loan, assuming that the Utility Fund receives at least $110,000 in annual water
and sewer tap fee revenues.

The Town's tap fee revenue history has been as follows:

2003 - $200,000 (Assumed 2003 budget)
2002 - $545,125

2001 - $407,539
2000 - $450,795

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