BOARD00063 ‎(2)‎

• Board Meeting Date: 11/13/2006
• Description: CF Section - Construction Fund and Severance Tax Trust Fund Perpetual Base Account New Loans - Penrose Water District - Water Rights Purchase and Raw Water Pipeline Project
• Board Meetings - Doc Type: Memo

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Penrose Water District
November 13-15, 2006

Agenda Item 10c

The Total Project cQst is estimated to be:

1.
2.
3.
4.
5.
6.
7.
8.

Water Rights Purchase
Water Rights Acquisition Costs
Water Rights Change/Augmentation Plan
Construction - Return Flow Obligation
Construction - Well Field*
Construction - Pipeline*
Construction - Brush Hollow Enlargement*
General - Administrative & Legal
TOTAL

$1,400,000
378,100
600,000
706,000
1,591,400
3,873,300
1,071,200
110.000
$9,730,000

(non-CWCB)

* Includes engineering, 20% contingency

Schedule - The purchase of the water rights occurred in July 2005. The Water Court application
was filed in February 2006, with an anticipated court date in late 2008. Negotiations with objectors
are currently in process. Reservoir enlargement would occur in 2007-08, and pipeline and well field
construction in 2008-09. The overall project is expected to be completed in January 2010. The
necessary County, State and Federal permits will be obtained. State Engineer's Office approval will
be required for the dam modifications.

Financial Analvsis

The total estimated cost of the project is $9,730,000. The District qualifies for the Municipal Low-
Income interest rate, and staff is recommending a maximum loan amount of $8,757,000 (90% of the
estimated project cost) for 30 years at an interest rate of 3.25%. The Enterprise will pay the 10%
local share ($973,000) of the project cost, through an Agreement with the District, from retained
earnings that are non-tax based, or a combination of these reserve funds and a future DOLA
Energy and Mineral Impact Assistance Grant (EMIA), generated through mineral lease revenues.

Table 1 is a summary of the financial aspects of the project. A CWCB Loan of $8,757,000 would
have an annual payment of $461 ,334 (not.including a 10% reserve requirement) at the loan terms
of 3.25% for 30 years. In lieu of pledging an annual reserve of 10% of the annual payment for 10
years, the Enterprise will establish a CWCB debt reserve fund with $461,334 at the project onset,
through an Agreement with the District, from retained earnings that are non-tax based.

Table 1. Financial Summary

Project Cost $9,730,000
Number of Existing Water Taps 1700
CWCB Loan Amount (30 years) $8,757,000
CWCB Loan Payment (not including 10% reserve) - Begin 2011 $461,334
Current Total Monthly Water Rate (Average) - 2005 $31.75
Future Total Monthly Water Cost - Begin 2010 $41.00
Monthlv Per Tap Cost of CWCB Loan $22.61
Annual Loan Cost per Acre-Foot (based on aver. 339 aC.-ft. delivery) $1,360

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