BOARD00105 ‎(2)‎

• Board Meeting Date: 1/23/2007
• Description: CF Section - New Project Loans - Seven Lakes Reservoir Co. - Dry Creek Railroad Crossing Rehabilitation
• Board Meetings - Doc Type: Memo

Seven Lakes Reservoir Company
January 23-24, 2007

Agenda Item 9,~

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The Total Project cost is estimated to be:

1.
2.
3.

Engineering Design/Feasibility Study
Construction (incl. 20% contingency)
Other (Construction Mgt. Services)
TOTAL

$ 75,475
704,735
70,000
$850,210

Schedule -If the loan is approved by the CWCB, design would occur in February-May 2007.
Approval of plans and specifications by BNSF would occur between June-September 2007.
Construction would start in October 2007 and be completed by May 2008. SLRC will seek
input from the City of Greeley regarding construction in the proximity of the existing 42" raw
water pipeline. Other agencies including the City of Loveland, USACE, PUC and the Water
Quality Control Division will be contacted to assure that all necessary permits are acquired.

Financial Analysis

The total estimated cost of the project is $850,210. SLRC share ownership is 37.1 % agricultural
(2.50%) and 62.9 % municipal (3.25%) and they qualify for a blended interest rate. Municipal
shares are owned by the cities of Greeley and Evans. Staff is recommending a maximum loan
amount of $765,190 (90% of the estimated project cost) for 30 years at an interest rate of
2.95%. SLRC will pay the 10% local share ($85,020) of the project cost from existing reserves.

Table 1 is a summary of the financial aspects of the project. A CWCB Loan of $765,190 would
have an annual payment of $42,666 (including the 10% reserve requirement) at the loan terms .
of 2.95% for 30 years.

Table 1. Financial Summary

Project Cost $850,210
Number of Shareholders 63
Number of Shares of Stock 400
CWCB Loan Amount (30 years) $765,190
CWCB Loan Payment (includes a 10% reserve) $42,666
Current Assessment per share (2006) $175
New Assessments per share $281
Annual Loan Cost per acre-foot (total annual storage 7,796 ac-ft.) $5.47

Creditworthiness: The SLRC has no existing debt other than a principal amount of $2,119
owed to GLlC to be paid off by March 31, 2008, prior to the commencement of debt service for
the proposed CWCB Loan. The existing outstanding principal amount of $2,119 is the
remainder of a1 O-year loan to offset GLlC's cost of a 1998 feasibility study.

Table 2 shows the Financial Ratios and indicates overall average to strong ability to repay the
$765,190 CWCB loan, with the increased assessments.

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