PROJ01803

• Contract/PO #: FS0048FX
• Contractor Name: Manitou Springs, The City of
• Contract Type: Miscellaneous
• Water District: 0
• Loan Projects - Doc Type: Feasibility Study

Mineral Springs Foundation; some cost of purchase, some cost of demolition and
construction, consultation on design and construction,
Colorado Water Conservation Board (CWCB); financing,

The City will be the lead for the demolition, repair of the wellhead, design, and construction of
the project and will be the entity entering into contracts and agreements with the various entities
for the services provided by each,

Financial Analysis

The City is requesting a 10-year loan from the CWCB, The lending rate would be 3,75%,
resulting in annual payments of $19,481,81. To finance the repayment of this loan, the City has
already instituted a surcharge of $1,00 per month on each of its 2,000 water accounts. The
balance of the proceeds of that surcharge will be applied to the costs of repair and restoration of
the spring and demolition of the motel.

Credit worthiness: The actual applicant will be the Manitou Springs Water Enterprise, At
present, the Enterprise has only two debts, one of which will be paid in full in less than a year,
The remaining obligation is owed to the Colorado Water Conservation Board for the financing of
the construction of the City's Water Treatment Plant. A history of the Enterprise's payment of
that obligation has been submitted with the application to the Colorado Water Conservation
Board,

Alternative financing considerations: The City has investigated alternative financing sources,
all of which would need to be funded as General Revenue obligations and which would first
need approval of the voters, It is not possible to seek voter approval until November 2003 and
the City believes that this project requires more immediate action,

Collateral: As security for the CWCB loan, the Enterprise proposes to pledge can pledge
income,

Economic Analysis

The economic benefit of the project is considerable, The mineral springs are a major attraction
for visitors to the area and Manitou Springs is greatly dependent on income from visitors, If
Creighton Spring were to blowout and stop the flow to other springs in the City, it is estimated
that visitor traffic could drop by as much as ten to twenty percent. In view of the downturns in
the economy in the last two years, that much of an additional drop could bring about a number
of business failures,

Social and Physical Impacts

Manitou Springs has expended a great deal of money and effort in the preservation of its
century-old atmosphere, Because of the spa and resort history of the City, the mineral springs
are a major element of the historic ambience and many visitors to the City make tours of the
various springs in order to experience their greatly varied flavors, In time of drought, such as