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<br />DISCUSSION <br /> <br />Due to additional work not programmed in the original cost estimate and unforeseen variations in <br />cost for specific items during construction, the overall cost of the project has increased by <br />approximately 53% or $403,405. At this time the Company is only requesting an increase of <br />$120,000 to their existing loan. The remaining $282,405 in added construction costs are being <br />covered by the Company. Therefore, the requested increase of$120,000 is only a 19% increase to <br />their current loan amount of $614,080. Staff has inspected the improvements in the field and has <br />reviewed the detailed cost summary provided by the owner and finds the additional expenses to be <br />justifiable, based on the additional work added to the project. <br /> <br />The North Poudre Irrigation Company is requesting an increase of $121,200 ($120,000 for project <br />costs and $1,200 for a 1% origination fee), to their existing loan amount of $614,080. The total <br />amended loan amount for North Poudre Irrigation Company would be $735,280 (728,000 for <br />project costs and $7,280 for a 1% origination fee), at their present interest rate of 3.25 % for 20- <br />years. The new annual payment will be $55,629, which includes the 10% reserve requirement. <br />The North Poudre Irrigation Company's current loan of$614,080 has an annual pay $46,459, which <br />includes the 10% reserve requirement. <br /> <br />The Company's financial ratios will remain in the strong category, for operating and debt service <br />coverage ratios, and in the weak category for cash reserves, and annual operating costs per acre- <br />foot. <br /> <br />As security for the loan, the North Poudre Irrigation Company will continue to pledge assessment <br />revenues backed by an assessment covenant and the proj ect itself. <br /> <br />STAFF RECOMMENDATIONS: <br />Staff recommends that the Board approve a loan increase of $121,200 ($120,000 for project costs <br />and $1,200 for the 1 % loan origination fee, in accordance with CWCB Financial Policy No. 16) to <br />the North Poudre Irrigation Company, from the Severance Tax Trust Fund Perpetual Base Account. <br />The additional $121,200 increment of funding would be for 20-years at the present lending rate of <br />3.25%. Security for the loan will be a pledge of assessment revenues backed by assessment <br />covenant and the project itself, in accordance with Policy No.5 <br /> <br />Staff further recommends that final approval of the loan be conditioned upon all standard- <br />contracting provisions of the CWCB. <br /> <br />ACTION TAKEN BY THE CWCB BOARD ON JULY 25.2006 <br />Board approved staff recommendation. <br /> <br />cc: Gary Simpson, President, North Poudre Irrigation Company <br />Ron Slosson, P.E., Fort Collins <br />Amy Stengel, AGO <br /> <br />3 <br />