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<br />?--........-... ;-........,.., <br /> <br />~ I' <br />BLACK & VEATCH <br /> <br />11900 East Cornell Avenue, Suite 300, Aurora, Colorado 80014 (303) 671-4200 Fax (303) 671-4285 <br />RECEIVED <br /> <br />JAN 1 9 1995 <br /> <br />~(*"a<:Jo. Water <br />'-! ~qli.Qr.t &SIi1di <br /> <br />Fort Lupton, Colorado <br />eWeB Loan Application <br /> <br />B&V Project 25325.100 <br />B& V File A <br />January 16, 1995 <br /> <br />Mr. John Van Sciver <br />Colorado Water Conservation Board <br />1313 Sherman Street, Room 721 <br />Denver, Colorado 80203 <br /> <br />Subject: Financial Feasibility of Fort <br />Lupton Well Project <br /> <br />Dear Mr. Van Sciver: <br /> <br />We have reviewed the City of Fort Lupton's (City's) options and ability <br />to repay the requested $354,000 (75% of the estimated project cost) 1995 <br />Colorado Water Conservation Board (CWCB) loan. Based on this review, it <br />is our opinion the City is generating sufficient water sales revenues to <br />make loan payments through 1996. Starting in 1997, it is anticipated <br />the City will either raise water rates in order to continue repaying <br />this loan with water sales revenues, or use reserves on hand to repay <br />the loan in full. The City will be undertaking a comprehensive <br />financial review of the water utility in late 1996 or early 1997 after <br />all final costs associated with Fort Lupton's surface water project are <br />known and a decision will be made about rate increctses at that time. <br /> <br />Attached is Amendment No.2 to the "Preliminary Engineering Report" for <br />the City's surface water and supply treatment project. This amendment <br />was submitted to the Farmers' Home Administration in March 1994 and <br />includes the latest cash flow analysis done for the City's water <br />enterprise. As shown in Table I, Line 25 of this document, significant <br />surplus revenues are projected to be available to the utility in 1995 <br />and 1996 for capital related expenditures. In addition, as shown in <br />Table 2, Line 15, in excess of $3.5 million is projected to be available <br />at the year end 1997 in the utility's capital fund. A portion of this <br />balance could be used to retire the remaining balance on the requested <br />CWCB loan. <br /> <br />You have indicated that CWCB is concerned that the City has not yet <br />implemented metered rates and that CWCB may like to see the City <br />implement metered-based rates as soon as possible. As you have beqn <br />informed, the City has not yet implemented metered-based rates because <br />