C150185 Approval Letter - Laserfiche WebLink

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Mancos Valley Beaver Ditch Company January 17, 2006 (Revised January 31, 2006) Page 2 of 2 Agenda Item 19a Table 2 shows a summary of the financial aspects of the Project. A CWCB Post-Construction Loan of $226,188 would have an annual payment of $14,409 ($10,807 for the annual loan payment and $3,602 for the reserve account during the first three years -see loan conditions below) for the loan terms of 2.50% for 30-years. Table 2. Financial Summary of Project Total Project Cost $904,750 CWCB- Post-construction Loan Amount $226,188 Annual Loan Pa ment Amount $10,807 Annual Loan Obligation (including debt reserve funding) $14,409 Annual Project Cost per acre-foot (based on 1,431 AF after 3 years) $7.55/ac-ft Repayment of the CWCB loan will be accomplished by member assessments in accordance with the Company's Funding Agreement. Financial Ratios for the Company shall remain as shown on the originally approved loan memo (attached) with the exception of an annual operating cost of $8.00 per acre-feet. The Company proposes to assess the members based on the Company's executed Funding Agreement. Collateral: As security for this loan, the Company will pledge its assessment revenues backed by an assessment covenant which includes a security interest in the Company's Funding Agreement and the Project including pipeline, diversion structure No. 505 and all associated access easement rights. This security is in compliance with CWCB Loan Policy #5 (Collateral). Staff .Recommendation Staff recommends an initial loan, not to exceed $913,798 ($904,750 for project costs and $9,048 for the 1% Loan Service Fee) to the Mancos Valley Beaver Ditch Company from the Severance Tax Trust Fund Perpetual Base Account, for the Mancos Valley Beaver Ditch Pipeline Project. The staff further recommends apost-construction loan not to exceed $235,236 ($226,188 for project costs and $9,048 for the 1 % Loan Service Fee) to the Company with terms based on the current agricultural rate (30 years at 2.50% per annum). Security for the loan will be collateral in compliance with CWCB Loan Policy No. 5. Staff further recommends that final approval of the loan be conditioned upon the following: 1. Execution of a second USDA Conservation Program Contract for $354,971. 2. Company's Funding Agreement shall include a "step-up" provision. 3. All standard contracting provisions of the CWCB Loan Program including, a revised Debt Service Reserve Fund Provision that requires two annual loan payments (one annual .payment set aside at the time of first draw of funds and one third of an annual payment set aside at the time of each of the first three annual loan payments. Action Taken by the CWCB on January 25, 2006 The CWCB approved the staff recommendation as written above. Email copy: Oran White, President, Mancos Valley Beaver Ditch Company Raymond Keith, Mancos Conservation District Mike Rich, District Conservationist, EngineeringlTechnical Support, NRCS Cortez Service Center Amy Stengel, AGO Attachment: Project Data Sheet and Board Memo, Agenda Item 4a, Revised September 17, 2004