PROJ02130

• Contract/PO #: C150167
• Contractor Name: FL Gill H20 LLC
• Contract Type: Loan
• Water District: 0
• Loan Projects - Doc Type: Approval Letter

FL Gill H20 LLC
March 16-17,2004

Agenda Item 25d
(Updated March 18,2004)

Selected Alternative 3 consists of the following:

. Construct 4 new recharge ponds, including excavation and flow measurement/recording
equipment.

. Drill a 7.5 cfs recharge well within 100 feet of the South Platte River. Permit one existing
irrigation well for augmentation use.

. Construct a 15-inch diameter pipeline between the recharge well and a private irrigation
lateral owned by FGH LLC. This pipeline will be 3,500 feet in length.

. Purchase one share of Jackson Lake Reservoir water (net yield 6 acre-feet, $20,000.)

. Install measuring devices on all features of the project.

The implementation schedule calls for completion of financing arrangements and final design in
Spring 2004. Construction would be completed in spring 2005.

financial Analvsis
The total estimated cost of the project is $127,500 (including engineering costs), and water is
used for agricultural purposes. Staff is recommending a Small Project loan in maximum amount
of $114,750 (90% of the total project costs.) The borrowers are requesting a 20-year loan at
2.25%, which is a standard CWCB agricultural loan rate.

Table 1 is a summary of the financial aspects of the project with a $114,750 CWCB Loan. The
annual payment would be $7,907 (including the 10% reserve requirement) at the loan terms of
2.25% for 20 years. This represents $7.38 per acre-foot, based on expected annual well
diversions of 1,072 acre-feet. The Company's cost share will come from a one-time special
assessment.

Table 1. financial Summary

Project Cost
Number of members
CWCB Loan Amount
CWCB Loan Payment (includes 10% reserve)
Irriqated acreaqe
Assessment per irrigated acre with CWCB loan
Assessment per irrigated acre with CWCS loan and $3,152 O&M costs
Annual loan cost per acre-foot (averaqe well diversions: 1,072 ac-ft.)

$127,500
3
$114,750
$7,907
910
$8.70
$12.15
$7.38

Credit worthiness: The FGH LLC is a new company and has no debt or history of income and
expenses. The Company has collected initial capital of $6,000 from its members. These funds,
as well as future assessments and CWCS loan proceeds will be used to construct the project
and pay O&M costs. (Note: Members of the GGH LLC previously paid GASP for augmentation
of their wells. These GASP dues can now be used to pay assessments to the FGH LLC.) Table
2 shows the Financial Ratios for the FGH LLC assuming the project is built. With the exception
of Cash Reserves, all ratios are in the average category with the $114,750 CWCS loan in
place.

3