15d

• Board Meeting Date: 7/11/2007
• Description: CF Section - New Project Loans - Town of Hillrose - Water Rights Purchase/Well Augmentation
• Board Meetings - Doc Type: Memo

Town of Hillrose
July 11-12, 2007

Agenda Item 15d

Table 1 is a summary of the financial aspects of the project. A CWCB loan of $49,500 would
have an annual payment of $2,778 (including the 10% reserve requirement) at the loan terms of
3.00% for 30 years. The annual loan cost for the project will be $ 287 per acre foot of dry-year
pumping allocation produced from the purchased shares. The Town will add an new surcharge
of $1.75 to pay the proposed CWCB loan.

Table 1. Financial Summary

Project Cost $55,000
Number of Residents 270
Number of Water Taps 132
CWCB Loan Amount (30 years) $49,500
CWCB Loan Payment (includes 10% reserve) - Begin 2008 $2,778
Current Monthly Water Rate (Average) (incl. DWRF loan) $55.40
Future Monthly Water Rate $57.15
Monthly Per Tap Cost of CWCB Loan $1.75
Annual Loan Cost per Acre-Foot (min. of 9.675 AF pump allocation) $287

Creditworthiness: In July 2004, the Town, through its Water Enterprise Fund, obtained a
CWCB loan for $69,311 to purchase surface water rights to use for well augmentation, with an
annual payment of $3,768.53 through 2035. Also, the Town recently closed on a $995,097
loan (0% interest) with the Colorado Water Resources and Development Authority, with an
annual payment of $33,170 through 2037. In addition, the Town will be taking out a $44,000
loan with USDA Rural Development (4.375% for 40 years) with an annual payment of $2,503.
CWCB will require parity with the CWRPDA and USDA-RD loans. The Town has obtained
temporary financing for $48,000 for the proposed water rights purchase from the Bank of
Colorado, which will be paid off with the CWCB loan.

Table 2 shows the financial ratios for the Town, and indicates average ability overall to repay
the $49,500 CWCB loan, with the proposed $1.75 increase in monthly water rate for the new
loan.

Current and proposed monthly water rates are:
Base User Rate
Existing CWCB Loan
DWRF Loan
Proposed CWCB Loan
TOTAL

$30.00
2.55
22.85
1.75
$57.15

Table 2. Financial Ratios

Financial Ratio Without With project
the project Future Year
(Aver. 2005-06) 2008+
Operating Ratio (revenue/expense)
weak: less than 100% 169% 183%
average: 100% - 120% (strong) (strong)
strong: greater than 120%
(56K/33K) (94K/51.5K)

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