C150052 Approval letter

• Contract/PO #: C150052
• Contractor Name: Tunnel Water Company, The
• Contract Type: Loan
• Water District: 3
• County: Larimer
• Bill Number: EIA
• Loan Projects - Doc Type: Approval Letter

Tunnel Water co. Agenda Item 11.
September 25-27,2000. (Updated September 27,2000)

Recommendation
Staff recommends that the CWCS find that the Tunnel Water Company is eligible for a loan
from the Emergency Infrastructure Repair Account because: "the project is necessary to avoid
unreasonable risk of injury or damage to human health or well-being or to property or crops,
and because the emergency condition is not the result of negligence in the operation or
maintenance of the infrastructure."

Staff recommends an Emergency Loan not to exceed $1,600,000 to the Tunnel Water
Company for up to 90% 01 the costs to rehabilitate the laramie-Poudre Tunnel. The
recommended term of the loan is 30 years and the recommended biended lending rate is 4.5%.
Security for the loan will be a pledge of assessment revenues backed by assessment covenant
and Company property at least equai in value to the loan amount.

Staff further recommends that final approval of the loan be conditioned upon acceptance of the
project and the associated financial obligations by a vote of the shareholders of the Company
and the boards of the two major shareholders, completion of the feasibility study by November
30, 2000, and all standard contracting provisions of the CWCB.

Action Taken bv the CWCS September 25. 2000
The CWCB approved the Staff recommendation with the following additions and revisions:
1. The approved loan terms will be 30 years at 4.5%, or 20 years at 4.25%, or 10 years at 4%,
at the option of the borrower.
2. The last paragraph of the Staff recommendation is revised to read as follows:
Staff, further recon1rner~s;Jhat,ffnarapRroval.of the',loan. be conditioned'upon acceptance of
the project' an.d16eas~o~i~tedjfihancial:obligations;bya, vote of the shareholders of the
Company, GnEltfle fadil~.a~i6i il1d'w..o RiCljor EiliaronoIClors,:completion ofthe feasibility study
by Noyember 30; 2000f;~6d;all'stanCfardcontractingiprovisions of the CWCB.

Other Discussion September 25. 2000
1. The CWCB confirmed that approving this emergency loan did not obligate the CWCS to
approve an additional loan for Phases 2 and 3 of the project.
2. The CWCB approved this loan at 90% of the project cost; however, there was discussion
that this percentage should have been less, since 1/3 of the shares are owned by
municipalities. (The percentage for municipalities is 75% of the project cost.)

cc: Fred Walker, President, Tunnel Water Co.
Don Deere, P.E., RMC
Linda Bassi, AGO

Attachment

C:IWP51IProj-NewITunneIWaterC0900memo
L:lboardmemlsepOOl11

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