11a

• Board Meeting Date: 1/22/2008
• Description: CF Section – Construction Fund and Severance Tax Trust Fund Perpetual Base Account – New Loans - Pagosa Area Water & Sanitation District - Dry Gulch Reservoir Project Land Purchase
• Board Meetings - Doc Type: Memo

Pagosa Area Water & Sanitation Dishict
7anuaiy 14, 2007
Page 4 of 6
.Agenda Item l la
2040 demands would have to begin upon completion of the initial reservoir. The plan is to construct as large
a reservoir as justified by future demand estimates and financing capability. A 2005 Repoli indicates that
35,000 AF of storage will be needed to meet the demands and provide one year drought safety margin
through 2100.
The first phase of environmental (endangered plants and species) and archeological studies was completed in
the summer of 2007 with no fatal flaws found which would prohibit the construction of the Reser~~oir. The
next phase of studies will begin in early 2008 and will include evaluation of specific capacity needs, pumping
plant design on the San Juan River to fill the Reservoir, 404 Permitting, environmental work in the river
channel, and evaluation of bypass flows needed. The larger the bypass and/or demand, the larger the pump
size because a large bypass limits the periods of time that pumping can occur. In addition, the larger the
reservoir, the smaller the pumping plant because carryover storage is greater and complete refills are less
frequent.
Selected Altern atii~e
Dry Gulch is the best site available to the District to construct a reservoir to meet future water needs.
Land Purchase Projected Costs
Weber Property $10,320,000
Laverty Property 2,020,000
Total $12,340,000
Closing on Weber property was January 3, 2008. The closing was completed in part with a bridge loan at
4.5% from Wells Fargo and the use of the $1 million grant to the SJWCD. The Laverty property closing is
expected to occur in late 2008. Technical studies and permitting are estimated to occur from 2008 until 2017.
The period from 2018 to 2019 will be used for construction financing, elections if necessary, bidding,
contractor selection, and beginning construction. An appraisal for the Weber parcel has been completed by
Walters & Mullins Inc., of Alamosa, dated August 22, 2007, valued the property at $10,525,000.
Financial Analysis
Table 1 shows a summary of the financial aspects of the loan request. The District qualifies for a Municipal
Middle Income Interest Rate of 3.50%for 30-years.
Table 1. Financial Summary
PROJECT/LOAN
Land Ac uisition Cost $12,340,000
CWCB Loan (90% of Ac uisition Costs) $11,106,000
CWCB Loan (Inc. 1% Service Fee) $11,217,060
CWCB Annual Loan Pa ment $609,350
CWCB Loan Obli ation (includin 10% debt reserve fundin) $670,290
Monthly Per Tap Cost of CWCB Loan (6,950 taps) $8.00/mo.
Land Purchase price per acre (670 acres) $14,300/acre
Creditworthiness: The District operates its Enterprise (water and wastewater) fund as self supporting.
Revenues received from user fees and other general fund sources are sufficient to cover the day-to-day
operating expenses of these funds, as well as assist in the funding of capital improvements. The District is
required to supply revenues in amounts that would exceed expenses by at least 125% of the average annual