C150109 Feasibility Study

• Contract/PO #: C150109
• Contractor Name: Larimer and Weld Irrigation Company, The
• Contract Type: Loan
• Water District: 2
• County: Weld
• Bill Number: MC3
• Loan Projects - Doc Type: Feasibility Study

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FINANCIAL PLAN

The Larimer & Weld Irrigation Company proposes to apply for a $1,000,000 from the Colorado
Water Conservation Board (CWCB) for 30 years at 2.75 % interest. The remainder of the project
cost ($286,612) and the loan payments would be paid by an increase in assessments on the shares
of stock.

Revenue for operations and payment of loans is derived from assessments on 1,419 shares of
outstanding stock. Assessments are presented to stockholders and approved at the annual
stockholders meeting held in January of each year. The 2001 assessment was $150.00 per share
and thl~ 2002 assessment was raised to $215 per share in anticipation of the proposed project.

The financial condition of the company is solid at the present time. The company has no debt and
no oth'er obligations other than those listed in the financial statement found in Appendix D. For
fiscal 2001, the Company had total operating revenues of $638,792.91; operational expenses of
$455,232.54; with an operating balance of $183,560.37. The Company used the balance plus
$100,000 from a certificate of deposit to construct the two check structures in 2001 as indicated
in Table 1. This left a remaining balance of $20,634.37 at the end of 2001.

The Company assessments have been rising over the past few years, partly in anticipation of the
repairs being made to the system. The assessments over the past five years are as follows.

YEAR
2002
2001
2000
1999
1998

ASSESSMENTS
$ 215
$ 150
$ 150
$ 100
$ 100

Table 6 shows the cash flow and annual financial schedule for the Company's operations which
includes the proposed $1,000,000 CWCB loan at 2.75 % interest over a 30-year repayment period.

The analysis in Table 6, Column (8), includes payment of $4,961 to a Project Reserve Fund over
a ten year period to provide for one yearly payment in reserve. This payment will be placed in
a "certificate of deposit" and we have assumed a rate of return of 3 % interest on the certificate
of deposit which is included in column (9) as income.

Funds required by the Company during construction are included in column (6) and the yearly
payme:nt to the CWCB, starting in 2003, is shown in Column (7). The total income and expenses
are indicated in Columns (9) and (10) with the remaining amount or income minus expenses for
each year shown in Column (11). The Cash Balance, Column (12), is the sum of column (11)
for any year plus the Cash Balance from the previous year. The assessment levels were set to
maintain a cash reserve of approximately $40,000 to handle variations in the Company's normal

Larimer & Weld Feasibility Study

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