C150122 Feasibility Study - Laserfiche WebLink

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I I I I I I I I I I I I I I I I I I I The L TWD raised their water rates in 2002 by approximately 10%. Their projected budget in 2002 indicates they expect increased revenue of $511,188 in 2002 over that in 2001 with an additional increase of $597,274 in 2003. The District is planning to raise their water rates 10% each year for a period of four years starting in 2002. The District will raise water rates an additional amount if necessary to fund the proposed project. This may be a raise in basic water rates or may be an additional charge for "Drought Protection" which will be added to the monthly charges. The 25% share of the cost for the reservoir amounts to $171.75 per water tap. The annual loan repayment will add approximately $3.17 to the monthly charges per water tap. The $171.75 will be the money required during design and construction over a three year period of time. If the increase to fund this portion of the project were spread over the three years, the cost per water tap would be $4.78 per month. ,The average monthly charge per water tap in 2001 was $28.48 which would mean the project would be expected to raise the average monthly bill by 16.8% for three years and 11.1 % during the loan repayment period. Credit Worthiness Based on their 2001 financial statement, included in Appendix J, the L TWD had total long term liabilities of $ 16,615,574 and total equity of $ 37,627,396. They currently have three revenue bond issues (1995, 1999, and 2000) and two loans with the CWR & PDA (1992,1998) with a total remaining amount of $17,208,445 as of D~cember 31, 2001. Bonds will retire in 2014, 2019, and 2020, and loans in 2008. Annual payments on all bonds and loans total approximately $1,500,000. Their latest bond rating dated October 2, 2002 as rated by Moody's is "Baa1". The CWCB will require parity of pledged water revenues with these bonds and loans. Based on Note 5 :of their 2001 financial statement, the entity was in compliance with the 1995 bond requirements and out of compliance with the 1992, and 1998 CWR and PDA loans and the 1999 and 2000 bond requirements. However, this note is in error and the District was not out of compliance with the 1992 and 1998 CWR & PDA loans and the 1999 and 2000 bond requirements. We have included a letter in Appendix J from Watkins & Schommer, Inc. which outlines the revisions in this determination. Alternative Financing The L TWD has considered bonding for this project but rejected this method of financing and opted to pursue financing through the Colorado Water Conservation Board. They could provide funding through a mill levy on property taxes but would prefer not to finance the project in this manner. Dry Creek Reservoir Feasibility Study 25