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C150269 Approval letter
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C150269 Approval letter
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Last modified
7/12/2011 10:20:30 AM
Creation date
8/11/2008 7:58:30 AM
Metadata
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Template:
Loan Projects
Contract/PO #
C150269
Contractor Name
San Luis Valley Water Conservancy District
Contract Type
Loan
Water District
0
County
Alamosa
Loan Projects - Doc Type
Approval Letter
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<br />San Luis Valley Water Conservancy District <br />July 15,2008 <br />Page 4 of 6 . <br /> <br />Agenda Item 16c <br /> <br />$80,000 of earnest money is required and will be applied as a credit to the total price at closing. The <br />District will pay the earnest money from their cash reserve funds. The resulting loan request is for <br />$720,000. <br /> <br />Upon execution ofthe purchase, the District will need a place to store the new water rights. <br />Currently, the District leases storage space in three reservoirs: Rio Grande, Santa Maria, and <br />Continental. It is in the process of negotiating additional storage space for the newly acquired <br />water. <br /> <br />Schedule - The water rights acquisition is expected to take place within 45 -100 days of the CWCB <br />July 2008 Board meeting. <br /> <br />Appraisal- In accordance with the CWCB Financial Policy #8 (Purchase of Water Rights), a <br />written appraisal or opinion of value from a qualified water rights appraiser supporting the purchase <br />price has been submitted. An appraisal of the one-third interest in the Pine River Weminuche Pass <br />Ditch was completed by attorney Kenneth J. Burke of Denver in January 2006. Per Mr. Burke, the <br />appraised market value of the one-third interest in the Ditch was $1,700,000. This appraisal was <br />provided by the owner/seller ofthe water rights. <br /> <br />The District also had an appraisal for similar water rights in the Ditch. The second appraisal was <br />completed by Thomas Williamsen, with Helton & Williamsen, P.C., a water resources consulting <br />engineering company in Englewood, Colorado. The appraisal was done in November of 2006 to <br />estimate the value of~ interest in the Ditch. Mr. Williamsen's estimate of the value for the ~ <br />interest was $996,800; therefore, applying a proportionate value to the one-third interest suggests an <br />estimated value of$664,533. <br /> <br />The actual purchase price for the one-third interest ($800,000) seems reasonable given that it falls <br />between the two price opinions. The District acquired 'l4 interest in the Ditch in 1984 for $353,000 <br />and another 'l4 interest in 1994 for $393,000, which equates to approximately $3,000/AF. Based on <br />the expected yield of 141 AF for this additional one-third interest, the total cost comes out to <br />$5,674/AF. <br /> <br />Financial Analysis <br /> <br />Table 1 shows a summary ofthe fmancial aspects of the loan request. Based on the median <br />household income in the District's service area, the interest rate will be the municipal low income <br />rate of 3.5% for a 30 year term. <br /> <br />Table 1. Financial Summary <br /> <br />PROJECT/LOAN <br />Total Project Cost $800,000 <br />Earnest Money paid by District $80,000 <br />CWCB Loan $720,000 <br />CWCB Loan (Including 1 % Service Fee) $727,200 <br />CWCB Annual Loan Payment $39,500 <br />CWCB Loan Obligation (including 10% debt reserve funding) $43,500 <br />Annual Proj ect Cost per AF based on 141 AF expected yield $280 <br />
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