26d

• Board Meeting Date: 11/19/2008
• Description: CF Section - New Project Loans - Yuma County Water Authority Public Improvement District - North Fork Water Rights Purchase
• Board Meetings - Doc Type: Memo

Yuma County Water Authority Public Improvement District Agenda Item 26d
November 10 , 2008
Page 6 of 7

The Republican District , has agreed to lease the w ater r ights from the Yuma Coun ty PID for 20
years for a one - time, upfront lease payment of $5 million. The Yuma County PID is requesting a
CWCB loan of $9.5 million to help fund a portion of the remaining $15 million purchase price . The
Yuma County PID will use the sale of bonds to rai se the remaining $5.5 million .

CWCB Financial Policy #8 requires
appraisal or opinion of value from a qualified water rights appraiser supporting the purchase price
Due to the uniqueness of this project , and the fact that no comparable water
rights sales exist, s taff recommends the Board waive the Policy requirement of an appraisal and
accept the negotiated purchase price.

F inancial Analysis

Table 1 shows a su mmary of the financial aspects of the loan request. Since the loan is in part to
assist the State of Colorado with the Republican River Compact compliance and help keep up to
500 ,000 acres of agricultural land in production , a 30 year interest rate of 2 .5 % is recommended .
The Yuma County PID has requested a 20 year loan , therefore the rate is reduced to 2 .25% for a 2 0
year term ( reduction per Financial Policy #7 ).

Table 1. Financial Summary
PROJECT/LOAN
Total Water Rights Purchase Cost $ 20 ,0 00 ,000
Con tribution from Republican District ( 20 - year Prepaid Lease ) $5,000,000
Yuma County $15,000,000
CWCB Loan (A pprox . 63% of ) $ 9,5 00,000
CWCB Loan (Inc luding 1% Service Fee) $ 9,595 ,000
CWCB Annual Loan Payment $ 6 00 , 0 00
CW CB Loan Obligation (including 10% debt reserve funding) $ 66 0 , 00 0
Other Debt (Bond Issuance ) $5,500,000
Other Debt Annual Payment ( Bond Issuance - E stimated Payment ) $450,000
Annual Ad Valorem Tax Needed for Debt Service $1,100,000
Cost of Surface Water Rights per AF (based on 2,500AF of consumptive water) $8,000/AF

Creditworthiness: The Yuma County PID will use its ad va l or e m tax revenues to service a voter -
approved $15,375,000 general obligation debt. The Yuma County
valuatio n has been estimated to be $300,317,150 . The PID will generate revenue to service both the
CWCB Loan and the bond debt. Since the Yuma County PID was recently created , it has no
financial history or debt .