C150274 Approval Letter

• Contract/PO #: C150274
• Contractor Name: Yuma County Water Authority Public Improvement District
• Contract Type: Loan
• Water District: 0
• County: Yuma
• Loan Projects - Doc Type: Approval Letter

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Agenda Item 26d
Yuma Counry Water Authority Public Improvement District
November 10. 2008 (I~PDATED NOVENBER 20, 2008)
Page 6 of 7
The Republican District, has agreed to lease the water rights from the Yuma County 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 raise the remaining $5.5 million.
CWCB Financial Policy #8 requires all applicarions for water rights purchases to "submit a written
appraisal or opinion of value from a qualified water rights appraiser supporting the purchase price
prior to disbursements". Due to the uniyueness of this pmject, and the fact that no comparable water
rights sales exist, staff recommends the Board waive the Policy requirement of an appraisal and
accept the negotiated pwchase price.
Financial Analysis
Table 1 shows a summary 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 yeaz interest rate of 2.5% is recommended.
The Yuma County PID has requested a 20 yeaz loan, therefore the rate is reduced to 2.25% for a 20
year term (reduction per Financial Policy #7).
Table 1. Financial Summary
PROJECT/LOAN 000,000
$20
Total Water Ri ts Purchase Cost
Contriburion from R ublican District 20- eaz Pr aid Lease ,
$5~~~~
Yuma Coun PID's Obli ation $15,000,000
CWCB Loan A rox. 63% of PID's Obli ation 000
95
CWCB Loan Includin 1% Service Fee $9,5
,
$600,000
CWCB Annual Loan Pa ent
CWCB Loan Obli ation includin 10% debt reserve fundin ) $660,000

Other Debt Bond Issuance $5,500,000

000
$450
Other Debt Annual Pa ent Bond Issuance - Estimated Pa ent) ,
Annual Ad Valorem Tax Needed for Debt Service $1,100,000
Cost of Surface Water Ri ts er AF based on 2,SOOAF of consum tive water) $8,000/AF
Creditwort/~iness: The Yuma County PID will use its ad valorem tax revenues to service a voter-
approved $15,375,000 general obligation debt. The Yuma County PID's assessed property
valuation 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.