C150163 Approval Letter

• Contract/PO #: C150163
• Contractor Name: New Cache La Poudre Irrigation Company
• Contract Type: Loan
• Water District: 3
• County: Weld
• Bill Number: 04-1221
• Loan Projects - Doc Type: Approval Letter

The project has been completed at a final cost of $8,120,469. To -date, CWCB has
released $6,090,351 in loan funds to NCLPIC, which is 75% of the total construction cost.
Given the cost savings associated with not constructing Drury Reservoir, NCLPIC is requesting
CWCB release the full $7,200,000 in loan funds authorized by CWCB at the November 2003
Board Meeting. This would require that the cost participation from CWCB be changed from
75% to 89 %, which would release the remaining $1,109,648 in loan funds to NCLPIC. The
funds would be released over the next 10 -years to NCLPIC to cover the Company's land
payments to Cornish Plains Livestock, LLP for the purchase of the 1,300 acres to construct the
reservoirs.
FINANCIAL ANAYLSIS
The proposed CWCB cost participation change from 75% to 89% does not change the
total loan authorization of $7,200,000 approved by CWCB at the November 2003 Board
Meeting. Therefore, NCLPIC financial ratios presented at November of 2003 remain
unchanged and are presented again within Table 2 for your review:
Table 2. Financial Ratios
Financial Ratio
Without
With completed
the project
project
Aver. 2001 -02
Future Year- 2008+
Operating Ratio (revenue /expense)
weak: less than 100%
121%
228%
average: 100% - 120%
(strong)
(strong)
strong: greater than 120%
Debt Service Coverage Ratio
(revenues- expenses) /debt service
286%
102%
weak: less than 100%
(strong)
(aver.)
average: 100% - 125%
strong: greater than 125%
Cash Reserves to Current Expense
weak: less than 50%
18%
11%
average: 50% - 100%
(weak)
(weak)
strong: greater than 100%
Annual Operating Cost per Acre -Ft. (37,500 AF)
$11.33
$22.64
weak: greater than $20
(aver.)
(weak)
existing
average: $10 - $20
strong: less than $10
As security for the loan, the NCLPIC will continue to pledge assessment revenues backed
by an assessment covenant and the project itself. The CWCB's security interest in the project
itself is second to the $1,409,649 loan with the Cornish Plains Livestock, LLLP. In view of the
fact that CWCB will have first position in the pledge of assessment revenues, and considering
the overall value of the project as based on its cost of $9,542,000, staff finds the project to be in
compliance with CWCB Loan Policy #5 (Collateral). Additionally, if NCLPIC should choose to
sell any portion of the 1,300 acres purchased under the Cornish Plains Livestock Land Purchase
Agreement, the proceeds from that sale shall be used to pay down NCLPIC Loan Contract
C150163 with CWCB.
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