C153623 Extension Letter

• Contract/PO #: C153623
• Contractor Name: Sanchez Ditch and Reservoir Company
• Contract Type: Loan
• Water District: 24
• County: Costilla
• Loan Projects - Doc Type: Approval Letter

Sanchez Ditch and Reservoir Agenda Item 23c
September 18, 2012 (Updated October 4, 2012)
Page 7 of 8
CWCB Loan Program
Financial Analysis
The Company qualifies for the agricultural interest rate of 1.75% for a 30 -year term. Table 3
provides a financial summary of the loan request.
TABLE 3: LOAN FINANCIAL SUMMARY
CWCB Loan Amount (55% of total Project cost)
$1,117,600
CWCB Loan Amount (including 1% Service Fee)
$1,128,776
CWCB Annual Loan Payment
$56,133
CWCB Annual Loan Obligation (including reserve account)
$61,747
Interest only a ment (est. 2015 — 2020)
$19,754
Number of Shareholders
34
Number of Shares
20,790
Current Annual Assessment (per Share)
$11.50
Annual Cost of Project (per Share)
$2.57
Annual Cost of Project (per Share including reserve account requirement)
$2.83
Creditworthiness:
The Company has two existing loans with the CWCB (C153623 and C153755A). Both loans were
for rehabilitation work on the Sanchez Reservoir outlet and dam. The Company received a one-
year deferment on both loans in July 2011 so it could spend the otherwise obligated loan funds on
the Phase I Assessment & Upgrade study.
In 2009, 2010 and 2011 assessments were set at $10.50 per share. In anticipation of the Project,
assessments were increased to $11.50 per share in 2012. The cost of this Project will ultimately be
an additional $2.83 per share. The Company is concerned that the additional debt service will be a
burden on shareholders and asked the CWCB for assistance in scheduling the debt repayment to
help balance out the debt burden. CWCB staff worked with the Company and suggested
accelerating the payments on the original two loans. Upon substantial completion of the new
Project, the Company will pay interest only for the first five years of repayment on the new loan.
Principal and interest would be paid over the remaining 25 years. The extra payments and new
payoff dates are noted in Table 3.
TABLE 4: CWCB LOAN CONTRACT SUMMARY
Loan
Contract
Number
Contract
Dated
Contract
Amount
Current
Balance
Final
Payment
Due
Annual
Payment
Amount
Additional
Principal
Payments
New Estimated
Final Payment
Date
C153623
8/20/1992
$200,000
$64,431
2017
$115485.57
$5,000
2016
C153755A
9/3/1997
$335,000
$187,644
2023
$19,900.35
$15,000*
2020
Totals
$535,000
$252,075
$31,385.92
*Note: The additional payment on loan CI53755A will begin in 2018 after C153623 is paid off.
By accelerating the repayment this way, the overall debt service per share, which is currently
$1.52 /share, will increase to a maximum of $2.97 /share for six years and will then drop to
$2.57 /share for the remaining term of the new loan. Without accelerating the payments and