C150223 Feasibility Study

• Contract/PO #: C150223
• Contractor Name: Keenesburg, Town of
• Contract Type: Loan
• Water District: 2
• County: Weld
• Loan Projects - Doc Type: Feasibility Study

need to raise the rates should the tap fees not cover the annual debt service.
The Town has been informed that this stipulation will be part of the loan
agreement.
Appendix F Shows the 30-Year Financial Projection used for this analysis and for
each of the loan scenarios. The indicated population, water use and number of
taps are based on a 4% growth, which is consistent with the Town's
Comprehensive Plan. Census data shows that the Town experienced 5% growth
from 1990 to 2000.
The "Capital Costs" section of this spreadsheet shows the costs being spent over
a two-year period. The same costs as were identified in the proposed capital
improvement table above can be found in this section of the spreadsheet. The
cost of the water purchase is shown at $1,116,000 and the real cost will be
$1,018,080, which includes the one percent loan origination fee.
The next line item is the actual cost of purchasing the well and constructing the
replacement well and the pipeline to bring the water to the Town's water tank.
Again this is spread over two years to allow design to start in late 2006 with
construction starting in early 2007.
In the past, the Town has experienced interest income of approximately $10,000
to $18,000 and projected $28,000 for 2005. Interest income has been shown in
the financial projection and is based on a 2% return of the previous year's water
fund balance.
Loan funding includes first obtaining a loan for $1,018,080 which includes the
loan origination fee of $10,080, for purchase of the water rights. Next the Town
water fund contribution will be $1,057,400 and will be expended over a two year
period. The $196,000 includes the $75,000 of engineering, legal and
administrative expense that will be expended in 2006 along with a downpayment
for the water purchase of 112,000. In 2007, a matching Energy Impact Grant is
shown at $500,000 along with the Town matching funds of $608,00 being used to
complete the well and pipeline construction.
The next section of the spreadsheet is the "Cash Flow Calculations". This
section is important to demonstrate how the loan proceeds will be funded and to
monitor the water fund balance to assure that reserves are maintained to cover
any emergencies that may occur, such a the need to replace an existing well.
The cash flow calculation, shown at the bottom of this spreadsheet, starts with
annual water fund revenue of $210,200. This figure is obtained from the 2006
budget and is modified slightly. To obtain this value, the water tap fees and State
Funds must be subtracted from the $535,958 total indicated. The water sales in
Feasibility Study - Keenesburg, CO
1 /23/2009 11