Castle Pines North Approval Letter

Home Browse Search

Castle Pines North Metropolitan District Agenda Item 29c May 9,2014(Updated May 23,2014) Page 6 of 7 Financial Analysis The District qualifies for a high-income municipal interest rate of 3.0% for a 30-year term. The District will use its cash reserves to fund its required 10%match. Table 3 shows a summary of the financial aspects of the Project. TABLE 3: PROJECT FINANCIAL SUMMARY Total Project Cost(4.88% of Reallocation) $7,100,000 Borrower Match $710,000 Project Loan $6,390,000 Project Loan(Including 1% Service Fee) $6,453,900 Project Annual Loan Payment $329,273 Project Annual Loan Obligation(incl. 10% debt reserve) $362,201 Monthly Cost of Loan per Tap (incl. 10%debt reserve) $10.06 Project Cost per Acre-Foot of Storage (1,005.8 AF) $7,063/AF Contracting: In anticipation of a multi-year and multi-phased Project, CWCB may enter into multiple contracts, under the approved loan limit. This will put the District into repayment on completed portions of the Project and allow CWCB to best utilize its loan funds. CWCB will enter into all contracts no sooner than September 1, 2014. In recognition of the long time or performance for Contracts 2 and 3, interest accrued prior to Project completion shall be paid annually unless otherwise approved by CWCB. CWCB will disburse loan funds at a rate of no greater than 90%of Project Cost,up to the approved loan limit. The breakdown of the contract components are listed in Table 4. TABLE 4: CONTRACTING SUMMARY Time of Project Estimated Contract Performance Cost Contract Amount Project Activity (Not Incl.Service Fee 1 1 Year $795,000 $716,000 Cost of storage Engineering,recreation facilities construction, 2 5 Years $4,558,000 $4,102,000 on-site mitigation,off-site mitigation, mitigation monitoring 3 13 Years $1,747,000 $1,572,000 Off-site mitigation,mitigation monitoring Creditworthiness: The District operates its water activity enterprise as a self-supporting business funded by fees charged for services. The enterprise has no debt. The District's tax funded General Fund currently has $33.5 million in debt. This debt includes $11.4 million of"legacy debt."As a result of a severely depressed real estate market in the mid to late 1980's, the District was unable to generate sufficient tax revenue to stay current on the bonds used to fund the initial community infrastructure improvements. In 1993, the District, its residents, and the bondholders reached an agreement to reorganize the bond debt. This agreement was approved by the U.S. Bankruptcy Court in 1994. In 1994, the District was responsible for the payment of$60 million of this legacy debt. The District's aggressive prepayment of this legacy debt will enable the District to pay off the legacy debtl0 years ahead of schedule in 2017. The general fund debts are not included in Table 6 as the financial review looked at the ability of the water activity enterprise to repay the loan.