C150342 Increase Approval Letter

• Contract/PO #: CT2015-012
• Contract/PO #: C150342
• Contractor Name: Sanchez Ditch and Reservoir Company
• Contract Type: Loan
• Loan Projects - Doc Type: Approval Letter

O$R COLORADO 1313 Sherman Street John Hickenlooper, Governor
Denver,Co 80203
1 Colorado Water Mike King, DNR Executive Director
CO�r Conservation Board P [phone]
F(303)866-4474 James Eklund,CWCB Director
TO: Colorado Water Conservation Board Members
FROM: Anna Mauss, P.E., Project Manager
Kirk Russell, P.E., Finance Section Chief '`L
DATE: July 16 - 17, 2014 Board Meeting (Updated July 18, 2014)
AGENDA ITEM: 25a. Change to Existing Loan
Sanchez Ditch and Reservoir Company - Sanchez Reservoir Outlet Rehabilitation
Project
Introduction
In September of 2012, the Sanchez Ditch and Reservoir Company (Company) received approval for a
$914,400 WSRA grant and $1,117,600 CWCB loan to finance the Sanchez Reservoir Outlet Rehabilitation
Project (Project). The purpose of the Project was to make safety and operational improvements to the
outlet works at Sanchez Reservoir (Reservoir). The total Project cost was originally estimated to be
$2,032,000. In May of 2014, the Company bid the Project and the bids came in significantly higher
than the original Project esimate. In order to continue with the Project, the Company is requesting a
$250,000 loan increase from the CWCB. This increase will cost more per share than originally approved
by the shareholders. The Company is concerned that raising assessments again will cause a hardship
for its shareholders as the Project is located in one of the lowest income communities in Colorado. For
this reason, the Company is also requesting the loan terms be extended from 30 years to 40 years. This
will keep annual assessments close to the amount anticipated when shareholders originally approved an
increase for the Project. See attached Project Data Sheet for a location map and a Project summary.
Staff Recommendation (Board approved staff recommendation on July 17, 2014)
Staff recommends the Board approve a loan increase, from the Construction Fund, not to exceed
$252,500 ($250,000 for Project costs and $2,500 for the 1% Loan Service Fee) for a total loan not to
exceed $1,381,276 ($1,367,600 for Project cost and $13,676 for the 1% Loan Service Fee) to the
Sanchez Ditch And Reservoir Company for the Sanchez Reservoir Outlet Rehabilitation Project. The
loan terms shall be changed to 40 years at an adjusted agricultural interest rate of 2.0% per annum.
Security for the loan shall be as originally approved and is in compliance with CWCB Financial Policy
#5.
Interstate Compact Compliance • Watershed Protection • Flood Planning Et Mitigation • Stream &Lake Protection
Water Project Loans Et Grants •Water Modeling • Conservation a Drought Planning •Water Supply Planning