CT2016-2452 Approval Letter - Laserfiche WebLink

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St. Vrain and Left Hand Water Conservancy District Agenda Item 24a July 16-17, 2014 Board Meeting(Updated July 18, 2014) Page 4 of 5 Project Funding: The District and Boulder County entered into an IGA in May 2014 describing how each entity will address the repair of the Lake. Both the District and Boulder County are responsible for 50% of the Project cost. Boulder County will oversee and manage the construction and will invoice the District for its cost share. Both the District and Boulder County are eligible for FEMA public assistance and are thus expecting a reimbursement through FEMA covering 75% of Project cost. Additionally, the State of Colorado, through its Public Assistance Program, will pay for 12.5% of the Project cost. The remaining 12.5%of Project cost will be split equally by Boulder County and the District (6.25%each). Both FEMA and State funds are provided on a reimbursement basis, requiring all Project cost to be fronted by Boulder County and the District. Boulder County is funding its portion from cash reserves and the District will provide its portion through this CWCB Emergency Loan. Once all Project funding has been received, the District will be responsible for 6.25% of Project cost, currently estimated to be $562,500. Financial Analysis Table 3 provides a summary of the Project's financial aspects. The first three years of the loan will be assessed a 0%interest rate. The remaining term of the loan will be assessed a blended interest rate of 3.2%with the principal amortized over 27 years (Ownership: 93% High Municipal, 7% Commercial). Staff is recommending an exemption to Financial Policy#11 to allow for 100% funding of eligible Project costs, up to the approved loan amount. TABLE 3: FINANCIAL SUMMARY Without After Reimbursements Reimbursements Total Project Cost $9,000,000 $9,000,000 FEMA Reimbursement (75%) - $6,750,000 State Reimbursement (12.5%) - $1,125,000 Boulder County Contribution (50% of Cost Less Reimbursements) $4,500,000 $562,500 District's Contribution (50% of Cost Less Reimbursements) $4,500,000 $562,500 CWCB Loan Amount $4,500,000 $562,500 CWCB Loan Amount (Including 1% Service Fee) $4,545,000 $607,500 CWCB Annual Loan Payment $253,918 $33,940 CWCB Annual Loan Obligation (1st Ten Years) $279,310 $37,333 Annual Loan Obligation per AF of Augmentation Water (240 AF) _ $1,164/AF $155/AF Existing Augmentation Annual Renewal Fee per AF $63/AF $63/AF Future Augmentation Annual Renewal Fee per AF $815/AF $245/AF Project Cost per Acre-Foot of Storage (600 AF) $15,000/AF $15,000/AF Creditworthiness: The District has no existing debt and owns 271 C-BT units. The C-BT units are not a part of its decreed augmentation plan and are instead annually leased out to other users. The C-BT units are currently unencumbered. The past 3 years the District's water activity enterprise had negative operating ratios due to a cost per AF of augmentation water well below market value. The Board decided to slowly reverse this trend by increasing its fees incrementally instead of making a fee correction in one single year. In 2011 the cost of augmentation water was $55/AF. This was raised to $58/AF in 2012, and $63/AF in 2013 with additional increases in future years. The debt service for this loan will be raised through increasing the District's various augmentation fees including its annual renewal fees. Should these fees fail to provide sufficient income, the District can sell its C-BT units as needed. The District is willing to use its cash reserves to help soften the effect of needed fee increases. By doing so projections indicate the District's operating ratio will exceed 100% by the year 2021 white