Memorandum Agenda Item 10b 01/27,28/1999

• Board Meeting Date: 1/27/1999
• Description: Board Meeting - Water Project Construction Loan Project General Financial Matters Town of Erie Request for Parity
• Board Meetings - Doc Type: Memo

STATE OF COLORADO
` Colorado Water Conservation Board
Department of Natural Resources
721 Centennial Building
e
1313 Sherman Street
Denver,Colorado 80203
Phone: [phone]
FAX: [phone] Bill Owens
Governor
Greg E.Watcher
Executive Director,DNR
Peter H.Evans
Acting Director,CWCB
MEMORANDUM
TO: Colorado Water Conservation Board Members
FROM: Bill Stanton,P.E.,Chief,Project Planning and Construction Section
Bill Green,P.E.,Manager of Planning- 6
DATE: January 25, 1999
`` //��
SUBJECT: Agenda Item 10b.,January 27-28, 1999 Board Meeting—
Water Project Construction Loan Program—
General and Financial Matters - Town of Erie— Request for Parity
• Introduction
The Town of Erie has requested that the CWCB consent to parity status for the Town's 1998
water revenue bonds (Water Enterprise Revenue Refunding and Improvement Bonds, Series
1998). (See attachment for background on the CWCB parity debt policy). The CWCB's lien on
the Town's water revenues stems from a 1994 Construction Fund loan. Staff has reviewed the
Town's financial condition and concluded that the Town does not meet the parity test that the
Board applies to such requests. The Town is requesting the CWCB to make an exception to its
parity test and consent to parity status for the 1998 Bonds.
Background
The Town of Erie and the Erie Water Department ("Town") entered into a loan contract with the
CWCB in March 1994 for$1,544,000 to finance the costs of the Southern Water Supply Project
(SWSP) of the Northern Water Colorado Conservancy District. The Town pledged revenues
from water charges and fees to repay the loan. Additionally, the Town conveyed a security
interest to the CWCB in an Allotment Contract with the SWSP Activity Enterprise for capacity
in the Carter Lake to Broomfield segment of the SWSP pipeline.
The Project was completed in June 1996, and the current loan balance is approximately
$1,492,000. The CWCB and the Town amended the contract on December 19, 1997 to
acknowledge the Town's issuance of the Water Enterprise Bonds, Series 1997B ("1997 Bonds")
and the CWCB's consent to parity status for the 1997 Bonds.
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