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Consolidated Home Supply Ditch ft Reservoir Company Agenda Item 7a
<br /> September 11-12,2014 Board Meeting(Updated September 12,2014)
<br /> Page 3 of 4
<br /> TABLE 1: UPDATED PROJECT COST SUMMARY
<br /> Task* Original Updated
<br /> Project Cost Project Cost
<br /> Phase One- Dam Repairs $800,000 $1,100,000
<br /> Phase Two-Masonry Repairs $800,000 $500,000
<br /> Flood Mitigation - Spillway - $737,000
<br /> Flood Mitigation - Headgates - $438,000
<br /> Total $1,600,000 $2,775,000
<br /> *Tasks include all associate cost including engineering, construction, construction
<br /> management,and contingencies.
<br /> Schedule: Phase 1 is 75% complete, and is expected to be completed in the fall of 2014. Phase 2 is
<br /> scheduled to be completed in the winter of 2014/15 concurrent with the flood mitigation measures.
<br /> Funding: The Company is working with both FEMA and the City of Loveland to develop Project grant
<br /> and cost-share agreements. FEMA approved the Project Worksheet for Phase 1 on January 17, 2014 and
<br /> will provide reimbursement at a rate of 75% of project cost. FEMA will not fund Phase 2 because it was
<br /> classified as deferred maintenance. FEMA has agreed in principle to fund the additional flood
<br /> mitigation measures using funds under Section 406 of the Stafford Act, which are available for hazard
<br /> mitigation. This 406 Flood Mitigation Project Worksheet has not yet been finalized.
<br /> The Company has an agreement with the City dating back to 1895 committing the City to contribute
<br /> 11.36% of all repair cost to the Big Dam. However, given the magnitude of the repair work and the
<br /> importance of the Big Dam to the City's water supply, the Company entered into an agreement with
<br /> the City on January 18, 2014 setting the City's cost share to be 50% of Phase 1 cost less FEMA's
<br /> reimbursement. The City has also agreed to cover 50% of Phase 2 and the additional flood mitigation
<br /> work costs, less FEMA's reimbursement. This cost-share agreement will be finalized in September 2014.
<br /> The City is providing funds based off of monthly invoices, and are assuming no FEMA funds will be
<br /> received. Therefore, the Company will not need to use CWCB funds as bridge financing on the City
<br /> funds, or the FEMA funds associated with the City's cost share. This allows the Company's loan increase
<br /> request to only be $240,000. When FEMA funds have been received, the Company will reimburse CWCB
<br /> and the City at a rate commensurate with the amount of funding received from each entity.
<br /> Financial Analysis
<br /> Table 2 provides a summary of the Project's financial aspects. The first three years of the loan will be
<br /> assessed a 0% interest rate. The remaining term of the loan will be assessed a blended interest rate of
<br /> 1.95%with the principal amortized over 27 years (Ownership: 76%Agriculture, 23%Mid Municipal, <1%
<br /> High Municipal, <1%Commercial). Staff is recommending an exemption to Financial Policy#11 to allow
<br /> for 100% funding of eligible Project cost.
<br /> TABLE 2: FINANCIAL SUMMARY
<br /> Original Approval New Request
<br /> Total Project Cost $1,600,000 $2,775,000
<br /> CWCB Loan Amount $1,600,000 $1,840,000
<br /> CWCB Loan Amount (Including 1% Service Fee) $1,616,000 $1,858,400
<br /> CWCB Annual Loan Payment $77,553 $89,186
<br /> CWCB Loan Obligation (Including 10% Reserve) $85,308 $98,104
<br /> Number of Shares 2001 2001
<br /> Annual Cost Per Share for Loan $43/share $49/share
<br /> Current Assessment per Share $163/share
<br /> Future Assessment per Share $210/share $230/share
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