CT2015-152 Application

• Contract/PO #: CT2015-152
• Contract/PO #: CMS 77047
• Contractor Name: Cortez, City of
• Contract Type: Loan
• County: Montezuma
• Loan Projects - Doc Type: Application

CITY MANAGER&COUNCIL PW-14-152
WATER METER READING PROCESS
July 8,2014 Page 3 of 3
The Water Fund is estimated to start fiscal year 2015 with just over $2.2M. This is a healthy
position for this enterprise and it should be kept in this position. Capital plans for the 2015
budget come in at $580,000 without this metering project. Replacements of all water
infrastructures in Paradise Village and treatment plant work account for these expenditures.
In order to maintain this fiscal health, a cash/loan/grant mix could finance this project with
minimal impact on the fund balance. There are several mechanisms to make this approach
possible.
• DOLA — Department of Local Affairs — (Energy Impact Assistance Grant) Grants and
loans are available. Grants are tiered based on amounts. We would be pursuing a Tier 2
which is over$200,000. Their loan program has an interest rate of not less than 5%.
• CWCB — Colorado Water Control Board — (Water Efficiency Grant) Grants and loans
available. Grant maximum is $50,000. Loan program that is specific to projects like this
are favorable with a ten year rate of 2.25%.
• Others — CDBG — USDA would require further research and would take the longest to
complete.
For Example:
Using the CWCB model without any DOLA grant funds on a$1,000,000 project-
Term: 10 years @ 2.25% with a 1% loan fee
Loan - $707,000
Interest- $ 83,177
Grant- $ 50,000
Cash- $250,000
Project costs $1,090,177
Annual payment $ 79,018
This example would calculate out to a return on investment of 6.45 years based on the savings
and increased revenues stated previously. This plan would provide for continued growth of the
water fund balance, cover loan payments and increase the accuracy of our revenue stream.
j:\pwadmin\philip\council memos\meter reading 7-8-14.docx
III
Phone: [phone] www.cityofcortez.com Fax: [phone]