CT2016-2001 Approval Letter

• Contract/PO #: CT2016-2001
• Contractor Name: Tunnel Water Company
• Contract Type: Loan
• Loan Projects - Doc Type: Approval Letter

Tunnel Water Company Agenda Item 22c
September 15-17, 2015 Board Meeting(Updated September 18, 2015)
Page 4 of 4
Financial Analysis
The Company qualifies for a blended interest rate of 2.55% for a 30-year term (Ownership: 24%
High Municipal). Table 3 provides a summary
20% Low Municipal, 24%Mid Municipal, 32% g p ry
of the Project's financial aspects.
TABLE 3: FINANCIAL SUMMARY
Total Project Cost $1,225,000
Borrowers Contribution (10%) $125,000
CWCB Loan Amount (90%) $1,100,000
CWCB Loan Amount (Including 1% Service Fee) $1,111,000
CWCB Annual Loan Payment $53,435
CWCB Annual Loan Obligation (15t Ten Years) $58,779
Number of Shares 450
Annual Loan Obligation per Share $131/share
Current Assessment per Share $947/share
Future Assessment per Share $1,078/share
Creditworthiness: The Company has $2,579,923 in existing debt, made up of two CWCB loans as
summarized in Table 4. Both loans are in good standing.
TABLE 4: EXISTING DEBT
Lender Original Current Annual Maturity Collateral
Balance Balance Payment Date
CWCB (C150052) $1,570,214 $1,188,656 $98,226 2032 Water rights available to the
Laramie River System of the
CWCB (C150065) $1,847,932 $1,391,268 $112,799 2032 Tunnel Water Company. Easement
for the Laramie-Poudre Tunnel.
TABLE 5: FINANCIAL RATIOS
Financial Ratio Past 2 Years Future
w/Project
Operating Ratio (revenues/expenses) 130% 125%
weak: <100% - average: 100% - 120% - strong: >120% (Strong) (Strong)
$426K/$328K $485K/$387K
Debt Service Coverage Ratio 146% 136%
(revenues-expenses)/debt service (Strong) (Strong)
weak: <100% - average: 100% - 120%I- strong: >120'. ($426K-$117K) ($485K-$117K)
$211 K $270K
Cash Reserves to Current Expenses 51% 11%
weak: <50% - average: 50% - 100%I- strong: >100%l (Average) (Weak)
$167K/$328K $42K/$387K
Annual Operating Cost per Acre-Foot (6,875 AF) $48 $56
(weak: >$20 - average: $10 - $20 - strong: <$10 (Weak) (Weak)$328K/6,875 AF $387K/6,875 AF
Collateral: Security for this loan will be a pledge of the Company's assessment revenues backed by an
assessment covenant, and the Project itself (west and east portal structures). This is in compliance
with the CWCB Financial Policy#5 (Collateral).
cc: Dennis Harmon, General Manager, The Tunnel Water Company
Susan Schneider/Jennifer Mete, Colorado Attorney General's Office
Attachment: Water Project Loan Program - Project Data Sheet