CT2015-040 Increase Financials

• Contract/PO #: CT2015-040
• Contract/PO #: C150237
• Contractor Name: Pnerose Water District
• Contract Type: Loan
• Loan Projects - Doc Type: Feasibility Study

PENROSE WATER DISTRICT
340 Grant Street — Penrose,CO 81240
that declaration, in 2000, in order to comply with lending requirements of United States
Department of Agriculture-Rural Development (USDA-RD), the District created the Penrose
Water District Water Activity Enterprise, specific for the purpose to receive grants and loans
from that agency.
Since its inception in 1968, the District's raw water supply has depended solely on a raw water
lease from a local irrigation company whose supply is from a single source. The most evident
economic factor and budgetary influence is the District's endeavor to acquire a more secure and
diverse raw water supply. In 2005, and in 2007, the District acquired twO irrigated ranches near
Howard, Colorado, commonly called the Goodwin Ranch and the McEnulty Ranch respectively.
The water rights associated with these ranches are of the Pleasant Valley Ditch. The District filed
for a change-of-use of the water rights from irrigation to municipal purposes and was issued a
decree in April of 2010. The yield from the decree is 330 acre feet.
The purchase of the Goodwin Ranch was paid for with a 3 million dollar, renewable, interest-
only bridge loan, issued by Fremont Bank and assumed by Wells Fargo Bank. The purchase of
the McEnulty Ranch was paid for by way of the District's capital savings. The water was
removed from the McEnulty and the associated real estate was sold to a private party in 2009.
The District still owns the real estate associated with the Goodwin Ranch.
In December of 2010 the District closed on a Colorado Water Conservation Board 30-year,
3.25%, loan for $8,844,570. That loan is issued to finance the purchase of the water rights,
construction of a river diversion and raw water pipeline, and the purchase or construction of
storage. In January of 2011 the District received the first draw from the CWCB loan in the
amount of 1.26 million dollars-an amount equal to 90%of the value of the water rights from the
Goodwin Ranch. That reimbursement, coupled with cash-on-hand, was applied to the principal
of the Wells Fargo Loan at maturity on April 17, 2011. In January of 2011 the Goodwin Ranch
went on the market through Hayden Outdoor Properties. The Property remains on the market as
of July 2012. Proceeds of the sale of the real estate will be retained by the District in order to
replace depletions of cash-on-hand used to pay of the original debt.
In September of 2010, the District reached agreement with Beaver Park Water, Inc. for the
District's purchase of 500 acre feet of storage in Brush Hollow Reservoir—an existing reservoir
located to the northwest of Penrose and owned by that local irrigation company. That purchase
closed in September of 2011 and at a cost of 2.5 million dollars. The storage purchase was
financed by way of the CWCB loan.
The District undertook a study for the location and design of a well field an the north side of the
Arkansas River. A site has been identified and declared by the Board and has been submitted to
the State in accordance with the District's Pleasant Valley Ditch decree. The Board is preparing a
Request for Proposals (RFP)to advertise for engineering to design and manage the construction
of the well field and related pipeline necessary to convey the raw water to storage in Brush
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