CT2018-839 Loan Approval Letter

• Contract/PO #: CT2018-839
• Contractor Name: San Juan Water Conservancy District
• Contract Type: Loan
• Loan Projects - Doc Type: Approval Letter

San Juan Water Conservancy District Agenda Item 27b
May 17-18, 2017 Board Meeting(Updated May 19, 2017)
Page 5 of 5
Financial Analysis
Table 3 provides a summary of the Project's financial aspects. The District qualifies for the low-income
municipal interest rate of 2.55%for a 30•year term.
TABLE 3: FINANCIAL SUMMARY
Total Project Cost $2,000,000
CWCB Loan Amount $1,980,198
CWCB Loan Amount (Including 1%Service Fee) $2,000,000
CWCB Annual Loan Payment $96,193
CWCB Annual Loan Obligation (V Ten Years) $105,813
Creditworthiness: The District has no existing long-term debt. Over the past 3 years, the District has
operated at a negative operating ratio (see Table 4)and has balanced its budget by dipping into its
reserves. The current balance of reserves, not including cash on hand, remains over$200,000.
Expenses outpacing revenues have been due in large part to the additional expenses related to
negotiating of the Dry Gulch Reservoir project with PAWSD and CWCB, and a reliance on a revenue
stream controlled by TABOR.
The District currently has a 0.31 mill levy and will be seeking voter approval to increase this to a 1.0
mill levy at an upcoming election. The District will not be able to afford the debt service payments
unless the mill levy increased is approved. Therefore, execution of the contract will be contingent
upon voter approval of the mill levy increase.
TABLE 4: FINANCIAL RATIOS
Financial Ratio Past 3 Years Future
w/Project
Operating Ratio(revenues/expenses) 85% 111%
weak: <100% average: 100% 120% stron : >12 (weak) (average)
$74K/$87K $2141</$193K
Debt Service Coverage Ratio 120%
(revenues-expenses)/debt service NA (average)
weak: <100% average: lQO% 120% strong: >120% ($214K-$87K)
$106K
Cash Reserves to Current Expenses 311% 118%
weak: <50% average: 50%- 100% strong: >100 (strong) (average)
$227K/$73K $227K/5193K
Future with revenues assumes voter approval of a 1.0 mill levy.
Collateral: Security for this loan will be a pledge of mill levy revenues backed by a rate covenant and
annual financial reporting. This security is in compliance with the CWCB Financial Policy#5
(Collateral).
cc: Rod Proffitt, Chair, Board of Directors, San Juan Water Conservancy District
Jennifer Mete, Colorado Attorney General's Office
Attachment: Water Project Loan Program - Project Data Sheet