BOARD00033

• Board Meeting Date: 11/23/1998
• Description: CF Section - New Loans - Columbine Ranches Property Owners Association
• Board Meetings - Doc Type: Memo

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Financial Analvsis
The total estimated cost of the project (water rights purchase, engineering, and hydraulic structures) is
between $317,000 and $407,000_ Staff is requesting that the Board consider a loan for up to 75 percent of
the high cost estimate, not to exceed 75 percent of the actual cost. The estimated maximum loan amount is
$305,250, and the estimated minimum loan amount is $237,750_ The CRPOA will establish a one-time
assessment of lot owners to raise the remaining 25 percent of the project cost. That assessment will be
between $1,468 and $1,884 per lot

Table I is a summary of the fmancial aspects of the project The actual loan amount will be determined
after the Association identifies senior rights to purchase, and enters into a contract to purchase those rights.
As shown in Table I, annual assessments may increase from $400 per member (lot), up to $530 per
member with a Construction Fund loan of $237,750, and up to $611 per member with a loan amount of
$305,250_ This represents a monthly assessment of between $44 and $51 per lot, an increase over current
levels of between $11 and $18 per month.

Table 1. Columbine Ranches POA Financial Summary

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Project Cost $317,000 to $407,000
Loan Amount $237,750 to $305,250
Number of Members (Membership Units or Lots) 54
Current Assessment per Member (Lot) $400
Future Assessment per Member (Lot) $530 to $611
Future Assessment per Member, per Month $44 to $51
Annual Cost per acre-foot (120 acre-feet total yield) $239 to $275
MHI Adams County, 1990 (1990 State Average - $30,140) $30,522

As mentioned above, water is used by the members (lot owners) for lawn and garden irrigation, stock
watering (primarily horses), and for fire protection. All uses occur within an existing subdivision located in
unincorporated Adams County_ The median household income in the service area appears to qualify for the
Municipal Standard Income Lending rate (see Table L)

The CRPOA has no existing debt Income to repay the CWCB loan will come from an assessment increase
expected to range between $11 and $18 per month_ This additional assessment represents a small part of
the disposable income for a middle income family_ In addition, the Association's ability to enforce
payment of assessments through lien and foreclosure against individual properties assures that assessments
can always be collected.

As security for the loan the CRPOA will pledge revenues from assessments, as well as the water rights that
are purchased with the CWCB loan_

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Recommendation
Staff recommends a loan not to exceed $305,250 to the Columbine Ranches Property Owners Association
for 75% of the costs to purchase water rights for augmentation, and for directly related costs of
engineering and construction associated with actually placing these rights into use for augmentation. The
recommended term of the loan is 30 years and the lending rate would be that rate approved by the Board
for Municipal Standard Income borrowers in 1999. As security for the loan, the Columbine Ranches

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