BOARD00153

• Board Meeting Date: 5/19/2003
• Description: CF Section - Changes to Existing Loans - Windsor Reservoir and Canal Company System Rehabilitation Project
• Board Meetings - Doc Type: Memo

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Paragraph (2) of Section 1 of HB 00-1419 allows that loans made by the Colorado Water
Conservation Board may be increased or decreased as may be justified by "reasons of ordinary fluctuations
in construction costs as indicated by the engineering cost indices applicable to the types of construction
required for each project or as may be justified by reason of changes in the plans for a project due to
differing or unforeseen site conditions, errors, or omissions in the plans and specifications, changes
instituted by regulatory agencies, or changes in material quantities beyond contract limits ". Unforeseen
site conditions, design modifications, and additional work not programmed in the original cost estimate of
the project, has required work that increases the total estimated cost of the project and therefore justifies
Windsor Reservoir and Canal Company's requested $301,500 increased loan request.

Financial Analvsis

The new loan amount for the Windsor Reservoir and Canal Company will be $2,658,500 (which is
less then 90% of the total construction cost). The loan will break down as follow:

. $1,202,000@4.15% for 30-years
. $1,155,000 @4.00% for 30-years
. $301.500 (al,4.00% for 30-years

The Windsor Reservoir and Canal Company's annual payment will increase from $137,632.63 to
$155,068.40. .

With the proposed loan amendment, the Windsor Reservoir and Canal Company with have three
construction Fund Loans, with a total outstanding balance 00,445,288.20 and an annual payment of
$226,942,69. These three loans represent the Company's entire long-term debt.

The cash flow analysis provided by the Company, based on the Company's total annual payment of
$226,942.69 indicates sufficient annual revenues in 2003, given the Company's 2003 assessment rates and
cash reserves. The Company will have to increase its assessment rates in 2004 to those similar in 2002 to
cover long term debt and operating expenses (See Attached Assessment Sheet). Assessment rates were
lowered in 2003 given the severe economic climate predicted due to the drought. All financial indicators
for the Company still fall in the average to strong category.

The total cost of the project will increase the Company's assessments by approximately $160 per
share of stock. The 1996 Feasibility Study predicted an increase in assessments of approximately $176.
The total cost per acre-foot per year for the 30-year loan is $5.30.

Staff Recommendation

Based on staffs review of the original feasibility cost projections, the supporting documentation
provided by the Windsor Reservoir and Canal Company of additional cost occurred to-date, inspection of
the site, and overall financial strength of the Company, staff finds the requested loan increase of$301,500
to be economically, financially, and teclmically sound.

Flood Protection. Water Project Planning 2Cnd Financing. Stream and Lake Protection
Water Supply Protection. Conservation Planning