BOARD00228

• Board Meeting Date: 7/23/2001
• Description: CF Section - Changes to Existing Loans - Consolidated Mutual Water Company Fortune Reservoir Construction Project
• Board Meetings - Doc Type: Memo

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STATE OF COLORADO

Colorado Water Conservation Board
Department of Natural Resources
1313 Sherman Street, Room 721
Denver. Colorado 80203
Phone: [phone]
FAX: [phone]

Memorandum

TO:

Colorado Water Conservation Board Members

FROM:

Tim Feehan, P_E., Pro~~~~anager
Mike Serlet, P.E., ChiWtJ ater Supply Planning and Finance Section

July 13, 2001

DATE:

SUBJECT:

Agenda Item No. lOa, July 23-24, 2001, Board Meeting
Water Supply Plauning and Finance - Changes to Existing Loans
Consolidated Mutnal Water Company
Fortune Reservoir Construction Project

e INTRODUCTION

tit

Bill Owens
Governor

Greg E. Walcher
Executive Director
Rod Kuharich
Director

Dan McAuliffe
Deputy Director

The Consolidated Mutual Water Company of Lakewood, Colorado, is requesting an
increase of $4,333,000 to the Company's 2000 authorization of $16,300,000 .for the Fortune
Reservoir Construction Project. The requested loan increase is due to cost overruns incurred
during construction and additional work that has been incorporated into the overall project.

BACKGROUND

At the January 1999 board meeting, the Colorado Water Conservation Board (CWCB)
approved a loan to the Consolidated Mutual Water Company in the amount of $10,000,000, from
the Construction Loan Fund. The loan was subsequently authorized by the legislature in SB 99-
173. The loan amount was for the construction of a new 9,000 acre-feet earth embankment
reselVoir, with a 5,000-foot crest length and a dam height of 105 feet. The terms of the loan were
not to exceed 50% of the total estimated project cost of $20,000,000, at an interest rate of 4.75% for
10- years.

At the January 2000 board meeting, the Colorado Water Conservation Board approved an
increase of $6,300,000 to Consolidated Mutual Water Company's 1999 authorization of
$10,000,000, resulting in a total authorization of $16,300,000 from the Construction Loan Fund.
The $6,300,000 loan increase was derived by increasing the maximum total project loan cost share
from 50% to 75%, using a revised estimated total project cost of $21 ,747,852, as summarized in the
completed feasibility report prepared by BBC Research and Consulting of Denver, Colorado. The
lending rate for the $6,300,000 is at 5.00% for lO-years. The overall rate of return on the total loan,
amount of$16,300,000 is 4.85% for lO-years.

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