BOARD00528

• Board Meeting Date: 3/24/2003
• Description: CF Section - Lake Meredith Reservoir Company
• Board Meetings - Doc Type: Memo

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Lake Meredith Reservoir Co.
March 24-26, 2003

Agenda Item 24c.

Financial Analvsis
Three entities will provide financing for the project by either grants or loans, with an estimated
cost of $1 ,524,860. The estimated amounts from each source are provided in Table 1.

TABLE 1 - SOURCES OF FUNDING

Entity Grant Loan Assessment Percent
Participation
Lake Meredith Shareholders $9.860 .7%
Engineering Feasibility
First National Bank of Ordway -- $500,000 -- 32.8%
CWCB Feasibility Grant $5,000 -- 0.3%
CWCB Construction Loan and $1,000,000 $10,000 66.2%
Loan Origination --
Total $5,000 $1,500,000 $19,860 100%

The Company will cover any costs that exceed the estimated project cost by special
assessments of the Shareholders, although no such assessments are expected.

The total estimated cost of the project is $1,524,860, and the water is used primarily for
municipal purposes, with some agricultural use. Staff is recommending a 30-year loan in
maximum amount of $1,000,000 (approximately 66% of the estimated total project cost.)
Table 2 shows the calculation of the blended interest rate for this project:

Table 2: LMRC Share Ownership and Interest Rate

Shareholder Rate Category Year 2001 Rate # Shares Rate x Shares
LMRC
Agricultural Agricultural 2.75% 4620 127
Municipal Municipal 4.75% 230 11
(Woodland Park) High Income
Municipal (Aurora. Municipal 4.25% 35,Q48 1490
Colo. Springs. Fountain. Middle Income
Pueblo. Ft. Collins)
Municipal Municipal 3.75% 724.094 27
(Crowiey Co., Oiney Low Income
Springs. Ordway)
Totals 40,621 1,655
4.073 %
30-year blended rate for LMRC Blended Rate = 1655/40,621 shares (Round to 4.00%)

The CWCB loan payment (including the 10% reserve requirement) would be $63,613 per year
at the loan terms of 4% for 30 years. To this cost would be added the loan payment to the FJrst
National Bank of Ordway for a $500,000 loan. The annual payment for that loan is expected to
be about $67,934. The total of annual payments for the two loans will be $131,547. The
Company has applied for a $5,000 grant from the CWCB for the Feasibility Study. Any other
ancillary expenses will be paid from contingency accounts of the Company's operating budget.
The Following Table 3 shows a summary of the project financing.

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