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<br />Tunnel Water Co. <br />January 24-25, 2001. <br /> <br />Agenda Item 10b. <br />(Updated February 5, 2001) <br /> <br />Credit worthiness: TWC has no debt, other than the two CWCS loans. Table 5 shows the <br />. Financial Ratios and indicates average ability to repay with the project in place. <br /> <br /> <br /> <br />59% <br />$3.19 <br /> <br /> <br />54% <br />$19.47 <br /> <br /> <br />As security for the loan the TWC will pledge assessment revenues backed by assessment <br />covenant and Company property at least equal in value to the loan amount. <br /> <br />Recommendation <br />Staff recommends a loan not to exceed $2,080,000 to the Tunnel Water Company for <br />continued rehabilitation work on the Laramie-Poudre Tunnel. The recommended term of the <br />loan is 30 years and the recommende. d blended interest rate is 4.~~.JThe Company would <br />also be allowed to borrow at ~ lIB for 20-years or at ~ ~ for 10-years, at its <br />option.) Security for the loan will be a piedge of assessment revenues backed by assessment <br />covenant and Company property at least equal in value to the loan amount. This loan would be <br />funded from the Construction Fund. <br /> <br />. <br /> <br />(Note: This loan is in addition to the $1.6 million Emergency Loan already approved by the <br />CWCB at terms of 4.5% for 30 years,) <br /> <br />Staff recommends that the Company be allowed to use this loan to refinance project costs <br />alreadY' completed and paid for with short term bridge financing. <br /> <br />Staff further recommends that final approval of the loan be conditioned upon acceptance of the <br />project and the associated financial obligations by a vote of the shareholders of the Company, <br />and all standard contracting provisions of the CWCB. <br /> <br />Action Taken bv the CWCB Januarv 24, 2001 <br />The CWCB approved the Staff Recommendation. <br />(Note: The 20-year and 1 O-year terms were incorrectly stated as 3.8% and 3.3% in the Board <br />memo, and should have been 4.05% and 3.8%, respectively. This reflects Board policy of allowing <br />a .25% reduction in rate for each 10-year reduction in loan term.) <br /> <br />cc: Fred Walker, President, Tunnel Water Co. <br />Don Deere, P.E., RMC <br />Linda Bassi, AGO <br /> <br />Attachment <br /> <br />. <br /> <br />C:\WP51\Proj-New\TunneIWaterC01 01 memo <br />L:\boardmem~an01\1 Ob Tunnei Water Co <br /> <br />5 <br />