BOARD00671

• Board Meeting Date: 3/21/2006
• Description: CF Section - Construction Fund and Severance Tax Trust Fund Perpetual Base Account New Loans - Town of Keenesburg - Raw Water Pipeline and Well Purchase
• Board Meetings - Doc Type: Memo

Town of Keenesburg
March 21-22, 2006

Agenda Item 17c

Transporting the Roggen well water to the Town would require two lift stations. The estimated cost _
of this alternative is approximately $2.6 million. This alternative would bring additional water _
quantity to the Town for future growth, but would not result in a significant improvement in the
Town's current water quality.

Selected Alternative 2, Purchase PV Water - The selected alternative is the purchase of 139.6
AF of well water rights in the Lost Creek Groundwater Basin, construction of a new replacement
well with a variable speed pump, construction of 5.5 miles of 8" transmission pipeline to the Town,
and completion of the water biending facility at the Town's existing water tank.

The Total Project cost is estimated to be:

TOTAL

$1,116,800
911,480
157,230
136,690
$2,322,200

1.
2.
3.
4.

Water Rights Purchase
Construction - Pipeline, Well, Structures
Engineering
Contingency (15%)

Schedule - The purchase of the water rights Is expected to occur with the next 90 days, and the
overall project is expected to be completed in late 2007.

Financial Analvsis

The total estimated cost of the project is $2,322,200. The Town qualifies for the Municipal Middle-
Income interest rate, and staff is recommending a maximum loan amount of $1 ,508,000 (65% of the -
estimated project cost) for 30 years at an interest rate of 3.75%. The Town will pay the 35% local .,
share ($814,200) of the project cost using existing reserve water funds.

Table 1 is a summary of the financial aspects of the project. A CWCB Loan of $1,508,000 would
have an annuai payment of $93,038 (including the 10% reserve requirement) at the loan terms of
3.75% for 30 years.

Table 1. Financial Summary

in 2007

$2,322,200
461
$1,508,000
$93,038
$22
$30
$16.82
$666

)

Table 2 shows the Financial Ratios and indicates overall average to strong ability to repay the
$1,508,000 CWCB loan, with the Increased water rates.

e

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