BOARD00847

• Board Meeting Date: 9/13/2005
• Description: CF Section - New Loans - Central Weld County Water District - Proposed Dry Creek Reservoir
• Board Meetings - Doc Type: Memo

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Central Weld County Water District - Proposed Dry Creek Reservoir Agenda Item 12b
September 13-14. 2005
$1,845,449, The balance on the 2004 Water Revenue Refunding Bond was $1,000,000, with
annual payments ending in 2007, and the balance on the 1998 Colorado Water Resources and
Power Development Authority Bond was $845,449, with annual payments ending in 2012. Annual
payments on both bonds total $470,866 in 2005, increase to $485,897 in 2007, and drop to
$130,216 in 2008. The District is in compliance with the covenants of the bond resolutions
pertaining to revenues and expenses. CWCB will require parity of its lien on the pledged water
revenues with these bonds.

Table 2 shows the Financial Ratios for the District and indicates overall strong financial condition
and strong ability to repay both CWCB loans. CWCWD does not plan to raise their water rates, as
their current rate structure provides adequate revenue in excess of expenses.

Table 2. Financial Ratios

Financial Ratio Without With project
the project Future Year
(Aver. 2003-04) 2008+
Operating Ratio (revenue/expense)
weak: less than 100% 145% 158%
average: 100% - 120% (strong) (strong)
stranQ: Qreater than 120%
Debt Service Coverage Ratio
(revenues-expenses)/debt service 124% 110%
weak: less than 100% (aver,) (aver.)
average: 100% - 125%
stranQ: Qreater than 125%
Cash Reserves to Current Expense
weak: less than 50% 699% 510%
average: 50% - 100% (strong) (strong)
strano: oreater than 100%
Debt per Tap
weak: greater than $5000 $194 $788
average: $2500 - '$5000 (strong) (strong)
strano: less than $2500
Monthly Water Bill
average: $30 $ 21.50 $21.50
weak: greater than $60 (average) (average)

As security for the loan, the District will pledge water revenues backed by a rate covenant and
annual financial reporting. This is in compliance with CWCB Loan Policy #5 (Collateral).

Recommendation

Staff recommends a loan not to exceed $4,994,955 ($4,945,500 for project costs and $49,455 for the
1 % Loan Service Fee in accordance with CWCB Loan Policy #16), to the Central Weld County Water
District, acting by and through the Central Weld County Water District Water Activity Enterprise, from
the Severance Tax Trust Fund Perpetual Base Account, to construct the proposed Dry Creek reservoir
in 50/50 partnership with the Little Thompson Water District. The recommended terms of the loan are
20 years at 3.70% per annum. Security for the loan will be a pledge of water rate revenues backed by
a rate covenant and annual financial reporting.

Staff further recommends that final approval of the loan be conditioned upon all other standard
contracting provisions of the CWCB.

cc: John Zadel, General Manager, CWCWD
Ed Toms, P.E., Boyle Engineering Corporation
Amy Stengel, AGO

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