BOARD01160

• Board Meeting Date: 3/21/2002
• Description: CF Section - The Tunnel Water Company ‎(Laramie-Poudre Tunnel)‎ Borrower Request to Lower Interest Rate on Existing Loan
• 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]
PAX: [phone]
www.cwcb.state.co.us

MEMORANDUM

Governor

Greg E. Walcher
Executive Director

TO:

Rod Kuharich
CWCB Director

Colorado Water Conservation Board Members

FROM:

John Van Sciver -.::J""L.VV;/ r
Mike Serlet, P.E., Chief ~
Water Supply Planning and Finance Section.

Dan McAuliffe
Deputy Director

DATE: March 4, 2002

SUBJECT: Agenda Item 12., March 21-22, 2002 Board Meeting
The Tunnel Water Company (Laramie-Poudre Tunnel)
Borrower Request to Lower Interest Rate on Existing Loans.

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Introduction
The Tunnel Water Company (TWC) has two loans with the CWCB:

· $1.6 million Emergency loan approved by the CWCB September 25, 2000. 4.5% for 30 years.
· $ 2.06 million loan recommended by the eWCB January 24, 2001. 4,3% for 30 years.

TWC has asked that the interest rate for each of these loans be reduced to the CWCB Agricultural
rate. The reason for the request is based on the fact that although certain municipalities own
shares in the TWC, the water from those shares is actually being leased back and used for
agricultural purposes. (Please see attached letter from the Tunnel Water Company. dated January
15,2002.)

Backqround
The TWC applied for CWCB financing to rehabilitate the Laramie-Poudre Tunnel, which had
collapsed in May 2000. TWC shares are owned by a combination of agricultural and municipal
interests, There are 450 shares in the Company, of which 296 are agricultural shares (66%) and
154 are municipal (34%).

Staff calculated a blended intE1rest rate for each loan based on the percentage oWf)ership of shares
for each type of borrower (e.g, Agricultural, Municipal high income, Municipal average income,
etc,), applying the CWCB interest rates in effect at the time the loans were approved, in
accordance with CWCB PoliCy No. 7. (See attached Tunnel Water Company Board Memo dated
January 11,2001, page 4,}