BOARD01171

• Board Meeting Date: 11/19/2001
• Description: CF Section - New Loans - Larimer County - Dry Creek Flood Mitigation Project
• Board Meetings - Doc Type: Memo

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Credit worthiness: Table 2 shows the Financial Ratios for the Dry Creek Stormwater
Utility and verifies that, based on the proposed utility's fee structure, all financial indicators are
in the average to strong category.

Table 2.
Dry Creek Stormwater Utility
Financial Indicators for Future Years

Indicator Weak Averal!e Stronl! Ratio
Onerating Ratio (1 ) <100% 100-120% >120% 646%
Debt Service Coverage Ratio (2) <100% 100-125% > 125% 119%
Cash Reserves to Current Expense <50% 50-100% >100% 130%
Debt per Tap >$5,000 $2,500-$5,000 <$2,500 $2,841

(I) Operating revenue/(operating expense-depreciation)
(2) (Revenue-operating expense-depreciation)/debt service

As security for the loan, the County will pledge assessment revenues of the stormwater
utility enterprise backed by a rate covenant, as well as its contract rights to receive revenues from
the City's stormwater utility and the Irrigation Company under their funding agreements with the
County. This security is in compliance with the CWCB Financial Policy #5 (Collateral).

Based on information provided by the County and on the feasibility study submitted by
ECI, Inc., staff believes that the project is technically, economically, and financiaIly feasible.
The health, safety, and welfare of citizens in the Dry Creek area of Larimer County and Fort
Collins are enhanced by the project and the delivery and utilization of inigation flows is
improved. Considering the cumulative benefits and costs, the benefit-to-cost ratio for the project
exceeds 2.0.

Recommendation

Staff recommends a loan of up to $11,000,000 from the Severance Tax Trust Fund
Perpetual Base Account to Larimer County, acting by and through its Dry Creek Stormwater
Utility Enterprise, for the construction of flood control mitigation improvements to the Dry
Creek Basin as described in this memo. The loan would be for a tenn of 30 years at the
Municipal Low Income lending rate for 2002. As security for the loan, the stormwater utility
enterprise will pledge utility assessment revenues backed by a rate covenant and annual financial
reporting, and its contract rights to receive revenues from the City's stormwater utility and the
Irrigation Company under their funding agreements with the County.

Staff further recommends the foIlowing conditions for loan approval:
1. The County is successful in forming its' proposed Dry Creek Stormwater Utility
Enterprise;
2. The County and Larimer-Weld Irrigation Company enter into an agreement outlining the
payment terms for the Company's share of the project costs; and
3. All required pennits are obtained for the project

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

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