BOARD01437

• Board Meeting Date: 11/19/2003
• Description: CF Section - Changes to Existing Loans - Lake Meredith Reservoir Company - Lake Meredith Outlet Channel Reconstruction
• Board Meetings - Doc Type: Memo

The following is a summary of the actual cost incurred by the Reservoir Company:

* Channel Excavation
* Construct Outlet Structure
* Construct Storm water Inlet
* Engineering and Permits
* Loan Origination Fee

Original Cost
Estimate
$785,000
$400,000
$100,000
$82,000
$10,000

Actual Cost
Incurred
$1,245,645
$433,455
$86,400
$61,500
$10,000

* Northwest Drop Structure
* Standby Generators
* Automation of Existing Outlet

$0
$0
$0

$36,000
$12,000
$47,000

* Contingencv
* Project Total

$147,800
$1,524,800

$30,000
$1,962,000

Based on the costs as illustrated above, the Reservoir Company is requesting 75% of the total
additional project cost incurred, for an increased loan amowlt of $471,500, at their current interest rate of
4.00%

DISCUSSION

Unforeseen site conditions, design modifications, and additional work not programmed in the
original cost estimate of the project, has required work that increases the total estimated cost of the project
and therefore justifies Reservoir Company's requested $471,500 increased loan request.

FINANCIAL/COLLATERAL

The amended loan amount for the District will be $1,471,500, at an interest rate of 4.00% for 30-
years. Their new a111111al payment will be $93,607, which includes their 10% reserve requirement. The
District's current loan of $1 ,000,000 has an annual payment of $63,313.

The Reservoir Company has an existing loan with let National Bank of Ordway for $500,000, at 6%
for 10-years with an annual payment of $63,934. The Reservoir Company currently has 40,621 shares of
stock with an a111111al assessment of $5.50 per share. The Reservoir Company is planning on increasing
their 2003 assessment rate of $5.50 per share to $9.50 per share upon completion of the project. Based on
the $9.50 per share assessment the Reservoir Company's fl11ancial ratios, with the exception of cash
reserves, indicate a strong ability to repay the $1,471,500 CWCB loan.

As security for the loan the Reservoir Company will pledge assessment revenues backed by
assessment rate covenant and the project itself. The security is in compliance with CWCB Policy No.5

Flood Protection. Water Project Planning ~d Financing. Stream and Lake Protection
Water Supply Protection. Conservation Planning