BOARD01481

• Board Meeting Date: 11/19/2001
• Description: CF Section - Parker Water and Sanitation District
• Board Meetings - Doc Type: Memo

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Parker Water and Sanitation District
November 19-20.2001

Agenda Item 21a.

The implementation schedule calls for completion of the final design and submission to the
State Engineer's office in July 2002. The Draft Environmental Impact Statement should be
available for public comment in January 2002, with the final EIS published in summer 2002. The
Army Corp. of Engineers is expected to issue the 404 permit in mid-2002. Construction of the
Rueter-Hess Reservoir and all ancillary projects would start in spring 2003.

Financial Analvsis
The total estimated cost of the project is $103 million. Of this amount, $92.6 million qualifies for
CWCS financing. PWSD is requesting an initial loan in amount of $15 million with the
understanding that there is no guarantee of additional CWCB funding in future years. The
PWSD provides water for municipal purposes, and the medium household income in the PWSD
service area, including the Town of Parker and portions of Douglas County, is in the High-
Income category; Staff is recommending an initial20-year loan in amount of $15 million
(approximately 16% of eligible project costs.) The recommended interest rate is 4.75%.

Alternative financing sources: The District has evaluated alternative financing from the
Colorado Water Resources and Power Development Authority, and from the issuance of
Revenue Bonds. The District already has substantial debt with the CWRPDA, and plans to rely
on that agency to finance a portion of this project also. The PWSD may also utilize stand-alone
publiC financing as well as its own reserves to cover project costs.

Table 1 is a summary of the financial aspects of the project. A CWCB Loan of $15 million would
have an annual payment of $1 ,296,082 (including the 10% reserve requirement) at the loan
terms of 4.75% for 20 years. This represents $80 per acre-foot, based on reservoir storage of
16,200 acre-feet.

Table 1. Financial Summary

e: 16,200 ac-ft.

$103 million
9183
7924
$15 million
$1,296,082
$39.00
$10.65
$80.00

Credit worthiness: As of August 15, 2001, the District's outstanding debt totaled $45.5 million.
All debt service has been paid as agreed, and the PWSD has maintained all necessary reserve .
accounts and coverage ratios. The District's 2001 Water and Sewer Refunding Bonds were
insured by FGIC and rated AAA by Standard and Poor's and Aaa by Moody's Investors Service.

Credit Report: As part of the loan review process, the CWCB requested that the Colorado
Department of Local Affaires provide a credit report on the PWSD. The report finds that the
PWSD is in a strong financial position and has a solid ability to repay the debt service of the
proposed $15 million CWeB loan. This is primarily true because the District has built sizeable
fund reserves, and because the District serves a community whose median household income
suggests the ability to pay for increasingly costly water and sewer systems. The credit report
recommends that the CWCB favorably consider a loan to the District for the requested amount
of $15 million.

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