BOARD01806

• Board Meeting Date: 1/12/1998
• Description: CF Section - Request for Approval on Loans for New Projects - Windsor Canal and Reservoir Company
• Board Meetings - Doc Type: Memo

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The financial condition of the company is solid at the present time. The company has no other obligations
other than those listed in the fmancial statement found in Appendix E. Current loan obligations include annual
payments to the CWCB for three loans:
1) Douglas Reservoir- A 25-year loan at 5% interest for $761,000 initiated in 1991 with annual
payments of $53,995.
2) Pounre Valley ranal Phase 1- A 3D-year loan at 4.25% interest for $300.000 initiated in 1994 with
annual payments of $17,880.
3) Pounre Valley ramI and A..nciaten Strl'cn'res-A 30-year loan at 4.15% interest for $1,202.000
initiated in 1996. One project (Poudre Valley Canal Phase II) has been completed at a cost of
$260,420, and another project (Cobb Lake Downstream Pipeline) is currently under construction
at an estimated cost of approximately $486.000. After WRCCs 25 % cost obligation is met, the
amount of the loan currently being utilized is approximately $625,000. This results in an annual
payment of $36,805, which is cli.e amount used for analysis in this report.
None of the loans are delinquent and there or no other outstanding obligations. The 1996 Net Fund Reserve
of $430,032.22 as shown in the 1996 Financial Statement is set aside for meeting the WRCC obligation to pay
for 25 % of CWCB funded projects.

Table 3 shows cash flow and annual fmancial schedule for WRCC"s operations which includes the Douglas
loan, the Poudre Valley Canal Phase I loan, the Poudre Valley Canal Phase II and Cobb Lake Downstream
pipeline loan, 25% WRCC portion of the Cobb Lake Downstream pipeline project, the proposed Big Windsor
Pumping Station loan payments, and the WRCC's 25% costs for the Big Windsor Pumping Station. The
"Remaining Amount" column is the sum of all revenues and expenses for that year with the "Net Fund
Reserve" being the sum of the previous year's remaining amount including interest plus the current years
remaining amount. Assessments beyond the year 1997 are projected to leave a Net Fund Reserve sufficient
to pay for one year of all CWCB loan payments.

As can be seen from Table 3, assessments will rise from the current $325 per share to a maximum of $890
per share in the year 2027. This assumes an increase in operation costs of 3% per year, inflation of3% per
year, and interest income of 5% on the Net Fund Reserve. Table 3 also assumes energy costs for pumping
14,700 acre feet of water per year beginning in 1999. Table 4 shows that projected assessments without the
Big Windsor Pumping Station, accounting for the same inflation and interest rates, would increase to a
maximum of $685 by the year 2027.

The total project cost including interest is approximately $1,913,106. Over the life of the 30-year loan, with
1000 shares of outstanding stock, the average cost per share per year is approximately $64.

COLLATERAL

The WINDSOR RESERVOIR AND CANAL Company has the following collateral it can offer for the CWCB
loan, in this order of preference:

1. The revenue from assessments as allowed by the Company By-Laws and Articles of
Incorporation.

2. The physical structure including the dam and appurtenances structures.

3. Company assets including equipment, land. and buildings.

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