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., '" e e e Lake Meredith Reservoir Co. March 24-26, 2003 Agenda Item 24c. Financial Analvsis Three entities will provide financing for the project by either grants or loans, with an estimated cost of $1,524,860. The estimated amounts from each source are provided in Table 1. TABLE 1 . SOURCES OF FUNDING Entity Grant Loan Assessment Percent Particioation Lake Meredith Shareholders $9.860 .7% Enaineerina Feasibilitv First National Bank of Ordwav -- $500,000 -- 32.8% CWCB Feasibilitv Grant $5,000 -- 0.3% CWCB Construction Loan and $1,000,000 $10,000 66.2% Loan Orioination -- Total $5,000 $1,500,000 $19,860 100% The Company will cover any costs that exceed the estimated project cost by special assessments of the Shareholders, although no such assessments are expected. The total estimated cost of the project is $1,524,860, and the water is used primarily for municipal purposes, with some agricultural use. Staff is recommending a 30-year loan in maximum amount of $1,000,000 (approximately 66% of the estimated total project cost.) Table 2 shows the calculation of the blended interest rate for this project: Table 2: LMRC Share Ownership and Interest Rate Shareholder Rate Category Year 2001 Rate # Shares Rate x Shares LMRC Aoricultural Aaricultural 2.75% 4620 127 Municipal Municipal 4.75% 230 11 (Woodland Park) Hiah Income Municipal (Aurora, Municipal 4.25% 35,048 1490 Colo. Springs, FO~,ntain, Middle Income Pueblo, Ft. Collins Municipal Municipal 3.75% 724.094 27 (Crowley Co., ~~~ey Low Income Snrinns, Ordwa Totals 40,621 1,655 I Blended Rate = 1655/40,621 shares 4.073 % 30-year blended rate for LMRC (Round to 4.00%\ The CWCB loan payment (including the 10% reserve requirement) would be $63,613 per year at the loan terms of 4% for 30 years. To this cost would be added the loan payment to the First National Bank of Ordway for a $500,000 loan. The annual payment for that loan is expected to be about $67,934. The total of annual payments for the two loans will be $131,547. The Company has applied for a $5,000 grant from the CWCB for the Feasibility Study. Any other ancillary expenses will be paid from contingency accounts of the Company's operating budget. The Following Table 3 shows a summary of the project financing. 3