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Mancos Water Conservancy District November 25-26, 2002 Agenda Item 20a. '. The schedule calls for completion of financial arrangements and engineering in 2002 and 2003. Loan consolidation would be completed in summer/fall 2003, to improve District cash flow. Rehabilitation would start in 2004 at the upper end of the system, and proceed in a downstream direction, until complete. The MWCD would rehabilitate certain sections out of sequence, if conditions required it. The entire project would be completed by 2014. Financial Analvsis The total estimated cost of the project is $6.62 million, and the MWCD has requested a loan of $5.49 million, approximately 83 percent of the total cost. The MWCD plans to increase assessments to repay the CWCB loan, and for their 17% of the project cost. Table 1 is a summary of the financial aspects of the project. Total annual assessments would need to increase from $90,000 per year to $278,000 per year with a Construction Fund loan of $5.49 million. Table 1. Mancos Water Conservancy District - Financial Summarv Proiect Cost $6.62 million CWCB Loan Amount . $5.49 million CWCB Loan Pavment (includes 10% reserve.) $300,004 Curent Assessments $90,000 Assessments with loan $278,000 Annual Loan Cost oer acre-foot (9,146 acre-feet total yield) $20.55 . Water from this project is used for agricultural and municipal purposes. Shareholder Rate Cateaorv Year 2002 Rate Percent of Use Rate x Percent Aaricultural Aaricultural 2.75% 92% 2.53% Mancos, Municipal 3.75% 8% 0.30% Town Low Income Totals 100% 2.83%* Table 2' MWCD Blended Interest Rate *The loan rate for the MWCD would be 2.8% (rounded down to the nearest .1 %) Credit worthiness: The MWCD has the following debt. CWCB (Diversion Structure) $ 54,258 CWCB (Canal Pipe) $ 45,353 *SWCD (Canal Pipe) $ 45,353 *SWCD (Penstock) $ 36,521 *Mancos Valley Bank (Hydro Plant) $101,573 USBOR $180,000 (* Loans that will be refinanced with the new CWCB loan.) \. All existing loans have been paid as agreed. Table 3 shows the Financial Ratios and indicates 2 ratios in the average and 2 in the weak category, with the project in place. These ratios are a worst-case scenario and assume that the entire project is completed at once, and that all repayment comes from the water users in the form of assessment increases. The District will phase the project over a number of years, during which time it may also seek a mill levy increase for the entire district, through an election in accordance with TABOR. 3