BOARD02622

• Board Meeting Date: 7/25/2006
• Description: CF Section - Revisions to Existing Loans - Consolidated Mutual Water Company - Loan Payment Deferral Request
• Board Meetings - Doc Type: Memo

STATE OF COLORADO

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Colorado Water Conservation Board

Department of Natural Resources
1313 Sherman Street, Room 721
Denver, Colorado 80203
Phone: [phone]
FAX: [phone]
www.cwcb.state.co.us

MEMORANDUM

Bill Owens
Governor

FROM:

Colorado Water Conservation Board Members
-1---
Kirk Russell, P.E. ~ L&/ /'
Mike Serlet, P.E., Chief.#! J
Water Supply Planning and Finance Section

Russell George
Executive Director

TO:

Rod Kuharich
CWCB Director

Dan McAuliffe
Deputy Director

DATE: July 17, 2006

SUBJECT: Agenda Item 9a, July 24-25, 2006 Board Meeting
Water Supply Planning and Finance Section - Changes to Existing Loans
Consolidated Mutual Water Company - Loan Payment Deferral Request

Introduction

e By letter dated April 17, 2006 (attached), the Consolidated Mutual Water Company (Company) has
requested deferments of five CWCB Construction Fund loan payments_ The purpose for this
request is to help offset the Company's upcoming financial burden related to replacement of its
existing water treatment plant. The total expected cost of that replacement is $20 million. The
Company's current $2,670,424 annual loan repayment for CWCB Contract #C150011 started in
March of 2003. The Company has made five annual payments including a supplemental annual
payment in 2005. If the deferment is approved, the Company will make five annual interest only
payments of $605,784 in 2007 through 2011 and resume a principal and interest payment of
$2,688,909 starting in March of 2012 and continue through 2016. Original Project Data Sheet
attached.

BackQround

cweB approved the original $10 million Fortune Reservoir Loan in January 1999 for the
construction of a new reservoir subsequently renamed Welton Reservoir. The loan was amended in
January 2000 (Amendment 1) to increase the loan amount to $16.3 million. The loan was again
increased in July of 2001 to $20.6 million (Amendment 2). Each amendment included an increase in
the interest rate for the increased amount. See Table 1. Loan Contract History. The Company is in
year five of repayment and has been prompt each year. In 2005, the Company provided an
additional annual payment with excess cash available. The Company is requesting that the ewcs
consider deferring five annual payments to assist with the financial impacts of the $20 million of
needed system improvements.

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Flood Protection. Water Supply Planning and Finance. Stream and Lake Protection
Water Supply Protection. Conservation and Drought Planning