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Parker Water and Sanitation District November 19-20, 2001 Agenda Item 21a. (LJpdat~d I\IQ~~ijjp~~\i!,~\i\2GG1) 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 CWCB 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 initia/20-year loan in amount of $15 million (approximately 16% of eligible project costs.) The recommended interest r,ate is CWCB municipal high-income rate for20Q2 (~~tl~~t~~:~14. 75% ~Qr:lffilli$:I~"k!~IW~li~f!.) 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. a e mancla ummarv Proiect Cost $103 million Number of Sinale Familv Eauivalents 9183 Number of Customers 7924 CWCB Loan Amount $15 million CWCB Loan Payment (includes 10% reserve) $1,296,082 Current Monthlv Water Rate $39.00 Monthlv per tap cost of the CWCB loan $10.65 Annual Loan Cost per acre-foot (reservoir storaQe: 16,200 ac-ft.) $80.00 T bl 1 F" . I S 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 CWCB 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. 3