C150081 Approval Letter

• Contract/PO #: C150081
• Contractor Name: Victor, City of
• Contract Type: Loan
• Water District: 12
• County: Teller
• Bill Number: HB 95-1155
• Loan Projects - Doc Type: Approval Letter

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STATE OF COLORADO

Q

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

Bill Owens
Governor

MEMORANDUM

Greg E. Walcher
Executive Director

TO:

Mike Serlet ~
Bill Green 13

Rod Kuharich
CWCB Director

Dan McAuliffe
Deputy Director

FROM:

DATE: June 28, 2001

SUBJECT: City of Victor Feasibility

Background

In January 1995, the Board recommended a $600,000 loan to the City of Victor for the
rehabilitation of Victor No, 2 Dam (subsequently authorized in HB 95-1155). Two
conditions of Board approval were: (1) the City must submit an acceptable feasibility
study, and (2) staff must complete a final evaluation of the City's ability to repay the
loan,

Feasibility Study

The feasibility study was prepared over a period of about 13 years with the final
installment, Chapter VIII, Financial Program, submitted to us in December of last year.
I don't have access to my copies of the feasibility studies right now but I think my only
concern, other than the financial considerations, was the cost estimate which appeared to
be too low at about $800,000 and was later increased in the financial chapter to about
$1,124,000. In addition to the CWCB loan, funding for the project will come from a
Department of Local Affairs grant of about $278,000 and from the City.

Financial Feasibility

The City has a combined water and sewer fund. The financial program in the feasibility
study (cash flow for the 20 years of debt retirement) was based on the assumption that the
City would establish a separate water fund since we did not expect that Rural
Development would grant parity on their loan to the City.

RD did grant parity on May 9 and I revised the financial program to reflect repayment
from a combined water and sewer fund. A copy of my financial projection is attached as
Table 1. The table indicates that revenues should exceed expenditures by a relatively
small amount in each year of debt retirement. (I estimated the annual debt service on the
RD loan at $54,000 but wasn't able to verify that beyond the next seven years.) The loan
was approved at 4.0 percent for 30 years but the City has indicated it would prefer 20-

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Water Supply Protection. Conservation Planning