Utility Committee Agenda and Packet 2020 05 12

Home Browse Search

As rates continue to compress at historical lows the difference between the credit ratings is reducing and having less impact in the analysis. If this market trend is sustained, it is possible this main advantage to individual financing will no longer be a factor. At the assumed higher 3.5% rate, the CWCB loan essentially compensates for the credit rating difference and as shown in the table the group and individual options are nearly equivalent. Therefore, there is only a small select set of circumstances that make the individual financing preferred. Given the likelihood that rates will be relatively the same, Staff are recommending group financing to take advantage of the historical practice of excluding this type of financing from the City debt coverage and preserve the City’s ability to acquire addition bond or loan funds in the future. Timing: The municipal sub-district committee is looking for commitment from those participants interest in the joint financing in the next several months. Under this assumption, loan proceeds would be available this year and loan payments would start in 2021. The City’s 2020 contributions could be limited to the $378,000 authorized in late 2019 for the 5th amendment or a higher optional amount depending on the desired cash down payment. Previous projection have estimated a $2.5 million cash payment. However, the cash payment is being reevaluated as full impacts from COVID-19 are unknown. Alternatively, if the loan is delayed until 2021, a 6th amendment is the amount of $100,000 to $200,000 in 2020 will be needed to maintain progress. Project History: The Windy Gap Project (WGP) was first proposed in 1967 by the cities of Boulder, Estes Park, Fort Collins, Greeley, Longmont and Loveland. Completed in 1985, WGP consists of a diversion dam at the confluence of the Colorado and Fraser Rivers, a pump plant and a 6-mile pipeline to Lake Granby. The WGP is capable of diverting 48,000 acre feet (AF) of water each year. Once stored in Lake Granby, water is delivered to water users via the Colorado-Big Thompson Project’s (C-BT) East Slope distribution system. However, during wet cycles Lake Granby is often full, leaving little or no space for WGP water. Conversely, the water rights associated with the WGP are relatively junior and are less likely to be in priority preventing diversions during dry cycles. Additional storage, contemplated since the WGP’s inception, was proposed to provide more reliable WGP water deliveries. These efforts culminated in the Windy Gap Firming Project with the major component being the construction of a 90,000 AF reservoir at Chimney Hollow in the foothills west of Carter Lake. The formal federal permitting process was entered in 2003 with the final permits issued in 2016 and 2017. Project design wrapped up in 2019 and early stages of construction have started in 2020. City Involvement: In the early 1990s, Louisville developed and implemented a plan for the acquisitions of additional water rights to secure adequate supplies to meet demand. The major component of this plan was securing a secondary supply by utilizing C-BT and WGP. The City joined the Municipal Subdistrict Northern Colorado Water Conservancy District in 1996 and over timed acquired 2,067 units of C-BT and 9 units of WGP. Northern operates these projects in conjunction and participation in one requires the participation in the other. Participation levels are set by a 2:1 ratio for average yields. Supply and Demand: 17