A Review of What Mr. Nyquist is Asking of Us from a Professional Perspective
In the past, I have provided financial analysis to several small
and medium sized businesses. I am looking at Mr. Nyquist's
request for a change to the metro district where Walmart is
located for what it is: a business proposition. In my opinion,
the question that is on every Elbert County citizen's mind is,
"What does this business proposal mean to me, to my land, to
my water rights, and to my pocketbook?" It is my opinion and
belief that the following statements are as accurate as
My perception of Mr. Nyquist's request for the Third
Amendment to Service Plan for Elbert and Highway 86
Commercial Metropolitan District (3rd Amendment
document) is that he is asking to create a water district, with a
service area which would cover the entire state of Colorado.1
In addition, I believe that Mr. Nyquist is asking permission to
issue "... revenue bonds, secured by fees, rates tolls or
charges ... " (p12) to fund " ... three possible regional and
statewide projects ... " (p.7)
What Mr. Nyquist Calls the Financial Analysis
In the 3rd Amendment document, Mr. Nyquist refers to the
financial analysis as "... representations of possible financing
scenarios ..." (p12) In Exhibit F - Financing Plan, the financial
analysis is referred to as a "Sample Plan." I will use the term
"Sample Plan" to describe the financial analysis of each
Three Different "Sample Plans"
• Sample Plan #1 is to provide water and sewage services to
a individual subdivision.
• Sample Plan #2 " is an example of how the District can
finance and develop large regional infrastructure
improvements such as a major regional water pipeline that
could provide a renewable water supply ..." (p9)
• Sample Plan #3 is an expanded version of Sample Plan #1
where services are " ... scaled to fund a larger project than a
single subdivision." (p9)
A Review of the Sample Plans
• Sample Plan #1 - an analysis of Mr. Nyquist's of cash flow
• Sample Plan #2 - a comparison of the different oral and
written statements provided by Mr. Nyquist on the number of
acre feet of renewable river water he stated he has access to
and a review how different amounts of available water affect
the financial viability of building a water pipeline
• I will not provide a review of Sample Plan #3 at this time.
Sample Plan #1 - Analysis of Cash Flow Assumptions
The approach Mr. Nyquist seems to be taking to fund an
endeavor of this nature is to raise capital through revenue
bonds and then require those who receive services to pay off
those bonds. According to the 3rd Amendment document that
monies can be raised by " ... that subdivision's own special
district imposes ad valorem property taxes and fees to secure
the bonds issued for the benefit of that subdivision's
residents." (p8) In Exhibit F, Sample Finance Plan #1 -
Cashflow Schedule (p2), Mr. Nyquist uses the example of a
Bond Mill Levy of 40 and an Operating Mill Levy of 10 in
addition to other fixed fees as revenue sources to pay back
the bond holders.
What does a 50 mill levy increase mean to a home owner in
Elizabeth, Colorado? In looking at the 2010 taxes paid by an
Elizabeth, Colorado homeowner on a 35 acre plot with a
house and other structures, with an appraised value of
$28,800, that homeowner will pay 81.706 mills for a total of
In applying Mr. Nyquist's example of adding 50 mills for a new
total mill levy of 131.706, the homeowner will now pay $3,793.
This is an increase of 61.2%. This does not include other
possible fees such as connection fees, usage fees, etc.
(Please see spreadsheet: Review of Service Plan #1.)
If you have any questions on this, ask someone who lives in
the Wild Pointe development how many extra mill they pay
over what other Elizabeth homeowners pay.
If I was an Elbert County Commissioner, I would require a
detailed financial analysis of the financial impact of this
project on the specific communities Mr. Nyquist plans to
provide services to. In my opinion, the financial analysis
provided does not meet that standard.
Sample Plan #2 - Building a Water Pipeline
During the July 13, 2011 Elbert County BOCC meeting Mr.
Nyquist responded to my question, "How much water are we
talking about?" by stating that he had 10,000 acre feet of
Arkansas River senior water rights. The contrast is that in
reviewing the Sample Finance Plan #2's Schedule of
Cashflows (p2) in Exhibit F, Mr Nyquist uses 15,000 (not
10,000) acre feet as the brake-even point he needs to sell
each year to pay back the bond holders and make a profit.
According to the assumptions of the "Schedule of
Cashflows" spreadsheet, at 10,000 acre feet sold in a given
year, with the sale price of either $7.20 or $8.50 per 1,000
gallons, a multi-million dollar loss will result each year.
Mr. Nyquist must sell at least 15,000 acre feet of water each
year for the life of the bond, or else additional fees or mill
levies must be imposed to cover the bond repayment.
(Please see spreadsheet: Review of Service Plan #2.)
The Cost of Confusion
Mr. Nyquist states one number in public, but uses a different
number in the calculations he provided in his proposal to the
BOCC. If a person is inconsistent with the information he
provides, it does not bode well in creating faith and trust in
either that speaker or his proposal. To dispel this confusion,
Mr. Nyquist should provide DOCUMENTED PROOF of
ownership of each drop of water that he intends to move
through this proposed pipeline.
If I were an Elbert County Commissioner, I would require this
proof before I made a decision.
Go to the Elbert County BOCC meeting on Wednesday August 24,
at 9 A.M. at the Elbert County Fairgrounds.
Let your voices be heard. It is the American Way.
MBA Healthcare Administration
MS Healthcare Finance
1"The service area of the District is intended to exceed the
District's boundaries and the District shall be authorized to
provide water and sewer improvements, facilities and service
to property located without its boundaries on a regional and
statewide basis [bold face added] as demand for such
improvements, facilities and service requires." - Third
Amendment to Service Plan for Elbert and Highway 86
Commercial Metropolitan District (p7).
by Jim Whistler