C150115 Approval Letter

• Contract/PO #: C150115
• Contractor Name: Riverside Ditch and Allen Extension Company, The
• Contract Type: Loan
• Water District: 11
• County: Chaffee
• Bill Number: MC3
• Loan Projects - Doc Type: Approval Letter

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Riverside Ditch and Allen ExtensIon Company
July 23-24, 2002

Agenda Item 19b.
(Updated July 25, 2002)

Table 2. Financial Summa
Pro'ect Cost $67,000
Number of Shareholders 18
Number of Shares of Stock 1450
CWCS Loan Amount $50,000
CWCS Loan Pa ment includes 10% reserve $2716
Current assessment er share $2.00
Newassessment er share $3.90
Annual Loan Cost er acre-foot Avera e diver5ions 4,000 ac-ft. $0.68
Creditworthiness: The RDAEC has no existing debt. Table 3 shows the Financial Ratios for
the RDAEC and indicates average to strong ability to repay a $50,000 CWCS loan with the
project in place.

Table 3.
Financial Ratio

Financial Ratios
Without
the ro 'ect
105%
(average)

With
The ro ect
120%
(average)

Operating Ratio (revenue/expense)
weak: less than 100%
average: 100% .120%
stron : reater Ulan 120%
Debit Service Coverage Ratio
(revenues-expenses)/debt service
weak: less than 100%
average: 100% - 125%
stron : reater than 125%
Cash Reserves to Current Expense
weak: less than 50%
average: 50% - 100%
stron : reater than 100%
Annual Cost per Ac-Ft (4,000 ac-ft diverted)
weak: greater than $20
average: $10 - $20
stron : less than $10
As security for the loan the RDAEC will pledge assessment revenues backed..!2Y assessment
covenant and the project itself. This security is in compliance with CWCS Loan Policy #5
(Collateral).

No Debt
(strong)

138%
(strong)

404%
(strong)

262%
(strong)

$ 0.73
(strong)

$1.41
(strong)

Recommendation
Staff recommends a CWCS Small Project Loan in maximum amount of $50,000 to the
Riverside Ditch and Allen Extension Company for rehabilitation work on the Riverside Ditch and
Allen Extension. The recommended term of the loan is 30 years at 2.75% or 20 years at 2.5%
at the borrower's option. The security for the loan will be a pledge of assessment revenues
backed by assessment covenant and the project itself.

Staff further recommends that final approval of the loan be conditioned upon all other standard
contracting provisions of the CWCS.

Action taken bv the eWeB Julv 24. 2002
The CWCS approved the Staff Recommendation.

cc: Susan Miller, Riverside Ditch and Allen Extension Co., PO Box 892, Buena Vista, CO 81211
John Nelson, NRCS District Conservationist, 325 W. Rainbow, Salida, CO 81201
Linda Bassi. AGO '

Attachment
C:\WP51\Proj-New\RiversideDitch 702memo;

L:lboardmemlJuiy02\Agenda Item 19b July02 Riverside Ditch
3