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<br />. <br /> <br />. . <br /> <br />Town of Hillrose <br />July 20-21, 2004 <br /> <br />Agenda Item 14b <br /> <br />Table 2. Financial Ratios <br /> <br />Financial Ratio Without With project <br /> the project Future Years <br /> (Aver. 2001-03) <br />Operating Ratio (revenue/expense) <br />weak: less than 100% 99% 132% <br />average: 100% -120% (weak) (strong) <br />strong; greater than 120% <br />Debt Service Coverage Ratio <br />(revenues-expenses )/debt service 198% <br />weak: less than 100% N/A (strong) <br />average: 100% - 125% <br />strona: areater than 125% <br />Cash Reserves to Current Expense <br />weak: less than 50% 68% 34% <br />average: 50% - 100% (aver) (weak) <br />strona: areater than 100% <br />Debt per Tap (112 taps) <br />weak: greater than $5000 $0 $613 <br />average: $2500 - $5000 (strong) (strong) <br />strona: less than $2500 <br />Monthly Water Bill <br />average: $30 $14.50 $24.50 <br />weak: greater than $60 (aver.) {aver.} <br /> <br />Security - As security for the loan the Town will pledge Water Enterprise Fund revenues. backed by <br />a rate covenant and annual financial reporting. This is in compliance with CWCB Loan Policy #5 <br />(Collateral). In accordance with CWCB Loan Policy #8 (Purchase of Water Rights), a written ~ <br />appraisal or opinion of value from a qualified water rights appraiser supporting the purchase price, <br />must be submitted, prior to disbursal of CWCB loan funds. <br /> <br />Recommendation <br /> <br />Staff recommends a loan not to exceed $69,311 ($68,625 for project costs and $686 for the 1 % Loan <br />Service Fee in accordance with CWCB Loan Policy #16). to the Town of Hillrose, acting by and <br />through its Water Enterprise Fund, from the Severance Tax Trust Fund Perpetual Base Account, to <br />purchase surface water rights to use for well augmentation, and to pay expenses already incurred. <br />The recommended terms of the loan are 30 years at 3.5% per annum. Security for the loan will be a <br />pledge of enterprise fund revenues. <br /> <br />Staff further recommends that final approval of the loan be conditioned upon all other standard <br />contracting provisions of the CWCB <br /> <br />cc: Lynn Golemboski, Town Clerk and Administrator, Town of Hillrose <br />Brent Nation, P.E., Fort Morgan <br />Linda Bassi, AGO <br /> <br />Attachment <br /> <br />Action Taken bv the CWCS on Julv 21. 2004 <br />The CWCB approved the Staff Recommendation. <br /> <br />Page 4 of 5 <br /> <br />