BOARD00102 ‎(2)‎

• Board Meeting Date: 1/23/2007
• Description: CF Section - Construction and Severance Tax Trust Fund Perpetual Base Acct New Loans - Greeley Irrigation Co. - Greeley Canal No. 3 Rehabilitation
• Board Meetings - Doc Type: Memo

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Greeley Irrigation Company
January 23-24, 2007

Agenda Item 9a

2008. For those items not requiring engineering, a bid package will be immediately issued to
solicit competitive bids, with the intent to award a contract for this work in a timely fashion so
that some work could be completed before the canal becomes operational on April 15, 2007.

All easements and rights-of-way are already in effect and no new easements are anticipated,
except for the need to negotiate the canal realignment work with adjacent landowners.
Landowner negotiations would occur during the summer of 2007. The Company expects to be
exempt from 404 permitting, but this will be confirmed with the Corps of Engineers.

Financial Analvsis

The total estimated cost of the project is $2,457,500. Because the GIC share ownership is
76.3% agricultural (2.50%) and 23.7% municipal (3.25%), GIC qualifies for a blended interest
rate. All municipal shares are owned by the City of Greeley, which qualifies for the municipal
low-income interest rate. The blended rate based solely own GIG share ownership would be
2.65%, however, when the City of Greeley's 3/8ths ownership in the canal is included the
interest rate increases to 2.85%. Staff is recommending a maximum loan amount of
$2,211,750 (90% of the estimated project cost) for 30 years at an interest rate of 2.85%. GIC
will pay the 10% local share ($245,750) of the project cost from existing reserves and increased
assessments.

Table 1 is a summary of the financial aspects of the project. A CWGB Loan of $2,211,750
would have an annual payment of $121,732 (including the 10% reserve requirement) at the loan
terms of 2.85% for 30 years.

Table 1. Financial Summary

Proiect Cost $2,457,500
Number of Shareholders 149
Number of Shares of Stock 519.7
CWCB Loan Amount (30 vears) $2,211,750
CWCB Loan Payment (includes a 10% reserve) $121,732
Current Assessment per share (2006) $250
New Assessments oer share $485
Annual Loan Cost per acre-foot (aver. annual delivery: 18,000 AF.) $6.76

Creditworthiness: GIG has no existing debt.

Table 2 shows the Financial Ratios and indicates overall average ability to repay the $2,211,750
CWCB loan, with the increased assessments.

Table 2. Financial Ratios

Financial Ratio Without With project
the project Future Year
(A ver. 2003-05) 2010+
Operating Ratio (revenue/expense)
weak: less than 100% 137% 157%
average: 100% - 120% (strong) (strong)
strong: greater than 120%
(155K1113K) (34 7K1221 K)

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