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Greeley Irrigation Company January 23-24, 2007 Agenda Item 9;3 Debt Service Coverage Ratio (revenues-expenses)/debt service N/A* 103% weak: less than 100% (aver.) average: 100% - 125% strong: greater than 125% (347K-221K/122K) Cash Reserves to Current Expense weak: less than 50% 27% 10% average: 50% - 100% (weak) (weak) strong: greater than 100% (30K/113K) (35K/342K) Annual Operating Cost per Acre-Ft. (18,000AF) weak: greater than $20 $6.25 $19.00 average: $10 - $20 (strong) (aver.) strong: less than $10 , (113K/18K) (344K/18K) * Value is not applicable (N/A) since GIC has no existing debt. The assessments for the years 2003 to 2006 are summarized as follows. Year 2006 2005 Year 2004 2003 Assessment $150 $125 Assessment $ 250 $ 150 . The ratio of Cash Reserves to Current Expense is in the weak category, but it is fairly typical practice for ditch companies, and other irrigation organizations, not to carry large cash reserves . from year to year. Collateral- As security for the loan, the GIC will pledge its annual assessment revenues backed by an assessment rate covenant. This is in compliance with CWCB Loan Policy #5 (Collateral). Recommendation IStaff recommends that the Board approve a loan not to exceed $2,233,867 ($2,211,750 for project Icosts and $22,117 for the 1 % Loan Service Fee in accordance with CWCB Loan Policy #16), to the 'Greeley Irrigation Company from the Severance Tax Trust Fund Perpetual Base Account, to rehabilitate and upgrade the Greeley Canal NO.3. The recommended terms of the loan are 30 ~ears at 2.85% per annum. Security for the loan will be a pledge of assessment revenues backed by an assessment rate covenant. btaff further recommends that final approval of the loan be conditioned upon all other standard bontracting provisions of the CWCS. bc: Clifford Clift, President, Greeley Irrigation Company Richard Belt, P.E., P.H., Aqua Engineering, Inc. Amy Stengel, AGO Attachment 60f6 .