BOARD00104 ‎(2)‎

• Board Meeting Date: 1/23/2007
• Description: CF Section - New Loans - Town of DeBeque - Irrigation System Improvements Project
• Board Meetings - Doc Type: Memo

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Town of DeBeque
January 23-24. 2007
Page 3 of 4

Agenda Item 9d

Financial Analvsis

Table 1 shows a summary of the financial aspects of the loan request. The Town qualifies for a
Low-Income Municipal interest rate of 3.25% for 30-years. The Town will finance approximately 70%
of the total estimated Project cost through a CWCB loan. CWCB shall make progress payments at a
rate of 70% of project invoices up to the maximum loan amount of $250,000. The remaining costs
will be paid by Bluestone Irrigation District and Town reserves.

Table 1. Financial Summary

PROJECT/LOAN
Total Project Cost $370,000
CWCB Loan (70% rounded of Total Proiect Cost) $250,000
CWCB Annual Loan Payment $13,200
CWCB Loan Obliaation (includino 10% debt reserve funding) $14,520
Monthly Per Tap Cost of CWCB Loan $4.80/tap
Total Project Debt per Tap (250 taps) $1,000/tap
TOWN Current Future
Average Monthly Water Bill $23/month $23/month
Average Monthly Irrigation Service Bill $2.00/month $6.25/month

Creditworthiness: The Town's Irrigation System Enterprise Fund is a newly created enterprise and
therefore has no financial history and no outstanding long-term debt.

Table 2 shows the Financial Ratios for the Town of DeBeque. The ratios indicate the enterprise will
have the ability to repay the CWCB loan, with the irrigation system rates proposed.

Table 2. Financial Ratios

Financial Ratio Current With Project
Future Years
Operating Ratio (revenues/expenses) N/A 123%(Strong)
I weak: <100% I-I average: 100% - 120% I-I strong: >120%' $4.3K/3.5K
Debt Service Coverage Ratio N/A 1 06%(Average)
(revenues-expenses )/debt service
I weak: <100% 1- I averaQe: 100% - 120% 1- I stronq: >120%1 $119-4K/15K
Cash Reserves to Current Expenses N/A 34%(Weak)
I weak: <50% , - I average: 50% - 100% 1- I strong: >100%1 $1.2K/3.5K
Debt per Tap (based on 250 taps) N/A $1,OOO(Strong)
Iweak: >$5000 I-I average: $5K - $2.5K ~ -I strong: <$25001 $250K/250taps

Collateral: Security for the CWCB loan will be a pledge of Irrigation System Enterprise Fund
revenues backed by a rate covenant and annual financial reporting per CWCB Financial Policy.