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, Upper Platte and Beaver Canal Company May 19-20, 2003 Agenda Item 18e (Updated May 27,2003) Credit worthiness: The UPBCC has an existing loan with the CWCB in original amount of $83,000, for rehabilitation of the Company's diversion structure. That loan was approved in 2002, and all payments have been made as agreed. Table 2 shows the Financial Ratios for the UPBCC and indicates, with the exception of cash reserves, strong ability to repay the new $67,500 CWCB loan with ,the project in place. Financial Ratio Without With the Droiect the Droiect Operating Ratio (revenue/expense) 129% 126% weak: less than 100% (strong) (strong) average: 100% - 120% strono: oreater than 120% Debt Service Coverage Ratio 263% 145% (revenues-expenses)/debt service (strong) (strong) weak: less than 100% average: 100% - 125% strena: areater than 125% Cash Reserves to Current Expense 28% 18% weak: less than 50% (weak) (weak) average: 50% - 100% strona: areater than 100% Annual Cost per Acre-Foot (32,500 AF) $ 3.75 $4.01 weak: greater than $20 (strong) (strong) average: $10 - $20 strono: less than $10 . Table 2. Financial Ratios } As security for the loan the UPBCC will pledge assessment revenues backed by assessment covenant and the project itself. This consists of a lease right of private property as described in "Recharge Site Lease Agreement" dated March 15, 2003, as well as the site improvements constructed as a part of this project. This security is in compliance with CWCB Loan Policy NO.5 (Collateral). Recommendation Staff recommends a Small Project Loan from the Construction Fund to the Upper Platte and Beaver Canal Company to construct a well augmentation project on Badger Creek. The maximum loan amount is $67,500 for up to 90% of the project cost, and the recommended loan terms are 10 years at 2.25%. (2.325% Annual Percentage Rate.) 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 standard contracting provisions of the CWCB, including the 1 % loan origination fee charged in accordance with CWCB Policy #16. The maximum loan amount may be increased to $68,175 if the borrower elects to finance the 1 % loan service charge. Action taken bv the CWCS Mav 20. 2003 The CWCB approved the Staff Recommendation. cc: Philip Mortensen, President, Upper Platte and Beaver Canal Company Brent Nation, P.E. Linda Bassi, AGO Attachment C:\Proj-New\UPBCC 503 memo; L:\boardmem\May03\ 18e - Upper Platte and Beaver 3