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<br />Highland Ditch Company <br />November 8,2005 (Revised November 17,2005) <br />Page 4 of 4 <br /> <br />Agenda Item 23a <br /> <br />Table 2 shows the Financial Ratios for the Company to be Average. The share assessment will <br />increase from $100/share in 2004 to $150/share in 2005. <br /> <br />Table 2. Financial Ratios <br /> <br />Financial Ratio Without Project With Project <br />Previous Years Future Years <br />Operating Ratio (revenues/expenses) 100% 104% <br />I weak: <100% I-I average: 100% - 120% ~ -I strong: >120%1 (Average) (Average) <br />Debt Service Coverage Ratio 40% <br />(revenues-expenses )/debt service N/A (Weak) <br />I weak: <100% 1- I average: 100% -120% 1- I strono: >120%1 <br />Cash Reserves to Current Expenses 73% 66% <br />I weak: <50% I-I average: 50% - 100% I-I strong: >1 ooo/~ (Average) (Average) <br />Annual Operating Cost per Acre-Ft Delivered* $11.10 $12.00 <br />\weak: >$20 I-I average: $10 - $20 I-I strong: <$1 ~ (Average) (Average) <br /> <br />. Calculation based on an annual average of 32,550 acre-feet delivered by the Company <br /> <br />Collateral: As security for the CWCB loan, the Company will pledge assessment revenues backed <br />by an assessment covenant and the physical structures associated with the Project. This security is <br />in compliance with CWCB Loan Policy #5 (Collateral). <br /> <br />Staff Recommendation <br /> <br />Staff recommends a loan not to exceed $545,400 ($540,000 for project costs and $5,400 for the 1 % <br />Loan Service Fee) to the Highland Ditch Company, from the Severance Tax Trust Fund Perpetual <br />Base Account for engineering and construction costs associated with the Foothills Reservoir Dam <br />Repair Project, and to pay expenses already incurred. The terms of the loan shall be a 20-year loan <br />at 2.25% per annum. Final approval of the loan shall be conditioned upon all standard contracting <br />provisions of the CWCB Loan Program. Security for the loan shall be collateral in compliance with <br />CWCB Loan Policy #5. As a condition of the loan the staff further recommends that the Borrower <br />shall use the first loan disbursement under this Contract to repay the total principal and interest due <br />on the bridge loan. <br /> <br />Action Taken bv the CWCS on November 16. 2005 <br /> <br />The CWCS approved the staff recommendation as written above. <br /> <br />Email copy: <br /> <br />Robert Schlagel President c/o Jill Baty, Office Manager <br />Duane Smith, PE, Smith Geotechnical <br />Amy Stengel, AGO <br /> <br />Attachment: Water Project Construction Loan Program - Project Data Sheet <br />