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<br />.. <br /> <br />Riverside Irrigation District <br />May 16-17, 2006 <br /> <br />Agenda Item 11b <br /> <br />Creditworthiness: RID has an existing "bridge" loan with the Bank of Colorado in Brush. The <br />amount of this loan is $1,387,625 due and payable on February 8, 2007. This loan would be paid <br />off with the CWCB loan. <br /> <br />Table 2 shows the Financial Ratios and indicates overall strong ability to repay the $1,450,000 <br />CWCB loan, with annual assessment levy raised from $10 to $13.40 per acre. <br /> <br />Table 2. Financial Ratios <br /> <br />Financial Ratio Without With the project <br /> the project Future Year- <br /> (A ver. 2003-04) (2007+) <br />Operating Ratio (revenue/expense) <br />weak: less than 100% 107% 129% <br />average: 100% - 120% (aver.) (strong) <br />strong: greater than 120% <br />Debt Service Coverage Ratio <br />(revenues-expenses)/debt service N/A* 264% <br />weak: less than 100% (strong) <br />average: 100% - 125% <br />strong: greater than 125% <br />Cash Reserves to Current Expense <br />weak: less than 50% 102% 87% <br />average: 50% - 100% (strong) (aver.) <br />strong: greater than 100% <br />Annual Operating Cost per Acre-Ft. (41,500 AF) <br />w~ak~ greater tl1.,m$20 ... $t5.80 $18.70 <br />average: $10 - $20 (aver.) (aver.) <br />strong: less than $10 <br /> <br />* Value is not applicable (N/A) since RID has no existing debt. <br /> <br />Collateral: As security for the loan, the RID will pledge their annual assessment levy revenues. <br />This is in compliance with CWCB Loan Policy #5 (Collateral). <br /> <br />Recommendation <br /> <br />Staff recommends a loan not to exceed $1,464,500 ($1,450,000 for project costs and $14,500 for <br />the 1% Loan Service Fee in accordance with CWCB Loan Policy #16), to the Riverside Irrigation <br />District from the Severance Tax Trust Fund Perpetual Base Account, for permanent financing of the <br />acquisition of 46 Private Rights in the Riverside Reservoir and Land Company (RRLC). The <br />recommended terms of the loan are 30 years at 2.50 % per annum. Security for the loan will be a <br />pledge of Riverside Irrigation District annual assessment levy revenues. <br /> <br />Staff further recommends that final approval of the loan be conditioned upon all other standard <br />contracting provisions of the CWCB <br /> <br />cc: Don Chapman, Superintendent, Riverside Irrigation District <br />Brent Nation, P.E., Nation Engineering Services, Fort Morgan, CO <br />Amy Stengel, AGO <br /> <br />Attachment <br /> <br />Action Taken bv the CWCS on Mav 16. 2006 <br />The CWCB approved the Staff Recommendation. <br /> <br />Page 5 of 5 <br />