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<br />Lower Sacramento Creek Reservoir Company <br />March 15,2005 (Revised March 24, 2005) <br />Page 4 of 4 <br /> <br />Agenda Item 14a <br /> <br />Creditworthiness: The Company has no other debt. Repayment of the loan will be accomplished by <br />increasing share assessments as necessary. <br /> <br />Table 3 shows the Financial Ratios for the Company to be Average to Strong. The Company adjusted <br />the assessment rates in 2002 to cover engineering costs associated with the Project. The share <br />assessment is estimated to increase from $2.00/share to $9.22/share. This increase equates to an <br />annual charge of $28 per Lot augmented by the Company (Based on an average of 3.0 shares per Lot), <br />or $2.33 per month. <br /> <br />Table 3. Financial Ratios <br /> <br />Financial Ratio Without Project With Project <br />Previous Years Future Years <br />Operating Ratio (revenues/expenses) 250% 1,113% <br />I weak: <100% I-I average: 100% - 120% , -I strong: >120%1 (Strong) (Strong)* <br />Debt Service Coverage Ratio 100% <br />(revenues-expenses )/debt service N/A <br />I weak: <100%1- raverage: 100% - 120% 1- I strona: >120%. (Average) <br />Cash Reserves to Current Expenses 783% 84% <br />I weak: <50% I-I average: 50% - 100% I-I strong: >100%1 (Strong) (Average) <br />Average Monthly Charge per Lot (Assume 3 shares/Lot) $0.50** $2.33** <br />!weak: >$60 I-I average: $10 - $60 I-I strong: <$1~ (N/A) (N/A) <br /> <br />'This percent is very high due to the Company's low operating cost ($3,000) compared to the future debt service ($29,392) <br />" These costs are not applicable since the Lot owner also has O&M costs for the individuals well that is not included <br /> <br />Collateral: As security for the CWCB loan the Company will pledge assessment revenue and the <br />Lower Sacramento Creek Reservoir. This security is in compliance with CWCB Loan Policy #5 <br />(Collateral). <br /> <br />Staff Recommendation <br /> <br />Staff recommends a loan not to exceed $375,013 ($371,300 for project costs and $3,713 for the 1% <br />Loan Service Fee) to the Lower Sacramento Creek Reservoir Company for engineering and <br />construction costs associated with the Lower Sacramento Creek Reservoir Rehabilitation Project, from <br />the Construction Fund. The terms shall be based on the current middle-income municipal rate of 3.75% <br />per annum for a 20-year loan. Final approval of the loan shall be conditioned upon all standard <br />contracting provisions of the CWCS Loan Program. Security for the loan shall be collateral in <br />compliance with CWCB Loan Policy #5. <br /> <br />Action Taken bv the CWCB on March 22. 2005 <br />The Colorado Water Conservation Board approved the Staff Recommendation as written above. <br /> <br />Email copy: <br /> <br />William Blatchley, Company Secretary/Treasurer and Manager <br />Amy Stengel, AGO <br /> <br />Attachment: Water Project Construction Loan Program - Project Data Sheet <br />