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<br />Terrace Irrigation Company <br />March 17, 2004 <br /> <br />Agenda Item 25e. <br /> <br />Financial Ratio Without With <br /> the pro;ect the project <br />Operating Ratio (revenue! expense) 95% 103% <br />weak: less than 100% (weak) (average) <br />average: 100% - 120% <br />strong: greater than 120% <br />Debt Service Coverage Ratio 92% 101% <br />(revenues-expenses)!debt service (weak) (average) <br />weak: less than 100% <br />average: 100% - 125% <br />strong: greater than 125% <br />Cash Reserves to Current Expense 98% 85% <br />weak: less than 50% (average) (average) <br />average: 50% - 100% <br />strong: greater than 100% <br />Annual Cost per Ac-Ft diverted (15,339 ac-ft) $12 $12.79 <br />weak: greater than $20 (average (average) <br />average: $10 - $20 <br />strong: less than $10 <br /> <br />Table 3. Financial Ratios <br /> <br />As security for the loan, the TIC will pledge assessment revenues backed by an assessment <br />covenant, and the project itself, sufficient to assure repayment of the loan. This security is in <br />compliance with CWCB Loan Policy #5 (Collateral). <br /> <br />RECOMMEDATION <br />Staff recommends a CWCB Small Project loan from the Severance Tax Perpetual Base Account <br />in an amount up to $245,430 ($243,000 for project costs and $2,430 for the 1 % loan origination <br />fee, in accordance with CWCB Loan Policy 16) to the Terrace Irrigation Company. The loan is <br />for up to 90% ofthe cost to rehabilitate Terrace Reservoir and to repay project costs already <br />incurred. The recommended term ofthe loan is 30 years and the recommended interest rate is <br />2.5% (2.556% Annual Percentage Rate.) Security for the loan will be a pledge of assessment <br />revenues backed by an assessment covenant, and the project itself, adequate to assure repayment <br />of the loan, in accordance with CWCB Loan Policy #5. <br /> <br />Staff further recommends that final approval of the loan be conditioned upon all standard <br />contracting provisions of the CWCR <br /> <br />ACTION TAKEN BY THE CWCB ON MARCH 17.2004 <br />Board approved staff recommendations. <br /> <br />4 <br />