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<br />Fulton Irrigation Ditch Company <br />March 17, 2004 <br /> <br />Agenda Item 25b. <br /> <br />FINANCIAL ANALYSIS <br />The total cost of the project is estimated at $200,000. Ofthe 7,185 shares of stock available in <br />the Company, 68% are currently being utilized for agricultural purposes, 26 percent for <br />municipal, and the remaining 6% for commercial. The municipal interest rate varies, , based on <br />the average household income for the city or county where the water is being used. Currently, <br />the municipal rate varies from 3.25% for low income to 4.25% for high income for a 20-year <br />term. Municipal users are City of Brighton, City of Commerce City, City of Fort Lupton, City of <br />Northglenn, City of Thomton, and the South Adams Water and Sanitation District. Based on the <br />income level for each municipality, and given the number of shares owned by each, a weighted <br />interest rate of 3.71 % was calculated for municipal use. This interest rate was then blended with <br />the agricultural rate of 2.25% and the commercial rate of 5.25%, based on the percentage of <br />shares for each category, from which an interest rate of2.8072 was calculated. Rounded to the <br />nearest tenth, the recommended interest rate for FIDC is 2.8% <br /> <br />Table 2 is a summary ofthe [mancial aspects ofthe project based on a $170,000 Colorado Water <br />Conservation Board Loan. The annual payment would be $12,338 (including a 10% reserve <br />requirement) at a loan term of2.8% for 20-years. Annual assessments will be increased from <br />$30 to $38 per share. This $8 assessment increase represents only $0.40 per acre-foot annual <br />loan cost, and based on average annual diversions of30,666 acre-feet. <br /> <br />a e , manCIa ummarv <br />Project Cost $200,000 <br />Loan Amount (85% of Project Cost) $170,000 <br />CWCB Loan Payment Amount, including 10% loan reserve $12,338 <br />Number of Shareholders 220 <br />Number of Shares of Stock 7,185 <br />Current Assessment per Share $30 <br />Future Assessment per Share $38 <br />Annual Loan Cost per acre-foot $0.40 <br />(Average annual diversions: 30,666 acre-feet) <br /> <br />T bl 1 F" " I S <br /> <br />Credit worthiness: FIDC has a short term loan for $100,000 from the South Adams County <br />Water and Sanitation District to assist in the initial funding of the project. This short term bridge <br />financing will be paid off by FIDC with Colorado Water Conservation Board loan funds. <br /> <br />Table 2 shows the Financial Ratios and indicates upon completion of the project, with the <br />exception of Cash Reserves, an average to strong ability to repay with the project in place. <br /> <br />Table 2" <br /> <br />Financial Ratios <br />Without <br />the ro "ect <br />64% <br />(weak) <br /> <br />With <br />the ro "ect <br />101% <br />( average) <br /> <br />Financial Ratio <br /> <br />Operating Ratio (revenue/expense) <br />weak: less than 100% <br />average: 100% - 120% <br />stron: eater than 120% <br /> <br />3 <br />