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Greeley and Loveland Irrigation Company - Boyd Lake Spillway November 19-21, 2003 Agenda Item 8d Note: A recent history of annual assessments and proposed assessments is as follows: 1999 $ 160 2002 $200 2000 $ 1 00* 2003 $200 2001 $170 *Year 2000 assessments were lowered for one year to reflect receipt of approx. $100,000 from the sale of recreation rights on Boyd Lake.. Creditworthiness: The GLlC currently has two outstanding CWCB loans, anApril1998 loan for $23,400, with a remaining amount of $12,634 and an annual payment of $2,778 through 2008; and a May 1999 loan for $308,000, with a remaining amount of $275,765 and an annual payment of $18,269 through 2028. Annual payments on both loans total $21,047. Table 2 shows the Financial Ratios and indicates, with the exception of cash reserves, average to strong ability to repay the $2,844,000 CWCB loan, with annual assessments raised to $308. Table 2. Financial Ratios Financial Ratio Without With project the project Future Year (Aver. 2000-02) 2006+ Operating Ratio (revenue/expense) weak: less than 100% 101% 134% average: 100% - 120% (aver.) (strong) strena: areater than 120% Debt Service Coverage Ratio (revenues-expenses )/debt service 297% 121% weak: less than 100% (strong) (aver.) average: 100% - 125% strena: areater than 125% Cash Reserves to Current Expense weak: less than 50% 39% 29% average: 50% - 100% (weak) (weak) strena: areater than 100% Annual Operating Cost per Acre-Ft. (37,812 AF) weak: greater than $20 $13.15 $17.35 average: $10 - $20 (aver.) (aver.) strena: less than $10 While the ratio of Cash Reserves to Current Expense is in the weak category, it is fairly typical practice for ditch companies not to carry large cash reserves from year to year. The GLlC ratio is favorable when considering that a more typical ratio for an irrigation companies is 10 to 15%. As security for the loan the GLlC will pledge assessment revenues backed by an assessment covenant and the project itself. This is in compliance with CWCB Loan Policy #5 (Collateral). Recommendation Staff recommends a CWCB Small Project Loan, not to exceed $2,844,000 ($2,815,842 for project costs and $28,158 for the 1 % Loan Service Fee, in accordance with CWCB Loan Policy #16). to the Greeley and Loveland Irrigation Company from the Construction Fund to construct a new spillway at Boyd Lake The recommended term of the loan is 30 years and the recommended lending rate is 3.00% per annum. Security for the loan will be a pledge of assessment revenues backed by assessment covenant and the project itself. Page 5 of 7