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<br />~ <br /> <br />Financial Analvsis <br /> <br />The total estimated cost of the project is $342,000. The District is requesting a Small Project <br />Loan of $100,000 (approximately 30 % of the estimated total project cost.) The SHWCD has <br />already paid $100,000 in cash and will use existing cash reserves in the amount of $144,000 to <br />make up their 70% cost share of $ 242,000. <br /> <br />A review of the District's three most recent financial statements is shown in Table 1. <br />The SHWSD has no existing debt. <br /> <br />Item 1997 1996 1995 Average <br />Op. Revenue $77,794 $81,213 $76,993 $78,667 <br />Other Revenue $38,020 $25,785 $32,673 $32,159 <br />Total Revenue $115,814 $106,998 $109,666 $110,826 <br />Op. Expense(1) $75,448 $86,832 $98,657 $86,979 <br />Net Income $40,366 $20,166 $11,009 $23,847 <br />OR/DE 1.03 0.94 0.78 0.92 <br />Cash Reserves $403,937 $387,019 $373,765 <br />Investments $108,646 $146,724 $139,460 <br /> <br />(1) Less Depree. <br /> <br />A $100,000, 20-year loan will result in annual payments of about $8,000 and a debt service <br />coverage ratio of about 3.0. <br /> <br />Staff proposes the Municipal High Income lending rate of 5.0 percent for a 20-year loan. This is <br />based on a 1990 Median Household Income in Douglas County of $51,718 and $38,045 in Castle <br />Rock. <br /> <br />The total project cost of $340,000 represents $4,300 per acre-foot of water delivered. Debt per <br />tap will amount to about $900. <br /> <br />When the project is completed, the average monthly water and sewer bill will be $_ per <br />household. This compares well with the statewide average of $_. <br /> <br />Alternative Sources of Financine <br /> <br />The SHWSD is not eligible for financing through the Drinking Water Revolving Fund of the <br />Colorado Water Resources and Power Development Authority. USDA Rural Development <br />would be unable to provide financing until after October 1999. Commercial bank financing <br />would likely result in a five-year loan term and a lending rate of seven to eight percent. <br /> <br />The current quarterly water rate structure of $70 for the first 18,000 gallons, $0.75 per 1000 <br />gallons from 18,000 to 100,000 gallons, and $1.25 per 1000 gallons thereafter roughly equates to <br />a quarterly water bill of $101, of about $34 per month. (Quarterly water use averages 60,000 <br /> <br />3 <br />