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<br />. <br /> <br />. <br /> <br />. <br /> <br />... <br /> <br />BUREAU LOAN <br /> <br />The PR WCD entered into a 70-year contract with the Bureau in 1967 for repayment of <br />$6,435,600 in project costs. The current balance on the loan is $5,626,007. Annual payments to <br />the Bureau vary from about $20,000 to $140,000 per year and average $94,000 per year. The <br />formula for calculating the amount of the annual payments is complicated but is essentially based <br />on the percent of a full water supply available in any given year. <br /> <br />The Bureau has indicated that it may be willing to discount the loan and allow the District to <br />retire its obligation. The actual amount of the payoff is unknown at present but would probably <br />be somewhat less than $1.5 million based on the current yield of the 30-year Treasury Bond. <br />Actual authorization to allow the payoff would have to come from Congress or from the <br />Commissioner of Reclamation. The District may be able to contribute as much as $200,000 <br />toward the retirement of the debt. <br /> <br />FINANCIAL ANAL YSIS <br /> <br />The District obtains revenues from a district-wide mill levy, from assessments for operations and <br />maintenance expenses, and from assessments for payments on the Bureau loan. Table I gives <br />the District's total revenues, operating expenses, and USBR loan payments as taken from the <br />three most recent auditor's reports for calendar years 1993 through 1995. <br /> <br />Table 1. PRWCD Financial Analysis <br /> <br /> otal peratlng Debt ervlce <br />Year Revenues Ex ense Ratio <br />1995 $334,835 $206,615 0.92 <br />1994 $314,048 $181,240 0.95 <br />1993 $277,805 $247,203 0.41 <br /> <br />As Table 1 indicates, the District had an annual deficit in each ofthe three years ranging from <br />about $7,000 to $52,000. In each year, the debt service coverage ratio (a measure of the extent to <br />which revenues are adequate to cover debt service) was less than one, which is considered the <br />minimum level of coverage. <br /> <br />Table 2 gives an analysis of the estimated impacts on the District of a 30-year and a 40-year <br />Construction Fund loan for $1.5 million at 3.75 percent (the Board's agricultural lending rate for <br />1997). The table shows the estimated reduction in the amount of the annual payment, the annual <br />deficit for the District, and resulting debt service coverage ratio if the Bureau loan were replaced <br />by a Construction Fund loan in the years 1993 through 1995. The table indicates significant <br /> <br />2 <br />