BOARD00152 ‎(2)‎

• Board Meeting Date: 3/13/2007
• Description: CF Section - Construction Fund and Severance Tax Trust Fund Perpetual Base Account New Loans - Lower Poudre Augmentation Company - Reservoir and Water Rights Purchase
• Board Meetings - Doc Type: Memo

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Lower Poudre Augmentation Company
March 12-13, 2007

Agenda Item 16a

Table 1 is a summary of the financial aspects of the project. A CWCS Loan of $3,073,320
would have an annual payment of $161,520 (including the 10% reserve requirement) at the loan
terms of 2.50% for 30 years.

Table 1. Financial Summary

Project Cost $ 3,414,800
Number of Well Owners 35
Number of Wells Covered 88
CWCS Loan Amount (30 years) $3,073,320
CWCS Loan Payment (includes a 10% reserve) $161,520
Current Well User Charge per AF depletion (2006) $135
New Well User Charqe per AF depletion (3,217 AF) $166
Annual Loan Cost per acre-foot (657ac-ft. reservoir capacity) $246

Creditworthiness: LPAC has no existing debt.

Table 2 shows the Financial Ratios and indicates overall average ability to repay the $3,073,320
CWCS loan, with the increased well augmentation fees and reduced rental water/other costs.

Table 2. Financial Ratios

Financial Ratio Without With project
the project Future Year
(Aver. 2005-06) 2008+
Operating Ratio (revenue/expense)
weak: less than 100% 104% 144%
average: 100% - 120% (aver.) (strong)
strong: greater than 120%
(438K1427K) (535K1372K)
Debt Service Coverage Ratio
(revenues-expenses )/debt service N/A* 101%
weak: less than 100% (aver.)
average: 100% - 125%
strong: greater than 125% (535K-372K1161.5K)
Cash Reserves to Current Expense
weak: less than 50% 5% ** 7%
average: 50% - 100% (weak) (weak)
strong: greater than 100%
(19K1427K) (35K1533.5K)
Annual Operating Cost per Acre-Ft. (3,217 AF)
weak: greater than $20 $133 $166
average: $10 - $20 (weak) (weak)
strong: less than $10
(427K13.2K) (533. 5K13. 2K)

* Value is not applicable (N/A) since LPAC has no existing debt.
** Does not include $117,789 in GASP disbursements in reserve.

Collatera/- As security for the loan, the LPAC will pledge its annual well augmentation fee
revenue backed by a rate covenant, and other company revenue; and the project itself,
including the Timnath Flatiron Reservoir and appurtenances, and 4.5 shares of Soxelder Ditch
Company, along with the Soxelder Ditch carriage agreement. Further, the Irrigating Company

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