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Bill Porter- Barton Porter Reservoir Seplemtler 11-12. 2002 Agenda Item 12b. (Updated September 17, 2002) Table 1. Financial Summary Proiect Cost 52,000,000 Number of Owners 1 Number of Shares of Stock NIA CWCS Loan Amount 51,000,000 CWCS Loan Pavment (includes 10% reserve) 570,562 Annual Loan Cost per acre-foot (New total volume: 1,100 ac-ft.) 564 Credit worthiness: Bill Porter has existing debt with the First National Bank of the Rockies, in Meeker. The bank president provided a letter of reference indicating that, over the past five years, all loan payments have been made as agreed. Table 2 shows the Financial Ratios for Bill Porter and indicates two ratios in the strong category and two in the weak category with the 51,000,000 CWCB loan in place. Table 2. Financial Ratios.Ranching Operation Financial Ratio Without With The oroiecf The nroject Operating Ratio (revenue/expense) 212% 179% weak.: less than 100% (strong) (strong) average: 100%.120% stron';: nrealer than 120% Debit Service Coverage Ratio 587% 302% (revenues-expenses)/debt service (strong) (strong) weak: less Ihan 100% average: 100%.125% strona"": areater than 125% Cash Reserves to Current Expense 40% 21% weak: less than 50% (weak) (weak) average: 50% . 100% strona: "'realer than 1 00% Annual Cost per Acre-Foot (1,100 ac-It) S 12 $61 weak: greater than 520 (average) (weak) average: 510 - $20 slrona: less than $10 As security for the loan Bill Porter will pledge the reservoir, all private land upon which it is located, and the water rights to fill the reservoir. He will also pledge additional real estate such that total collateral value equals or exceeds the loan amount. All values will be supported by an opinion of value from a certified appraiser. This collateral is in compliance with CWCS Loan Policy #5 (Coilateral). Recommendation Staff recommends a loan from the Small Project Account not to exceed 51,000,000 to Bill Porter to rehabilitate and enlarge the Barton Porter Reservoir. The recommended term of the loan is 20 years and the recommended lending rate is 2.5%. Security for the loan will be the reservoir, all private land upon which it is located, and the water rights to fill the reservoir aM oddition31 rOJI ostate such that total collateral value is 51,000,000. All values will be supported by an opinion of value from a certified appraiser. Staff further recommends that final approval of the loan be conditioned upon all other standard contracting provisions of the CWCB. 3