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<br />The PRBDC is requesting a 30-year loan from the CWCB. The standard agricultural lending rate <br />would be 2.75%, resulting in annual payments of $9,877. To this would be added $988 per year <br />for the first 10 years to fund the emergency reserve account, for a total annual cost of $10.865. <br />Table 3 is a summary of the financial aspects of the project. Annual assessments will increase <br />from $7.25 per share, up to $12.80 per share with a Loan of $200,000. This represents an <br />annual assessment increase of $5.55, or $1.22 per acre-foot, based on average annual <br />diversions 8,866 acre-feet. <br /> <br />Table 3. Financial Summary <br /> <br />Project Cost $267,000 <br />Loan Amount (75% of Project Cost) $200,000 <br />CWCB Loan Payment Amount, including 10% loan reserve $10,865 <br />Number of Shareholders 51 <br />Number of Shares of Stock 1952 <br />Current Assessment per Share $7.25 <br />Future Assessment per Share $12.80 <br />Annual Project Cost per acre-foot $1.22 <br />(AveraQe annual diversions: 8,866 acre-feet) <br /> <br />Since all other funding for the project is in the form of grants, the Company would have no other <br />debt service on this project. Operation and maintenance costs are expected to decrease with <br />the new diversion structure, and can be accommodated by the Company's existing budget. <br /> <br />Credit worthiness: PRBDC has no existing debt. Table 4 shows the Financial Ratios for the <br />PRBDC and indicates average to strong ability to repay with the project in place. <br /> <br />Table 4. Financial Ratios <br /> <br /> <br />Financial Ratio <br />Operatin Ratio (revenue/ex ense <br />Debit Service Coverage Ratio <br />revenues-ex enses /debt service <br />Cash Reserves to Current Expense <br />Annual Cost per acre-foot <br />8,866 acre-feet diverted. <br /> <br />Alternative financing considerations: The PRBDC has investigated alternative financing / <br />sources. They have obtained an in-kind grant from the NRCS for engineering design and <br />construction inspection. The PRBDC attempted to obtain other grants, but found the current <br />economic situation had either eliminated or severely decreased available grant funding. <br /> <br /> <br /> <br />221% <br />$1.44 <br /> <br /> <br />119% <br />$2.67 <br /> <br /> <br />Collateral: As security for the CWCB loan, the PRBDC can pledge assessment income, the <br />project structures, and a certificate of deposit equivalent to one annual payment. <br /> <br />PRB Ditch Company <br />Siphon Replacement Feasibility Study <br />May 2003 <br /> <br />Page 14 of 15 <br />