C150205 Approval Letter - Laserfiche WebLink

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Number Six Ditch Company Agenda Item 6b July 12, 2005 Page 3 of 4 The loan request is based on the total design and construction cost estimate for the Project. However engineering design and construction oversight may be provided by NRCS as in-kind services. Design is to be complete by midsummer 2005. Construction is expected to begin October 2005 and to be completed in phases during 2005 and 2006. Financial Analvsis Table 1 shows a summary of the funding sources for the project. The total estimated cost of the project is $688,942. The construction will be funded by NRCS at 75% after the Project is completed. Therefore, the initial loan amount (during construction) is $688,942, based on 100% ofthe estimated total Project cost. The loan will be reduced to $258,353 after the Project is complete and the Company receives funds for 75 percent of the construction costs ($430,589) from NRCS. Table 1. Project Funding Sources Funding Source Grant Loan Initial Loan Phase NRCS Construction Cost Share - - CWCB Loan - $688,942 Company - - Total ($688,942) $ $688,942 Post-Construction Loan Phase NRCS Construction Cost Share $430,589* - CWCB Loan $258,353 Company - - Total ($688,942) $430,589 $258,353 * Received after construction is complete from NRCS Salinity Control Funds. Table 2 shows a summary of the financial aspects of the Project. A CWCB Loan of $258,353 will have an annual payment of $16,458 ($12,344 for the annual loan payment and $4,114 for the reserve account during the first three years - see loan conditions below) under the loan terms of 2.50% per annum for 30-years. Not considering the loan reserve, the annual loan payment represents a loan cost of $4.76 per acre-foot for the Project based on an average annual delivery of 2,591 AF of water. Since all other funding for the Project is in the form of NRCS grants, the Company would have no other debt service on this Project. Table 2. Financial Summary of Project Total Proiect Cost $688,942 Project Construction Cost $574,118 CWCB Post-construction Loan Amount $258,353 Annual Loan Payment Amount $12,344 Annual Loan Obligation (including debt reserve funding) $16,458 Annual Project Cost per acre-foot (based on 2591 acre-ft) $4. 76/ac-ft Creditworthiness: The Company was incorporated in January of 2004 for the purpose of undertaking the Project and therefore has very little financial history. The Company has no existing debt. Repayment will be accomplished by member assessments according to the Company's Funding Agreement. Table 3 shows the Financial Ratios for the Company. The Company proposes to assess the funding members $1 ,627/cfs for the first three years to cover the CWCB Loan and maintenance costs (estimated at $1,200) and 1 ,248/cfs after three years.