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<br />Greeley Irrigation Company <br />January 23-24, 2007 <br /> <br />Agenda Item 98 <br /> <br />Debt Service Coverage Ratio <br />(revenues-expenses )/debt service N/A* 103% <br />weak: less than 100% (aver.) <br />average: 100% - 125% <br />strong: greater than 125% (347K-221K/122K) <br />Cash Reserves to Current Expense <br />weak: less than 50% 27% 10% <br />average: 50% - 100% (weak) (weak) <br />strong: greater than 100% <br /> (30K/113K) (35K/342K) <br />Annual Operating Cost per Acre-Ft. (18,000AF) <br />weak: greater than $20 $6.25 $19.00 <br />average: $10 - $20 (strong) (aver.) <br />strong: less than $10 <br /> (113K/18K) (344K/18K) <br /> <br />. <br /> <br />* Value is not applicable (N/A) since GIC has no existing debt. <br /> <br />The assessments for the years 2003 to 2006 are summarized as follows. <br /> <br />Year <br />2006 <br />2005 <br /> <br />Assessment <br />$ 250 <br />$150 <br /> <br />Year <br />2004 <br />2003 <br /> <br />Assessment <br />$150 <br />$125 <br /> <br />The ratio of Cash Reserves to Current Expense is in the weak category, but it is fairly typical <br />practice for ditch companies, and other irrigation organizations, not to carry large cash reserves . <br />from year to year. <br /> <br />Collateral- As security for the loan, the GIC will pledge its annual assessment revenues <br />backed by an assessment rate covenant. This is in compliance with CWCB Loan Policy #5 <br />(Collateral). <br /> <br />Recommendation <br /> <br />Staff recommends that the Board approve a loan not to exceed $2,233,867 ($2,211,750 for project <br />costs and $22,117 for the 1 % Loan Service Fee in accordance with CWCB Loan Policy #16), to the <br />Greeley Irrigation Company from the Severance Tax Trust Fund Perpetual Base Account, to <br />rehabilitate and upgrade the Greeley Canal No.3. The recommended terms of the loan are 30 <br />years at 2.85% per annum. Security for the loan will be a pledge of assessment revenues backed <br />by an assessment rate covenant. <br /> <br />Staff further recommends that final approval of the loan be conditioned upon all other standard <br />contracting provisions of the CWCB. <br /> <br />cc: Clifford Clift, President, Greeley Irrigation Company <br />Richard Belt, P.E., P.H., Aqua Engineering, Inc. <br />Amy Stengel, AGO <br /> <br />Attachment <br /> <br />. <br /> <br />60f6 <br />