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<br />.. <br /> <br />Overland Ditch and Reservoir Company <br />July 12, 2005 <br />Page 5 of 5 <br /> <br />Agenda Item 6a <br /> <br />The CWCB loans that the Company currently holds are secured by a pledge of assessment revenues <br />and a security interest in the Overland Reservoir and its inlet and outlet structures. <br /> <br />Table 2 shows the F'inancial Ratios for the Company to be Average with the exception of cash <br />reserves. The share assessment is estimated to increase from $12.78/share to $20.59/share or as <br />necessary to cover all loan obligations. This share price will be comprised of $6.00/share for operations <br />and maintenance and $14.59/share for debt service. <br /> <br />Table 2. Financial Ratios <br /> <br />Financial Ratio Without Project With Project <br />Previous Years Future Years <br />Operating Ratio (revenues/expenses) 101% 101% <br />I weak: <100% ~ -I average: 100% - 120% I-I strong: >120%1 (Average) (Average) <br />Debt Service Coverage Ratio 100% 101% <br />(revenues-expenses )/debt service <br />I weak: <100% 1- r averaae: 100% - 120%-1- I strano: >120%1 (Average) (Average) <br />Cash Reserves to Current Expenses 8% 5% <br />1 weak: <50% ~ - I average: 50% - 1 00% ~ -I strong: >100%' (Weak) (Weak) <br />Annual Operating Cost per Acre-Ft Delivered* $7.41 $12.10 <br />~eak: >$20' -I average: $10 - $20 I-I strong: <$1~ (Strong) (Average) <br /> <br />* Calculation based on an average of 17,000 acre-feet delivered by the company (including direct flow and stored water) <br /> <br />Collateral: As security for the CWCB loan the Company will pledge assessment revenues backed by <br />an assessment covenant and the Overland Reservoir storage water rights. Based on recent sales of <br />Company shares, the market value has been determined to be between $670 and $830 per acre-foot. <br />This equates to a reservoir value of $4.8 million to $6.0 million. This security is in compliance with <br />CWCB Loan Policy #5 (Collateral). <br /> <br />Staff Recommendation . <br /> <br />Staff recommends a loan not to exceed $1,141,300 ($1,130,000 for project costs and $11,300 for the <br />1 % Loan Service Fee) to the Overland. Ditch and Reservoir Company for engineering and construction <br />costs associated with the Overland Reservoir Rehabilitation Project, from the Severance Tax Trust <br />Fund Perpetual Base Account. The terms shall be based on the current agricultural interest rate of <br />2.5% per annum for a 30-year loan. Final approval of the loan shall be conditioned upon all standard <br />contracting provisions of the CWCB Loan Program. Security for the loan shall be collateral in <br />compliance with CWCB Loan Policy #5. <br /> <br />Action Taken bv the CWCB on Julv 18. 2005 <br /> <br />The CWCB approved the staff recommendation as written above. <br /> <br />Email copy: <br /> <br />Pete Kasper, Company President <br />Bruce Marvin PE, Western Engineers Inc. <br />Wayne Schieldt, Division Engineer, DWR Division 4 <br />Amy Stengel, AGO <br /> <br />Attachment: Water Project Construction Loan Program - Project Data Sheet <br />