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Town of DeBeque January 23-24, 2007 (REVISED January 29, 2007) Page 3 of 4 Agenda Item 9d Financial Analvsis Table 1 shows a summary of the financial aspects of the loan request. The Town qualifies for a Low-Income Municipal interest rate of 3.25% for 30-years. The Town will finance approximately 70% of the total estimated Project cost through a CWCB loan. CWCB shall make progress payments at a rate of 70% of project invoices up to the maximum loan amount of $250,000. The remaining costs will be paid by Bluestone Irrigation District and Town reseNes. Table 1. Financial Summary Current $23/month $2.00/month $370,000 $250,000 $13,200 $14,520 $4.80/tap $1,OOO/tap Future $23/month $6.25/month Creditworthiness: The Town's Irrigation System Enterprise Fund is a newly created enterprise and therefore has no financial history and no outstanding long-term debt. Table 2 shows the Financial Ratios for the Town of DeBeque. The ratios indicate the enterprise will have the ability to repay the CWCB loan, with the irrigation system rates proposed. Table 2. Financial Ratios Financial Ratio Current With Project Future Years Operating Ratio (revenues/expenses) N/A 123%(Strong) I weak: <100% I-I average: 100% - 120% I-I strong: >120%1 $4.3K/3.5K Debt SeNice Coverage Ratio N/A 106%(Average) (revenues-expenses )/debt seNice I weak: <100% 1- I average: 100% - 120% 1- I strano: >120%. $119-4K/15K Cash ReseNes to Current Expenses N/A 34%(Weak) I weak: <50% , -I average: 50% - 100% I-I strong: >100%' $1.2K/3.5K Debt per Tap (based on 250 taps) N/A $1,000(Strong) tweak: >$5000 I-I average:$5K - $2.5K I-I strong: <$2500' $250K/25Otaps Collateral: Security for the CWCB loan will be a pledge of Irrigation System Enterprise Fund revenues backed by a rate covenant and annual financial reporting per CWCB Financial Policy.