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<br />Tom Hill - McElroy Dam <br />November 6,2006 (Revised November 14, 2006) <br />Page 4 of 4 <br /> <br />Agenda Item 10d <br /> <br />, <br /> <br />Table 2. Financial Ratios <br /> <br />Financial Ratio Without Project With Project <br />2007 Future Years <br />Operating Ratio (revenues/expenses) 206%(Strong) 206%(Strong) <br />I weak: <100% I-I average: 100% - 120%' -I strong: >120%1 $21 OK/1 02K $210K/102K <br />Debt Service Coverage Ratio 62%(Weak) 49%(Weak) <br />(revenues-expenses}/debt service <br />I weak: <100% 1- I averaoe: 100% - 120% 1- I strono: >120%1 $108K/173K $108K/218K <br />Cash Reserves to Current Expenses 18%(Weak) 12%(Weak) <br />I weak: <50% I-I average: 50% - 100% I-I strong: >100%1 $18K/102K $18K/147K <br />Annual Operating Cost per Acre-Ft Delivered* $425(N/A) $612(N/A) <br />/weak: >$20 I-I average: $10 - $20' -I strong: <$101 $102K/240 $147K/240 <br /> <br />· Calculation based on Ranch operations and is not a valid representation of the cost to deliver water <br /> <br />Collateral: Security for the CWCB loan will be a security interest in 207 acres of the Ranch along a <br />county maintained road valued at $5,314/acre or $1 ,100,000, Financial Policy #5 requires the <br />appraised value to exceed 110% of the loan amount. In the event the appraisal indicates a value less <br />than 110% of the loan amount the Hills will provide CWCB with a second position on the entire ranch <br />which is currently on the market for $6,5 million. This security is a variation to CWCB Financial Policy <br />#5 (Collateral), <br /> <br />Staff Recommendation (Board Approved Staff Recommendation with Changes Shown Below) <br /> <br />Staff recommends the Board approve a loan not to exceed $862,540 ($854,000 for project costs and <br />$8,540 for the 1 % Loan Service Fee) to Tom Hill for engineering and construction costs associated with <br />the McElroy Dam Rehabilitation Project, from the Severance Tax Trust Fund Perpetual Base Account. <br />The terms of the loan shall be a 30-year loan at 2.5% per annum, Final approval of the loan shall be <br />conditioned upon all standard contracting provisions of the CWeB Loan Program, Security for the loan <br />shall be collateral in compliance with CWCB Loan Policy #5 with the variance described below, <br /> <br />Supplemental Loan Contract Conditions <br /> <br />1, Borrower shall provide a certified appraisal of the 207 acre land to be used as security for the loan, <br />The appraisal shall indicate a value greater than 110% of the loan amount. If the appraisal indicates <br />a value less than 110% BR8 mere tR8R 99%' ef tRe le8R 8FF1SWRt, CWCB shall take a second lien on <br />the entire Ranch. If tR8 8~~r8is81 i8 le88 tR8R 99%' ef tR8 le8R \l8Iw8, 8errsvler ml;lst ~feviel8 <br />8€18itieR8118R8 88 8e8writy te meet Peli8Y #5 r8E1wir8meRt. <br /> <br />2. iR8 le8R eeRtF8€lt sR811 iRel1;l88 819 8eeeleF8tieR 8181;1se 'uRieR reElwire8 iR8 le8R te 88 ~8i8 iR fwll if tR8 <br />Hills 8ell 8RY 18R8S ir::r::iS8te8 8Y tR8 MelElrey Re88P':eir::, TR8 sw8jeet leR8s er8 ~eR sf tR8 Cer8 Pass <br />RaReR aR8 are 8sseri8e8 iR seRsral as: Te'.\lRsRi~ 2 ~JeRR, RaRSe 91 West ef tRe G~ P,M, (1) See, <br />1 Q: SKSIE~'; SIE~'S'.^.'1'; S'}Jt{.SW1' (2) See, 15: tRat ~sRisR sf tRe ~J% sf See. 1 Ii lyiR€I RSRR sf SH <br />144 (4) See. 16: tRat ~sRisR sf tRe IE %~JIE1' sf Sse, 16 lyiRseast sf CSWRty R8, 17. <br /> <br />Email copy: <br /> <br />Tom & Linda Hill <br />John Sikora, Project Engineer, URS Corporation <br />Amy Stengel, AGO <br /> <br />Attachment: Water Project Construction Loan Program - Project Data Sheet <br />