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<br />Town of Coal Creek <br />March 24-2625, 2001 <br /> <br />Agenda Item 24f. <br />(Updated March 28, 2003) <br /> <br />Page 3 <br /> <br /> <br />Table 1. Town of Coal Creek - Financial Summa <br /> <br /> <br />$75,000 <br />$67,500 <br />$4,165 <br />165 <br />$123 <br /> <br />includes 10% reserve. <br /> <br />Credit worthiness: The Town has no debt. Table 2 shows the Financial Ratios and indicates, with <br />the exception of Cash Reserves, average to strong ability to repay with the CWCB loan in place. <br /> <br />Financial Ratio Without the oroiect With the oroiect <br />Operating Ratio (revenue/expense) 112% (average) 106% (average) <br />weak: less than 100% <br />average: 100% - 120% <br />strona: oreater than 120% <br />Debt Service Coverage Ratio No Debt (strong) 199% (strong) <br />(revenues-expenses)/debt service <br />weak: less than 100% <br />average: 100% - 125% <br />strono: areater than 125% <br />Cash Reserves to Current Expense 44% (weak) 30% (weak) <br />weak: less than 50% <br />average: 50% - 100% <br />strona: 0 reater than 100% <br />Monthly Residential Water Bill $25.00 (strong) $25.00 (strong) <br />weak: greater than $60 <br />average: $30 - $60 <br />strano: less than $30 <br /> <br />Table 3. Financial Ratios <br /> <br />As security for the loan the Town will pledge revenues backed by rate covenant. (This security is in <br />compliance with CWCS Loan Policy #5 (Collateral). <br /> <br />Recommendation <br />Staff recommends a Small Project loan from the Construction Fund in amount of $67,500 to the <br />Town of Coal Creek (acting by and through its enterprise fund) to pay for up to 90% of the cost to <br />purchase water rights. The recommended loan terms are 30 years at 3.75% (3.832% Annual <br />Percentage Rate.) As security for the loan the Town will pledge revenues backed by rate covenant in <br />compliance with CWCS Loan Policy #5 (Collateral). <br /> <br />3 <br /> <br /> <br />Staff further recommends that final approval of the loan be conditioned upon all standard contracting <br />provisions of the CWCS, including the 1 % loan origination fee charged in accordance with CWCB <br />Policy #16. The maximum loan amount may be increased to $68,175 if the borrower elects to finance <br />the 1 % loan service charge. An appraisal or written opinion of value of the water shares must also be <br />provided by the Borrower as a condition of obtaining the CWCS loan. <br /> <br />Action taken bv the CWCS March 26. 2003 <br />The CWCS approved the Staff Recommendation, with the revision shown above. <br /> <br />cc: Charles Hastings, Mayor, Town of Coal Creek, P.O. Box 36, Coal Creek, CO 81221 <br />Linda Bassi, AGO <br /> <br />Attachment <br /> <br />C:\CoaICreek 303memo <br />L:\boardmem\mar03\24f - Town of Coal Creek <br />