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New Cache La Poudre Irrigating Company November 19-21 2003 Agenda Item 8b Table 2. Financial Ratios Financial Ratio Without With completed the project project (Aver. 2001-02) (Future Year- 2008+J Operating Ratio (revenue/expense) weak: less than 100% 121% 228% average: 100% - 120% (strong) (strong) stronQ: Qreater than 120% Debt Service Coverage Ratio (revenues-expenses )/debt service 286% 102% weak: less than 100% (strong) (aver. ) average: 100% - 125% stronQ: Qreater than 125% Cash Reserves to Current Expense weak: less than 50% 18% 11% average: 50% - 100% (weak) (weak) strona: areater than 100% Annual Operating Cost per Acre-Ft. (37,500 AF) weak: greater than $20 existing $11.33 $22.64 average: $10 - $20 (aver.) (weak) strona: less than $10 As security for the loan, the NCLPIC will pledge assessment revenues backed by an assessment covenant and the project itself. The CWCB's security interest in the project ,itself will be second to the $1,409,649 loan with the Cornish Plains Livestock, LLLP. In view of the fact that CWCB will have first position in the pledge of assessment revenues, and considering the overall value of the project as based on its cost of $9,542,000, staff finds the project to be in compliance with CWCB Loan Policy #5 (Collateral). Recommendation Staff recommends a loan not to exceed $7,272,000 ($7,200,000 for project costs and $72,000 for the 1 % Loan Service Fee in accordance with CWCB Loan Policy #16), to the New Cache La Poudre Irrigating Company from the CWCB Construction Fund, to construct an equalizer reservoir, two additional storage reservoirs, and a pumping station and inter-connecting pipeline, and to refinance existing debt related to the project. The recommended terms of the loan are 30 years at 2.50% per annum. Security for the loan will be a pledge of assessment revenues backed by assessment covenant and the project itself. Staff further recommends that final approval of the loan be conditioned upon all other standard contracting provisions of the CWCB. cc: Mike Hungenberg, President, New Cache La Poudre Irrigating Company Doh Magnuson, Superintendent, New Cache La Poudre Irrigating Company David Marsh, Smith Geotechnical/Engineer Consultants Linda Bassi, AGO Attachment Action Taken bv the CWCS on November 20. 2003 The CWCB approved the Staff Recommendation, with the addition the statement listed in italics above regarding the refinancing of existing debt related to the project. Page 6 of 7