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<br />//Lake Arrowhead Wale' AasoOation <br />September 11-12, 2002 <br /> <br />Agenda Item 12d. <br />(Updated September 18, 2002) <br /> <br />Table 1. Financial Summarv <br />Proiect Cost $400,000 <br />Number of Customers 72 <br />Number of Shares of Stock N/A <br />CWCB Loan Amount $300,000 <br />CWCB Loan Payment (includes 10% reserve) $19,667 <br />Annual Loan Cost per acre-foot (Reservoir volume: 200 ac-ft.) $98 <br /> <br />Credit worthiness: The LAWA has no existing debt. Table 2 shows the Financial Ratios for the <br />LAWA and indicates 3 ratios in the strong/average category and one ratio in the weal< category <br />with the $300K CWCB loan in place. However, the Annual Cost Der Acre-Foot is a ratio relating <br />to purely agricultural projects. Municipal type projects can typically support a much hi!~her <br />annual cost. <br /> <br />Table 2. Financial Ratios <br /> <br />Financial Ratio Without ~ With <br /> The Droiect The J.)roject <br />Operating Ratio (revenue/expense) 136% 119% <br />weak: less than 100% , (strong) (average) <br />average: 100% - 120% <br />strona: areater than 120% <br />Debit Service Coverage Ratio No debt 149% <br />(revenues-expenses )/debt service (strong) (strong) <br />weak: less than 100% <br />average: 100% - 125% <br />strona: areater than 125% <br />Cash Reserves to Current Expense 194% 53% <br />weak: less than 50% (strong) "{average) <br />average: 50% - 100% <br />strona: areater than 100% <br />Annual Cost per Acre-Foot (200 ac-ft) $ 90 $179 <br />weak: greater than $20 (weak) (weak) <br />average: $10 - $20 <br />strona: less than $10 <br /> <br />As security for the loan the LAWA will pledge assessment revenues backed by assessment <br />covenant as well as the reservoir, water rights to fill the reservoir, and the land upon which the <br />reservoir is located. This security is in compliance with CWCB Loan Policy #5 (CollatE~ral). <br /> <br />Recommendation <br />Staff recommends a loan from the Small Project Account not to exceed $300,000 to the Lake <br />Arrowhead Water Association, Inc. to cover U/J to 75% of the cost to rehabilitate the l.ake <br />Arrowhead Dam. The recommended term of the loan is 30 years and the recommended lending <br />rate is 4.25%. Security for the loan will be a pledge of assessment revenues backed by <br />assessment covenant as well as the reservoir, water rights to fill the reservoir, and the land <br />upon which the reservoir is located. Staff further recommends that final approval of the loan be <br />conditioned upon all other standard contracting provisions of the CWCS. <br /> <br />Action taken bv the CWCS Seotember 12, 2002 <br />The CWCS approved the modified Staff Recommendation above (modifications are <br />underlineQ). <br /> <br />cc: Dwight Giles, 5766 Arrowhead Dr., Greeley, CO 80634 <br />John Gauthiere, PE, 2157 Buena Vista Dr., Greeley, CO 80634 <br />Linda Bassi, AGO <br />Attachment <br />C:\WP51\Proj-New\LakeArrowhead 902memo; L:\boardmem\Sept02\12d Sept 02 Lake Arrowhead <br /> <br />3 <br />