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<br />Lower Latham Reservoir Company <br />July 11-12, 2007 <br /> <br />Agenda Item 15b <br /> <br />Debt Service Coverage Ratio <br />(revenues-expenses)/debt service 117% <br />weak: less than 100% N/A* (average) <br />average: 100% - 125% <br />strong: greater than 125% (70BK-215K/420K) <br />Cash Reserves to Current Expense <br />weak: less than 50% 99% 16% <br />average: 50% - 100% (aver.) (weak) <br />strong: greater than 100% <br /> f 417.5K/420K) (104K/635KI <br />Annual Operating Cost per Acre-Ft. (5,705 AF)** <br />weak: greater than $20 $74 $111 <br />average: $10 - $20 (weak) (weak) <br />strong: less than $10 <br /> f420K/5.7KI (635K/5.7KI <br /> <br />* Indicates no existing long-term debt. <br />** Average annual reservoir delivery of 2,554 AF, plus 3,151 AF total augmentation plan <br />delivery, including consumptive use credits and return flow obligation. <br /> <br />Collateral- As security for the loan, the LLRC will pled~le its annual revenues from all <br />sources, including a pledge of future assessment revenues, if needed, backed by a rate <br />covenant, and the subject water rights, consisting of 6 shares of LLDC. This is in compliance <br />with CWCS Loan Policy #5 (Collateral). <br /> <br />Recommendation <br /> <br />Staff recommends that the Soard approve a loan not to exceed $1,994,596 ($1,974,848 for <br />project costs and $19,748 for the 1% Loan Service Fee in accordance with CWCS Loan Policy <br />#16), to the Lower Latham Reservoir Company from the Severance Tax Trust Fund <br />Perpetual Sase Account, to acquire surface water rights, a total of 6 shares of Lower Latham <br />Ditch Company, for the purpose of providing augmentation water for existing shareholder wells, <br />and to install a flow measuring and monitoring system to facilitate augmentation plan <br />administration, and to pay expenses already incurred. The recommended terms of the loan <br />are 30 years at 2.25% per annum. Security for the loan will be a pledge of annual revenues <br />from all sources, including a pledge of future assessment revenues, if needed, backed by a rate <br />covenant, and the project water rights, consisting of 6 shares of Lower Latham Ditch Company. <br /> <br />Staff further recommends that final approval of the loan be conditioned upon all other standard <br />contracting provisions of the CWCS. <br /> <br />cc: Dennis Hoshiko, President, Lower Latham Reservoir Company <br />Doug Seely, Water Resources Engineer <br />Amy Stengel, AGO <br /> <br />Attachment <br /> <br />Action Taken bv the CWCS on Julv 12. 2007 <br />The CWCS approved the Staff Recommendation. <br /> <br />50f5 <br />