18b ‎(3)‎

• Board Meeting Date: 3/18/2008
• Description: CF Section - New Project Loans - Lower Latham Reservoir Company - Well Augmentation Project ‎(Phase II)‎
• Board Meetings - Doc Type: Memo

Lower Latham Reserc oir Company
Matroh 11, 2008
Page 4 of 4
Table 2 shows the Financial Ratios for the Company's revenues.
Table 2. Financial Ratios
.agenda Item 18b
2008
Financial Ratio 2006 Future
w/ Pro'ect
Operating Ratio (revenues/expenses)
weak: <100% - avera e: 100%- 120% - stron : >120°/ 169%
(Strong)
$708/420K 103%
(Strong)
$1230/1190K
Debt Ser~~ice Coverage Ratio
(revenues-expenses)/debt service
weak: <100% - avera e: 100%- 120% - stron : >120°/
(N/A) 122%
(Strong)
$165/135K
Cash Resen~es to Current Expenses
weak: <50% - avera e: 50%- 100% - stron : X100°/ 60%
(Average)
$250/420K 23%
(Weak)
$275/1190K
Annual Operating Cost per Acre-Foot (based on 8,472 AF)
eak >$20 - avera e: $10 - $20 - stron : <$10 $118/AF*
(Weak)
$1000/8.5K $140/AF*
(Weak)
$1190/B.SK
* If we include the Ditch Company delivery of 44,300 AF/yr with expenses of $80,000/yr -ratios are more realistic
2006 - $22/AF & 2008 - $24/AF.
Collateral -Security for the loan will be a pledge of revenues from oil and gas royalties and a pledge of
future assessment revenues as may be required by the Company, and the purchased water rights (two shares
of the Lower Latham Ditch Company). This is in compliance with CWCB Financial Policy #5 (Collateral).
Staff Recommendation
Staff recommends the Board approve a loan not to exceed $670,640 ($664,000 for project costs and $6,640
for the 1% Loan Service Fee) to the Lower Latham Reservoir Company for the Well Augmentation Project
(Phase II) from the Severance Tax Trust Fund Perpetual Base Account. The terms of the loan shall be a 30-
year loan at 2.25% per annum. Security for the loan shall be in compliance with CWCB Financial Policy #5.
Staff further recommends approval of the loan to be conditioned upon all other standard contracting
provisions of the CWCB and the addition of the following condition in the CWCB Loan Contract:
The bot~ower shall apply all CWCB disbursements for purchase of the Lower Latham Ditch Company
shares related to the Schmidt farm water rights towards the balance of the line of credit bridge loan.
cc: Dennis Hoshiko, President, Lower Latham Reservoir Company
Doug Seely, Water Resources Engineer
Amy Stengel, AGO
Attachment: Water Project Loan Program -Project Data Sheet