C150264 Aproval letter

• Contract/PO #: C150264
• Contractor Name: Lower Latham Reservoir Company
• Contract Type: Loan
• Water District: 0
• County: Weld
• Loan Projects - Doc Type: Approval Letter

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Lower Latham Reservoir Company
March 11, 2008 (Updated March 20, 2008)
Page 4 of 4

Agenda Item 18b

Table 2 shows the Financial Ratios for the Company's revenues.

Table 2. Financial Ratios

2008
Financial Ratio 2006 Future
w/ Pro.iect
Operating Ratio (revenues/expenses) 169% 103%
I weak: < 1 00% I-I average: 100% - 120% 1- I strong: > 120%1 (Strong) (Strong)
$708/420K $1230/1190K
Debt Service Coverage Ratio 122%
(revenues-expenses)/debt service (N/A) (Strong)
I weak: < 1 00% 1- I averalZe: 100% - 120% 1- I strong: >120%1 $165/135K
Cash Reserves to Current Expenses 60% 23%
I weak: <50% 1- I average: 50% - 100% , -I strong: > 1 00%' (Average) (Weak)
$250/420K $275/1190K
Annual Operating Cost per Acre-Foot (based on 8,472 AF) $ 118/AF* $ 140/AF*
Jweak: >$20 I-I average: $10 - $20 I-I strong: <$101 (Weak) (Weak)
$1000/8.5K $1190/8.5K

* Ifwe 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 (Board Approved Staff Recommendation on 3/19/2008)

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 borrower 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