Laserfiche WebLink
Arkansas Valley Conduit <br />November 13-15, 2006 <br />Agenda Item10a <br />3. The loan is being made to the Water Activity Enterprise with a pledge of user revenues, as <br />opposed to the District overall with a pledge of property tax revenue (similar to the USBR <br />Fry-Ark Project Obligation), which would provide stronger security. A 40-year term would <br />therefore result in more risk to the CWCB than a 30-year term. <br />4. CWCB has made a number of loans to Low-Income Municipalities with a 30-year term. If <br />the Board decides to grant the request fora 40-year term, Staff recommends that the <br />interest rate be increased by 0.25%. <br />It should also be noted that interest on the 40-year loan would be $13.3 million more than for the <br />30-year loan, increasing from $34.8 million to $48.1 million. <br />Table 1. Financial Summary <br />Total Project Cost $300,000,000 <br />Number of Financial Partici ant Entities 41 <br />Number of Taps Served 20,100 <br />Po ulation Served 47,200 <br />CWCB Loan Amount 30 ears $60,000,000 <br />CWCB Loan Pa ment includes 10% reserve $3,476,993 <br />Creditworthiness: The Enterprise has one long-term contract obligation with the USBR covering <br />the District's share of various dam safety repair costs. The original obligation was $1,322,000, and <br />the current balance is $962,000 with an annual payment due of $60,000 through 2021. The <br />Enterprise maintains a reserve account to secure this debt, as opposed to a pledge of revenues. <br />Table 2 shows the Financial Ratios and indicates overall average ability for the Enterprise to repay <br />the $60,000,000 CWCB loan, with revenues received from participating entities. Future Year ratios <br />should be considered preliminary, pending completion of the final feasibility study. <br />Table 2. Financial Ratios <br />Financial Ratio Without With the project - <br /> fhe project Future Year <br /> Aver. 2004-05 <br />Operating Ratio (revenue/expense) <br />weak: less than 100% 156% 287% <br />average: 100% - 120% (strong) (Strong) <br />strong: greater than 120% <br /> 969K/644K 5746K/2000K <br />Debt Service Coverage Ratio <br />(revenues-expenses)/debt service 540% 106% <br />weak: less than 100% (strong) (average) <br />average: 100% - 125% <br />strong: greater than 125% (969K-644W60K) 5746K-2000W3537K <br />Cash Reserves to Current Expense <br />weak: less than 50% 87% 10% <br />average: 50% - 100°~° (average) (weak) <br />strong: greater than 100% <br /> 615K/704K) (650K/5537K <br />Annual Operating Cost per Acre-Ft. (6,555 AF) <br />weak: greater than $20 N/A $729* <br />average: $10 - $20 <br />strong: less than $10 4777W6555AF) <br />Page 8 of 12 <br />