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Town of Hillrose <br />July 11-12, 2007 <br />Agenda Item 15d <br />Debt Service Coverage Ratio <br />(revenues-expenses)/debt service 563%* 101 % <br />weak: less than 100% (strong) (average) <br />average: 100% - 125% <br />strong: greater than 125% (56K-33K/4K) (94K-51.5K/42K) <br />Cash Reserves to Current Expense <br />weak: less than 50% 57% 21 % <br />average: 50% - 100% (average) (weak) <br />strong: greater than 100% <br /> 18W31 K 20K/94K <br />Debt per Tap (141 taps)** <br />weak: greater than $5000 $490 $8,215 <br />average: $2500 - $5000 (Stl'Ong) (weak) <br />strong: less than $2500 <br /> 69W141 1,158K/141 <br />Monthly Water Bill <br />average: $30 $55.40* $57.15 <br />weak: greater than $60 (average) (average) <br />In 2006, the Town began assessing users for the CWRPDA (DWRF) loan. <br />** Both active taps (132) and vacant lots (9) pay debt surcharges. <br />Security - As security for the loan the Town will pledge Water Enterprise Fund revenues, <br />backed by a rate covenant and annual financial reporting. This is in compliance with CWCB <br />Loan Policy #5 (Collateral). In accordance with CWCB Loan Policy #8 (Purchase of Water <br />Rights), a written appraisal or opinion of value from a qualified water rights appraiser supporting <br />the purchase price must be submitted prior to disbursal of CWCB ~oan funds. <br />Recommendation <br />Staff recommends a loan not to exceed $49,995 ($49,500 for project costs and $495 for the 1% <br />Loan Service Fee in accordance with CWCB Loan Policy #16), to the Town of Hillrose, acting by <br />and through its Water Activity Enterprise Fund, from the Severance Tax Trust Fund Perpetual Base <br />Account, to purchase surFace water rights, 6 shares of Lower Platte & Beaver Canal Company, to <br />use for well augmentation for its proposed secondary water system, and to pay expenses already <br />incurred. The recommended terms of the loan are 30 years at 3.00% per annum. Security for the <br />loan will be a pledge of enterprise fund revenues. <br />Staff further recommends that final approval of the loan be conditioned upon all other standard <br />contracting provisions of the CWCB, as well as the following: <br />1. Appraisal - Prior to execution of a State contract, a written appraisal or opinion of value <br />from a qualified water rights appraiser supporting the water rights ( 6 shares of Lower <br />Platte and Beaver Canal Company) purchase price, must be submitted for review and <br />approval by CWCB. <br />cc: Lynn Golemboski, Town Clerk and Administrator, Town of Hillrose <br />Brent Nation, P.E., Fort Morgan <br />Amy Stengel, AGO <br />Attachment <br />5 of 6 <br />