Laserfiche WebLink
Farmers Reservoir and Irrigation Company <br />July 14, 2009 (UPDATED July 22, 2009) <br />Page 8 of 8 <br />Agenda Item 10 <br />Creditworthiness: The Company has no existing debt service. The CWCB loan will be repaid <br />from increases in share assessments. For the past several years, the Company has not charged its <br />shareholders with assessments because revenues generated from oil and gas royalties nearly <br />covered all expenses. Any shortfalls in operating expenses were covered with cash reserves. <br />Assessments will be set at $27/share to cover the CWCB debt service. As part of the CWCB loan <br />contracting process, shareholders must approve this assessment through a resolution either at the <br />Company's annual meeting or at a special meeting called for this purpose. <br />TABLE 5 <br />FINANCIAL RATIOS <br /> Future <br />Financial Ratio Past 3 Years ~,~,~ project <br />Operating Ratio (revenues/expenses) 102% 100% <br />weak: <100% - avera e: 100% - 120% - stron : >120% (Average) (Average) <br /> $2.85M/$2.8M $3.1M/$3.1M <br />Debt Service Coverage Ratio 138% <br />(revenues-expenses)/debt service No Existing (Average) <br />weak: <100% - avera e: 100% - 120% - stron :>120°/ Debt $3.1M-2.8M/ <br /> $217K <br />Cash Reserves to Current Expenses 130% 106% <br />weak: <50% - avera e: 50% - 100% - stron : >100% (Strong) (Strong) <br /> $3.7M/$2.8M $3.3M/$3.1M <br />Annual Operating Cost per Acre-Foot (125,OOOAF) $22•~0 $24.44 <br />eak: >$20 - avera e: $10 - $20 - stron : <$1 (weak) (Weak) <br /> $2.8M/125K AF $3.1M/125K AF <br />Collateral: As security for the loan, the Company will pledge its assessment revenues backed <br />by a rate covenant and annual financial reporting and water rights valuing $3,535,000. This is in <br />compliance with the CWCB Financial Policy #5 (Collateral). <br />Staff Recommendation (Board approved staff recommendation on June 21, 2009) <br />Staff recommends the Board approve a loan not to exceed $3,535,000 ($3,500,000 for project <br />costs and $35,000 for the 1% Loan Service Fee) to the Farmers Reservoir and Irrigation <br />Company to construct the Milton Reservoir and Barr Lake Improvements Project from the <br />Construction Fund. The loan terms shall be 30 years at a blended rate of 3.7% per annum. <br />Security for the loan shall be in compliance with CWCB Financial Policy #5. <br />cc: Manuel Montoya, General Manager, Fanners Reservoir and Irrigation Company <br />Geneva Sandusky, Corporate Treasurer, Farmers Reservoir and Irrigation Company <br />Troy Thompson, P.E., Ecological Resource Consultants, Inc. <br />Susan Schneider, AGO <br />Attachment: Project Data Sheet <br />