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• Board Meeting Date: 7/19/2009
• Description: CF Section - New Project Loans - Farmer's Reservoir and Irrigation Company - Milton Reservoir and Barr Lake Improvements Project
• Board Meetings - Doc Type: Memo

Farmers Reservoir and Irrigation Company Agenda Item 10
July 14, 2009
Page 8 of 8
Creditworthiness
: The Company has no existing debt service. The CWCB loan will be repaid
from increases in share assessments. For the past several years, the Company has not charged its
shareholders with assessments because revenues ge nerated from oil and gas royalties nearly
covered all expenses. Any shortfalls in operating e xpenses were covered with cash reserves.
Assessments will be set at $27/share to cover the CWCB debt service. As part of the CWCB loan
contracting process, shareholders must approve this assessment through a resolution either at the
Company’s annual meeti ng or at a special meeting call ed for this purpose.
TABLE 5
FINANCIAL RATIOS
Future
Past 3 Years
Financial Ratio
w/ Project
10 2 % 10 0 %
Operating Ratio (revenues/expenses)
( Average ) (Av erage)
weak: <100% - average: 100% - 120% - strong: >120%
$ 2.85 M / $2.8 M $ 3. 1 M/$3. 1 M
1 38 %
Debt Service Coverage Ratio
No Existing (Average)
(revenues - expenses)/debt service
Debt $ 3. 1 M - 2 . 8 M /
weak: <100% - average: 100% - 120% - strong: >120%
$217 K
130 % 106 %
Cash Reserves to Current Expenses
( Strong ) ( Strong )
weak: <50% - average: 50% - 1 00% - strong: >100%
$ 3.7M /$ 2.8 M $ 3.3M /$3. 1 M
$ 22.70 $ 24.44
Annual Operating Cost per Acre - Foot
( 125,000 AF)
( Weak ) (Weak )
weak: >$20 - average: $10 - $20 - strong: <$10
$ 2.8 M / 125K AF $ 3.1 M / 125K AF
Collateral
: As securit y for the loan, the Company will pledge its assessment revenues backed
by a rate covenant and a nnual financial reporting and water rights valuing $3,535,000. This is in
compliance with the CWCB Financial Policy #5 (Collateral).
Staff Recommendation
Sta ff recommends the Board approve a loan not to exceed $3,535,000 ($3,500,000 for project
costs and $35,000 for the 1% Loan Service Fee) to the Farmers Reservoir and Irrigation
Company to construct the Milton Reservoir and Barr Lake Improvements Project from the
Construction Fund. The loan terms shall be 30 years at a blended rate of 3.7% per annum.
Security for the loan shall be in compliance with CWCB Financial Policy #5.
cc: Manuel Montoya, General Manager, Farmers Reservoir and Irrigation Company
Gene va Sandusky, Corporate Treasurer, Farmers Reservoir and Irrigation Company
Troy Thompson, P.E., Ecological Resource Consultants, Inc.
Susan Schneider, AGO
Attachment: Project Data Sheet