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Town of Gypsum <br />May 12, 2009 (UPDATED May 22, 2009) <br />Page 5 of 6 <br />Financial Analysis <br />Agenda Item 17a <br />Table 1 shows a summary of the financial aspects of the loan request. The interest rate for the Town <br />is based on Municipal - High Income interest rate for a 30 year loan of 4.5% (Financial Policy #7). <br />Table 1. Financial Summary <br />PROJECT/LOAN <br />Total Pro'ect Cost $3,162,000 <br />Total CWCB Loan (a prox. 85%) $2,663,100 <br />CWCB Loan (Including 1% Service Fee) $2,689,731 <br />CWCB Annual Loan Pa ent $165,100 <br />CWCB Loan Obli ation (includin 10% debt reserve funding) $181,600 <br />Annual Debt Service er Ta (usin 2,040 Ta s) $89/Ta <br />Creditworthiness: The Town operates its water related services through a Water Enterprise pursuant <br />to TABOR. The Town's water activity enterprise has one outstanding long-term debt totaling <br />approximately $300,000 with the Colorado Water Resources & Power Development Authority with <br />an annual payment of $60,000 and a maturity date of 2014. The Town anticipates retiring this loan <br />prior to signing a CWCB Loan Contract. <br />Table 2 shows the Financial Ratios for the Town. <br />Table 2. Financial Ratios <br /> Future (2012) <br />Financial Ratio Past Years With Project <br />Operating Ratio (revenues/expenses) 121% 106% <br />weak: <100% - average: 100% - 120% - strong: >120% (s~'ong) <br />$980K/808K (Average) <br />$1.O1M/957K <br />Debt Service Coverage Ratio 373% 129% <br />(revenues-expenses)/debt service (Strong) (Strong) <br />weak: <100% - avera e: 100% - 120% - stron : >120°/ $980-745K/0.06K $1.01-775K/O.18K <br />Cash Reserves to Current Expenses 334% 209% <br />weak: <50% - avera e: 50% - 100% - stron : >100°/ (Strong) <br />$2.7M/808K (Strong) <br />$2.OM/957K <br />Average Monthly Water Bill $25/Month ~25/Month <br />eak: >$60 - average: $60 - $30 - stron : <$3 (Strong) (Strong) <br />Collateral - Security for the CWCB loan will be a pledge of the Town's water activity enterprise <br />revenues backed by a rate covenant and annual financial reporting. This is in compliance with CWCB <br />Financial Policy #5 (Collateral). <br />