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Lower Latham Reservoir Company <br />January 19, 2010 (UPDATED February 4, 2010) <br />Page 7 of 7 <br />TABLE 4 <br />FiNAN('iAi. �iTMMARY <br />Agenda Item 26a <br />Future <br />Financial Ratio Past 2 Years w/ Project <br />Operating Ratio (revenues/expenses) 150% 115% <br />weak: <100% - avera e: 100% - 120% - stron : >120°/ (S�'ong) (Average) <br />$1.SM/1.OM $1.SM/1.3M <br />Debt Service Coverage Ratio 652% 180% <br />(revenues-expenses)/debt service (Strong) (Strong) <br />weak: <100% - avera e: 100% - 120% - stron : >120°/ �$1.SM-900K)/ ($1.SM-900K)/ <br />$92K 330K <br />Cash Reserves to Current Expenses 33% 69% <br />weak: <50% - avera e: 50% - 100% - stron : >100°/ (Weak) (Average) <br />$333K/1.OM $900K/1.3M <br />Annual Operating Cost per Acre-Foot (based on 5,705 AF $175 $228 <br />delivery) (Weak) (Weak) <br />eak: >$20 - avera e: $10 - $20 - stron : <$1 $1.OM/5,705 $1.3M/5,705 <br />Collateracl — Security for the loan will be a pledge of revenues from oil and gas royalties and a <br />pledge of future assessment revenues as may be required by the Company, the purchased water <br />rights (five shares of the Lower Latham Ditch Company), and the real property being purchased for <br />the recharge facilities, including the associated headgates, ditches, and measurement devices. This <br />is in compliance with CWCB Financial Policy #5 (Collateral). <br />Staff Recommendation (Board approved staff recommendation on January 27, 2010) <br />Staffrecommends the Board approve a loan from the Construction Fund not to exceed $3,811,573 <br />($3,773,835 for project costs and $37,738 for the 1% Loan Service Fee) to Lower Latham Reservoir <br />Company for the water rights purchase, engineering and construction costs related to the Well <br />Augmentation Project — Phase III. The loan terms shall be 30 years at the agricultural rate of 2.75% <br />per annum. Security for the loan shall be in compliance with CWCB Financial Policy #5. <br />Staff also recommends a contract condition requiring the bridge financing related to the Project be <br />paid in full with the proceeds from this CWCB loan. <br />cc: Dennis J. Hoshiko, President, Lower Latham Reservoir Company <br />Doug Seely, P.E., NoCo Engineering Inc. <br />Susan Schneider, AGO <br />Attachment: Water Project Loan Program — Project Data Sheet <br />