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Central Colorado WCD — Well Augmentation Subdistrict <br />November 16-17, 2004 <br />Agenda Item 14d <br />cases, in order to change the use of the shares from irrigation to augmentation. Approximately <br />2000 acres will be subject to dry-up. <br />Financial Analvsis <br />The total estimated cost of the project is $22,200,000. Staff is recommending a loan for a <br />maximum amount of $20,000,000 (90% of the total project cost) for 30 years at an interest rate of <br />2.50% per annum. <br />Table 2 is a summary of the financial aspects of the project. A CWCB loan of $20,000,000 would <br />have an annual payment of $$1,051,108 (including the 10% reserve requirement) at the loan terms <br />of 2.5% for 30 years. Property taxes will be earmarked to pay back the CWCB loan. Beginning in <br />2006, the property taxes raised are estimated to be $1,125,000. The WAS Subdistrict will provide <br />the remaining 10% ($2,200,000) from annual assessments. <br />Table 1. Financial Sum <br />Project Cost <br />Number of Well Owners <br />Number of Wells <br />CWCB Loan Amount (30 years) — 90 % <br />CWCB Loan Payment (includes 10% reserve) <br />Current Assessment —2004 (per acre foot consumptive use) <br />New Assessment - 2005 (per acre foot consumptive use) <br />Annual Loan Cost per acre-ft (consumptive use delivery: 8066 ac-ft. <br />2,200,000 <br />220 <br />440 <br />0,000,000 <br />1,051.108 <br />130.31 <br />Creditworthiness: The proposed 9.0 mill property tax revenues will be pledged to repay the <br />$20,000,000 CWCB loan. <br />Table 2 shows the Financial Ratios for the WAS Subdistrict and indicates average ability to cover <br />the CWCB loan with the increased property tax. The "weak" ratio in cash reserves is balanced by <br />consideration that the repayment source is property tax. <br />Table 2. Financial Ratios <br />Financial Ratio Without With project <br />the project Future Year <br />2004 2006+ <br />Operating Ratio (revenue/expense) <br />weak: less than 100% 122% 111 % <br />average: 100%- 120% (Stt'Of1g) (aver.) <br />stron : reater than 120% <br />Debt Service Coverage Ratio <br />(revenues-expenses)/debt service N/A 118% <br />weak: less than 100% (aver.) <br />average: 100% - 125% <br />stron : reater than 125% <br />Cash Reserves to Current Expense <br />weak: less than 50% N/A 5% <br />average: 50% - 100% (Wgak) <br />stron : reater than 100% <br />Annual Operating Cost per Acre-Ft. (10,100 AF <br />weak: greater than $20 Consump. Use) $75 $201 <br />average: $10 - $20 (weak) (weak) <br />stron : less than $10 <br />rage 4 or 5 <br />