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Grand River Ditch Company <br />July 9, 2010 (Updated July 30, 2010) <br />Page 5 of 5 <br />Table 3 shows the Financial Ratios for the Company. <br />Table 3. Financial Ratios <br />Agenda Item 8b <br />Financial Ratio Past Years Future <br />Operating Ratio (revenues/expenses) 140% 100% <br />weak: <100% - avera e: 100% - 120% - stron : >120°/ (Strong) (Average) <br />$56K/40K $69K/69K <br />Debt Service Coverage Ratio N � A 100% <br />(revenues-expenses)/debt service (Average) <br />weak: <100% - avera e: 100% - 120% - stron :>120°/ �o Debt) $69-40/29K <br />Cash Reserves to Current Expenses 53% 30% <br />weak: <50% - avera e: 50% - 100% - stron : >100°/ (Strong) (Average) <br />$21 K/40K $21 K/69K <br />Annual Operating Cost per Acre-Foot (14,500 AF) $2•76/AF $4.75/AF <br />� * , eak: >$20 - avera e: $10 - $20 - stron : <$1 (Strong) (Strong) <br />$40K/14.SK $69K/14.SK <br />Collateral - Security for the loan shall be a pledge of the Company's assessment revenues and � <br />, <br />the project itself including contract language that protects the CWCB's right to deny delivery <br />of water through the project in the event of default. Additionally, in the event of default, <br />CWCB can enforce the Company's right to sell a delinquent shareholder's stock as contained <br />within the Company's Articles of Incorporation and by-laws. This is in compliance with CWCB <br />Financial Policy #5 (Collateral). <br />Staff Recommendation (Approved by Board with additional collateral language above) <br />Staff recommends the Board approve a loan, not to exceed $543,380 ($538,000 for project costs <br />and $5,380 for the 1% Loan Service Fee) for engineering and construction costs, to the Grand River <br />Ditch Company from the Construction Fund for the Grand River Ditch Pipeline Project. Following <br />construction, the staff further recommends the loan be amended to an amount not to exceed <br />$443,380 ($438,000 for the remaining balance of the Project and $5,380 for the Loan Service Fee). <br />The loan terms shall be 30 years at a blended interest rate of 4.2% per annum. Security for the loan <br />shall be in compliance with CWCB Financial Policy #5. <br />Additional Contract Condition all additional grant funds obtained for the purpose of this Project <br />shall be applied to the balance of the final Project cost. <br />cc: Nella Barker, Secretary/Treasurer <br />Susan Schneider, AGO <br />Attachment: Water Project Loan Program --Project Data Sheet <br />