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Owl Creek Reservoir Company Agenda Item 22E <br />November 20, 2001 <br />Table 3 illustrates the Financial Ratios for the Owl Creek Reservoir Company/J. Gale and <br />Valerie A. Moody. The annual income of J. Gale and Valerie A. Moody can vary from <br />year-to-year depending on the agricultural maxket and present land values. <br />Table 3. - Financial Ratios <br />Financial Ratios Without With <br />The Project The Project <br />Operating Ratio (revenue/expense) <br />weak: less than 100% 86% 105% <br />average:100%-120% (weak) (average) <br />strong: greater than 120% <br />Debit Service Coverage Ratio <br />(revenue-expenses)/debt service 72% 111 % <br />weak: less than 100% (weak) (average) <br />average: 100%-125% <br />strong: greater than 125% <br />Cash Reserves to Current Expenses <br />weak: less than 50% 3% 2.5% <br />average: 50%-100% (weak) (weak) <br />strong: greater than 100% <br />Annual Cost per Acre (1,200) <br />Weak: greater than $20 $0 $51 <br />Average: $10-$20 (n/a) (weak) <br />Strong: less than $10 <br />As security for the loan the Owl Creek R rvoir Company/J. Gale and Valerie A. <br />Moody will pledg�e�� .�ed facili 10 shares of water stock, and 200 acres of <br />;. _ .., �.�,,���:�.��;���- .,��,,:��.��.o ���< >� <br />real property that the reservoir wil�'encompass, a.�l combinec� 1�emg equa�or grea,�er in <br />:�.�. � �� ,�:..��.�., �. .� <br />va ue an' propose�oan amount of $1,125,000. � Given the Reservoir Company's <br />variation in annual income, loan approval would b�ubject to a len�der titl <br />verifying ownership of the security by the Reservoir Company/J.Gale and Valerie A. <br />Moody, and�n ���* ofthe,�va�er <br />, .. � <br />This security is in compliance with CWCB Loan Policy No. 5_(Collateral). <br />Recommendation <br />Staff recommends a CWCB Construction Fund Loan to the Owl Creek Reservoir <br />Company/J. Gale and Valerie A. Moody in the amount of $1,125,000 for up to 90% of <br />the eligible proj ect costs to rehabilitate Owl Creek Reservoir and to refinance debt <br />associated with portions of the project already completed. The recommended term of the <br />loan is 30-years at the CWCB agricultural rate of 2002. Security for the loan will be the <br />completed facility, water rights, and real property equal to or greater than the loan <br />amount. <br />