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Montezuma Valley Irrigation Company Agenda Item 15c <br /> July 2,2007(Revised July 16,2007) <br /> Page 4 of 4 <br /> Table 2 shows the Financial Ratios for the Company. The share assessment is expected to <br /> remain at $14.50/share plus the annual maintenance fee of$125. <br /> Table 2. Financial Ratios <br /> Financial Ratio Without Project With Project <br /> Previous Years Future Years <br /> Operating Ratio (revenue/expense) 140% 100% <br /> * <br /> weak: <100%1- average: 100%- 120% - strong: >1201 (strong) * (average) <br /> $9301Q$664K $930K/$930K <br /> Debt Service Coverage Ratio 100% <br /> (revenues-expenses)/debt service (N/A) (average) * <br /> weak: <100%1- [verage: 100%- 120%1- strong:>120%1 $930K-664K/$0K $930K-$664K/$266K <br /> Cash Reserves to Current Expense 150% 43% ** <br /> weak: <50%I- average: 50%- 100%1- strong: >100°/A (strong) (weak) <br /> $1,000K/$664K $400K/$930K <br /> Annual Operating Cost per Acre-Ft. (128,000AF) $5.20 $7.25 <br /> weak:>$20 1- average:$10-$201- strong: <$101 (strong) (strong) <br /> $664K/$128K $930K/128AF <br /> * Revenues include$120,000 in annual income from water leases <br /> ** Company plans to construct project with current staff-reducing the need for cash funding the 10%contribution <br /> Collateral: Security for this loan includes: 1) A pledge of the Company's assessment revenues <br /> and any other revenues legally available backed by an assessment covenant; 2)The Project, <br /> including the pipeline and all associated access easement rights. This security is in compliance <br /> with CWCB Loan Policy#5 (Collateral). <br /> Staff Recommendation (Board Approved the following on July 11, 2007) <br /> Staff recommends a loan, not to exceed $5,292,400 (5,240,000 for project costs and $52,400 for <br /> the 1% Loan Service Fee)for engineering and construction costs, to the Montezuma Valley <br /> Irrigation Company from the Severance Tax Trust Fund Perpetual Base Account, for the May <br /> Lateral Pipeline Project. The loan terms are based on an agricultural interest rate of 2.25% per <br /> annum for 30 years. Security for the loan will be collateral in compliance with CWCB Loan Policy <br /> No. 5. <br /> Supplemental Condition of Approval: <br /> Loan contracting shall be conditioned upon acceptance of a parity position with the Dolores Water <br /> Conservancy District's lien on Company's assessment revenues. <br /> Required Contract Language: <br /> All funds received from NRCS related to the May Lateral Pipeline Project must be applied to the <br /> Project and the CWCB loan. <br /> Email copy: Jim Siscoe, Manager, Montezuma Valley Irrigation Company <br /> Gerald Knudsen, PE,AgriTech Consulting <br /> Amy Stengel,AGO <br /> Attachment: Project Data Sheet <br />