Laserfiche WebLink
KUTAK ROCK LLP • <br /> Chad Henderson <br /> April 17, 2006 <br /> Page 4 <br /> Operating Revenue $4,554,119 <br /> Non-Operating Revenue 408,281 <br /> 10% of Tap Fees 189,575 <br /> Total Recognized Revenue* $5,151,975 <br /> Operating Expenses 3,180,338 <br /> Total Recognized Net Revenue* 1,971,637 <br /> January 2006 Rate Increase** 434,966 <br /> Total Analysis Net Revenue 2 406 603 <br /> *Recognized revenue excludes $1,706,175 of tap fees received by the District in 2005. <br /> **As restated above, Section 8(e)(ii) of the respective CWCB Loan Contracts state "the analysis <br /> of revenues shall be based on the Borrower's current rate structure or the rate structure most <br /> recently adopted". In January of 2006 the District adopted a rate increase of 10% and the system <br /> operating revenue which were subject to such increase was $4,349,667; therefore the amount of <br /> $434,966 can been added to the 2005 net revenue to reflect such increased rate structure as if it <br /> had been in effect during the entire test period. <br /> Current Net Revenue Shortfall <br /> As indicated above, the total District net revenue calculated in accordance with the <br /> CWCB Loan Contracts is $2,399,160, which amount, when compared to the maximum annual <br /> debt service on all District parity obligations (including the 2006 Authority Loan) of$2,792,987, <br /> results in a shortfall of net revenue of $386,384. Without considering any new District <br /> customers, an additional rate increase of approximately 9% would result in the District meeting <br /> the additional bonds test set forth in the respective CWC L a <br /> Higher Rate Maintenance Requirements ' <br /> The rate covenant set forth in Section 8 c o h , W Loan Contracts <br /> provides for one times net revenue coverage on tl i!, Vh ligations. It is <br /> worth noting that the District's other parity obli� . eer level of coverage and <br /> present additional security for the CWCB Loans (the rate maintenance covenant for the <br /> Authority borrowings requires 1.10 times coverage and the rate maintenance covenant for the <br /> District's the publicly issued bonds requires 1.25 times coverage). <br /> Proposed District Action <br /> The proposed District action is that the District Manager provide the CWCB with a letter <br /> through which the District makes the following covenants and representations: <br /> Kutak Rock-Firm Library-4835-8633-4976.1 <br />