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<br />. <br /> <br />, <br /> <br />e <br /> <br />e <br /> <br />e <br /> <br />Town of Akron - Well and Pipeline Construction <br />September 11-12, 2002 <br /> <br />Agenda Item 12c <br /> <br />Table 1. Financial Summary <br /> <br />Proiect Cost $388,799 <br />Number of Residents 1711 <br />Number of Water Taos 880 <br />CWCB Loan Amount (30 vears) $349,799 <br />CWCB Loan Pavment (includes 10% reserve) - Beain 2003 $21 ,582 <br />Current Monthlv Water Rate IAverane) $25.70 <br />Monthlv oer taD cost of the CWCB loan $2.04 <br />Annual Loan Cost oer Acre-Foot (max. withdrawal of 530 acre-feet) $40.72 <br /> <br />Creditworthiness: The Town of Akron has an existing REA loan in its Water Fund, which was <br />used in conjunction with a community development grant to construct the Town's water tank in <br />1996. The loan, originally in the amount of $480,000 (remaining principal amount of $192,000) has <br />3 years left at an annual cost of $49,920 per year. It will be paid off in November 2005. This loan is <br />through Y-W Electric Association, Inc., Akron, Colorado. The loan is secured by a "Pledge <br />Agreement" that gives Y-W Electric a security interest in the gross revenues of the Town's Water <br />Fund. The Y-W Electric Board of Directors have declined a request to put the proposed CWCB <br />loan in a parity position with their loan. <br /> <br />Table 2 shows the Financial Ratios for the Town and indicates, with the exception of cash <br />reserves, strong ability to repay the $349,799 CWCB loan and the Y-W Electric Loan. <br /> <br />Table 2. Financial Ratios <br /> <br />Financial Ratio Without With project <br /> the project Future Years <br /> fAver. 1999-02) 2003-05 2005+ <br />Operating Ratio (revenue/expense) <br />weak: less than 100% 134% 151% 151% <br />average: 100% - 120% (strong) (strong) (strong) <br />strona: areater than 120% <br />Debit Service Coverage Ratio <br />(revenues-expenses)/debt service 132% 141% 467% <br />weak: less than 100% (strong) (strong) (strong) <br />average: 100% - 125% <br />strano: areater than 125% <br />Cash Reserves to Current Expense <br />weak: less than 50% 26% 11% 36% <br />average: 50% - 100% (weak) (weak) (weak) <br />strona: areater than 100% <br />Debt per Tap <br />weak: greater than $5000 $58 $81 $25 <br />average: $2500 - $5000 (strong) (strong) (strong) <br />strono: less than $2500 <br />Monthly Water Bill <br />average: $30 $26 $26 $26 <br />weak: greater than $60 (aver.) (aver.) (aver.) <br /> <br />Page 5 of 7 <br />