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<br /> <br /> . <br />Operating Debt Services Debt per Cash Reserve to <br />Ratio (1) Coverage (2) Ta~ (3) Current Expenses <br /> , <br />140.6% 157.9% $1,019 50.9% e <br />(Strong) (Strong) (Strong) (Average) <br /> <br /> <br />(1) Operating revenue/operating expense. <br />(2) Total eligible revenues-operating expense)/tota1 debt services. <br />(3) Total long term debt/number oftaps. <br /> <br />COLLATERAL <br /> <br />The Board's approval of the initial increment off~ancing for the Fortune Reservoir Project <br />was contingent upon a pledge of revenues by the Company and the conveyance of a security interest <br />in collateral that is equivalent in value to the principal amount ofthe loan. As security for the loan, <br />the Company has pledged revenues from service charge~ and stock sales, the Company's shares in <br />the Agriculture Ditch on Clear Creek, and Companyrea( estate assets at least equal to the value of <br />the new loan amount. The Company owns about 37 p~rcent of the Agriculture Ditch. A recent <br />appraisal report for the Company's Agricultural Ditch ~oldings indicates a value of $16,200,000 <br />based on decreed diversions. <br /> <br />CONCLUSION: <br /> <br />Based on our review of the original fe~ibility cost projections, the supporting <br />documentation provided by Consolidated Mutual Water Company of the additional cost occurred a <br />to-date, inspection of the site, and overall financial stre~gth of the Company, staff finds the project .. <br />continues to be economically, financially, and technically feasible. <br /> <br />STAFF RECOMMENDATIONS: <br /> <br />Staff recommends that the Board approve an increase of $4,333,000 to the Consolidated <br />Mutual Water Company 2001 Construction Fund lo~ authorization for the Fortune Reservoir <br />Construction Project. The total Construction Fun~ loan for this project would amount to <br />$20,600,000, not to exceed 75% of the total project costs. Terms for this loan increase would be in <br />accordance with the 2001 municipal high income interest rates as outlined in financial policy #7. <br />Collateral for the loan will be in accordance with finimcial policy #5 as adopted by the Board in <br />September 1999. ' <br /> <br />Staff further recommends that the following! conditions be met prior to entering into a <br />contract for the additional loan increment of funding: j <br /> <br />1. The Board of Directors of the Consolidated Mutual Water Company will adopt a <br />resolution or resolutions approving th,~ loan, the pledges of revenues and the <br />conveyance of a security interest in the proposed collateral. <br />2. Any collateral pledged for the loan shall be free of all liens and encumbrances. <br />3. The CWCB Construction Fund loan shall have parity status with any existing debt of a <br />the Company. .. <br />4. The loan increase shall be contingent upon all standard contracting provisions of the <br />Colorado Water Conservation Board. ' <br />