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<br />" <br /> <br />Carpenter & Mitchell Ditch Company <br />May 16. 2005 <br />Page 4 of4 <br /> <br />Agenda item 15c <br /> <br />Table 3. Financial Ratios <br /> <br />. <br /> <br />Financial Ratio Without Project With Project <br />Previous Years- Future Years <br />Operating Ratio (revenue/expense) N/A 100% <br />lweak: <100%1-laverage: 100%-120%,-lstrong: >120%~ (average) <br />Debt Service Coyerage Ratio 133% <br />(reyenues-expenses)/debt service N/A <br />I weak: <100% 1- I averaae: 100% -120% 1- fstrann: >120%1 (strong) <br />Cash Reserves to Current Expense N/A After first 3 years <br />I weak: <50% I-I average: 50% - 100% I-I strong: >10004 200% <br /> (strong) <br />Annual Operating Cost per Acre-Ft. (756 AF) N/A $20 <br />I weak: >$20 ~ -I average: $10 - $20 I-Istrang: <$101 (average) <br /> <br />- Values are not applicable (N/A) since the Company is new and financial records do not exist. <br /> <br />Collateral: As security for this loan the Company will pledge it's assessment revenues backed by an <br />assessment covenant, which includes a security interest that assigns the Company's right to enforce <br />the "step-up" provision in the Funding Agreement to CWCB in the eyent of default, and the Project <br />including pipeline, diversion structure No. 508 and all associated access easement rights. This security <br />is in compliance with CWCB Loan Policy #5 (Collateral). . <br /> <br />Staff Recommendation <br /> <br />Staff recommends an initial loan, not to .exceed $607,200 for engineering and construction costs, to the <br />Carpenter and Mitchell Ditch Company from the Severance Tax Trust Fund Perpetual Base Account, for <br />the Carpenter and Mitchell Ditch Pipeline Project. The staff further recommends a post-construction loan <br />not to exceed $233,772 ($227,700 for project costs and $6,072 for the 1 % Loan Service Fee) to the <br />Company with terms based on the current agricultural rate (30 years at 2.50% per annum). Security for the <br />loan will be collateral in compliance with CWCB Loan Policy NO.5. <br /> <br />Staff further recommends that final approval of the loan be conditioned upon the following: <br /> <br />1. Executed USDA .Conservation I?rogram Contract. <br />2. Company's Funding Agreement shall include a "step-up" proYision. <br />3. All standard contracting proyisions of the CWCB Loan Program including a revised Debt Service <br />Reserve Fund Provision that requires two annual loan payments (one payment set aside at the <br />time of first draw of funds and one third of an annual payment set aside at the time of each of <br />the first three annual loan payments). <br /> <br />Eldan Simmons, President, Carpenter and Mitcheli Ditch Company <br />Raymond Keith, Mancos Conservation District <br />Tim Oueliette, Engineering and Technical Support, NRCS Cortez Service Center <br />Amy Stengel, AGO <br /> <br />Attachment: Project Data Sheet <br /> <br />Email copy: <br /> <br />. <br />