BOARD00333

• Board Meeting Date: 1/26/2000
• Description: CF Section - New Loans - Owl Creek Supply and Irrigation Company
• Board Meetings - Doc Type: Memo

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Owl Creek Supply and irrigation Co. Agenda Item 10d.
January 14. 2000.

Table 1: Alternative of Commercial Bank Financing

Lender and Loan Rate Annual Payment Added Annual Cost
CWCB at 4% / 30 years $26,023 $0
Bank at 8.5% / 20 years $41,552 $21,529
Bank at 10% / 20 years $52,856 $26,833
Bank at 12% 120 years $60,245 $34,222

Credit worthiness: The Company has no debt. The tinaneial ratios for the OCSIC are shown in
Table 2, and indicate average to strong ability to repay the CWCB loan.

Table 2. Financial Ratios

Financial Ratio Without the project With the project
Operating Ratio (revenuelexpense) 126% (strong) 101% (average)
Debit Service Coverage Ratio No debt (strong) 114% (average)
(revenues-expenses)/debt serviee
Cash Reserves to Current Expense 79% (average) 50% (average)
Annual Cost per Aere-Foot $2.49 (strong) $3.49 (strong)

Table 3 is a summary of the tinaneial aspeets of the projeet. Annual assessments will inerease
from $50 per share, to $70.00 per share with a Construetion Fund loan of $450,000. (Annual
assessment inerease of $20.00.)

Table 3. FinaJ1cial Summary

Projeet Cost $500,000
Loan Amount (90% of Projeet Cost) $450,000
CWCB Loan Payment Amount, ineluding 10% loan reserve $28,626
Number of Shareholders 145
Number of Shares of Stoek 996.5
Current Assessment per Share $50.00
Future Assessment per Share $70.00
Annual Projeet Cost per Aere-Foot $0.95
(Based on total annual diversions: 30,000 aere-feet)

Water is used by the shareholders for agrieultural purposes. The OCSIC would qualify for the
CWCB Agrieultural Lending rate.

As seeurity for the loan the OCSIC will pledge revenues from assessments, and additional
collateral in aeeordanee with CWCB Loan Polley # 5.

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