BOARD00564

• Board Meeting Date: 1/23/2002
• Description: CF Section - Appleton ‎(ML 369)‎ Lateral and Drainage Corporation
• Board Meetings - Doc Type: Memo

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.When construction is complete, the Company will receive $161,630 in NRCS cost share. These
funds will be used to pay all outstanding construction costs, and to reduce the CWCB loan amount
to $87,000.

Water is used primarily for agricultural purposes and the Staff is recommending a Small Project
loan in maximum amount of $100K during construction, reducing to $87,000 once construction is
complete. The recommended loan terms are 30 years at 2.75%.

Alternative financing sources: The Company actively sought alternative financing. They were
able to get an in-kind grant from the NRCS to cover project planning and design (value about
$19,270), as well as an NRCS cost share grant in amount of $161 ,630 for construction. They also
requested a loan from their local bank (The Bank of Grand Junction) but were turned down because
the bank does not provide long-term fixed rate financing for agricultural projects.

Table 2 is a summary of the financial aspects of the project. A CWCB Loan of $87K would have an
annual payment of $4,730 (including the 10% reserve requirement) at the loan terms of 2.75% for
30 years. This represents $5 per acre-foot, based on average annual diversions of about 950 acre-
feet.

Table 2. Financial Summary

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Project Cost
Number of Shareholders
Number of Shares of Stock
CWCB Loan Amount
CWCB Loan Payment (includes 10% reserve)
Current Assessment per share
New Assessments per share
Annual Loan Cost per acre-foot (Average diversions 950 ac-ft.)

$267,900
28
28
$87,000
$4,730
$100
$220
$5

Credit worthiness: The ANLDC has no existing debt. Table 3 shows the Financial Ratios for the
ANLDC and indicates, with the exception of cash reserves, average to strong ability to repay the
$87K CWCB loan with the project in place.

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Financial Ratio Without With
the project the project
Operating Ratio (revenue/expense) 135% 112%
weak: less than 100% (strong) (average)
average: 100% - 120%
strong: greater Ihan 120%
Debit Service Coverage Ratio No Debt 115%
(revenues-expenses)/debt service (strong) (average)
weak: less than 100%
average: 100% - 125%
strong: greater than 125%
Cash Reserves to Current Expense 92% 42%
weak: less than 50% (average) (weak)
average: 50% - 100%
strong: greater than 100%
Annual Cost per Ac-Ft (950 ac-ft diverted) $2.95 $6.48
weak: greater than $20 (strong) (strong)
average: $10 - $20
strong: less than $10

Table 3. Financial Ratios

Flood Protection. Water Project Planning and Financing. Stream and Lake Protection
Water Supply Protection. Conservation Planning