BOARD00628

• Board Meeting Date: 3/16/2004
• Description: CF Section - Fulton Irrigation Ditch Company
• Board Meetings - Doc Type: Memo

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Fulton Irrigation Ditch Company
March 17, 2004

Agenda Item 250.

FINANCIAL ANALYSIS
The total cost of the project is estimated at $200,000. Of the 7,185 shares of stock available in
the Company, 68% are currently being utilized for agricultural purposes, 26 percent for
municipal, and the remaining 6% for commercial. The municipal interest rate varies, based on
the average household income for the city or county where the water is being used. Currently,
the municipal rate varies from 3.25% for low income to 4.25% for high income for a 20-year
term. Municipal users are City of Brighton, City of Commerce City, City of Fort Lupton, City of
Northglenn, City of Thomton, and the South Adams Water and Sanitation District. Based on the
income level for each municipality, and given the number of shares owned by each, a weighted
interest rate of 3,71 % was calculated for municipal use. This interest rate was then blended with
the agricultural rate of 2.25% and the commercial rate of 5 .25%, based on the percentage of
shares for each category, from which an interest rate of2.8072 was calculated. Rounded to the
nearest tenth, the recommended interest rate for FIDC is 2.8%

Table 2 is a summary of the financial aspects of the project based on a $170,000 Colorado Water
Conservation Board Loan. The annual payment would be $12,338 (including a 10% reserve
requirement) at a loan term of2.8% for 20-years, Annual assessments will be increased from
$30 to $38 per share. This $8 assessment increase represents only $0.40 per acre-foot annual
loan cost, and based on average annual diversions of30,666 acre-feet.

T bI 1 F" , IS

a e . man cIa ummary
Proiect Cost $200,000
Loan Amount (85% of Project Cost) $170,000
CWCB Loan Pavment Amount, including 10% loan reserve $12,338
Number of Shareholders 220
Number of Shares of Stock 7,185
Current Assessment per Share $30
Future Assessment per Share $38
Annual Loan Cost per acre-foot $0.40
(Average annual diversions: 30,666 acre-feet)

Credit worthiness: FIDC has a short term loan for $100,000 from the South Adams County
Water and Sanitation District to assist in the initial funding of the project. This short term bridge
financing will be paid offby FIDC with Colorado Water Conservation Board loan funds.

Table 2 shows the Financial Ratios and indicates upon completion of the project, with the
exception of Cash Reserves, an average to strong ability to repay with the proj ect in place.

Table 2, Financial Ratios

Financial Ratio Without With
the project the pro;ect
Operating Ratio (revenue/expense) 64% 101%
weak: less than 100% (weak) (average)
average: 100% - 120%
strong: greater than 120%

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