BOARD00712

• Board Meeting Date: 3/24/2003
• Description: CF Secton - Town of Coal Creek
• Board Meetings - Doc Type: Memo

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Town 01 Coal Creek
March 24-2625, 2001

Agenda Item 241.

Table 1. Town of Coal Creek. Financial Summa

Pro'ect Cost
CWCB Loan Amount
CWCB Loan Pa ment includes 10% reserve.
Number.of Ta s
Annual Loan Cost er acre-foot (34 acre-feet consumptive use

$75,000
$67,500
$4 165
165
$123

Credit worthiness: The Town has no debt. Table 2 shows the Financial Ratios and indicates, with
the exception of Cash Reserves, average to strong ability to repay with the CWCS loan in place.

Table 3. Financial Ratios

Financial Ratio Without the Droiect With the Droiect
Operating Ratio (revenue/expense) 112% (average) 106% (average)
weak: less than 100%
average: 100% - 120%
strona: areater than 120%
Debit Service Coverage Ratio No Debt (strong) 199% (strong)
(revenues-expenses)/debt service
weak: less than 100%
average: 100% - 125%
strono: oreater than 125%
Cash Reserves to Current Expense 44% (weak) 30% (weak)
weak: less than 50%
average: 50% - 100%
strano: oreater than 100%
Monthly Residential Water Bill $25.00 (strong) $25.00 (strong)
weak: greater than $60
average: $30 - $60
strano: less than $30

As security for the loan the Town will pledge revenues backed by rate covenant. (This security is in
compliance with CWCB Loan Policy #5 (Collateral).

Recommendation
Staff recommends a Small Project loan from the Construction Fund in amount of $67,500 to the
Town of Coal Creek to pay for up to 90% of the cost to purchase water rights. The recommended
loan terms are 30 years at 3.75% (3.832% Annual Percentage Rate.) As security for the loan the
Town will pledge revenues backed by rate covenant in compliance with CWCB Loan Policy #5
(Collateral).

Staff further recommends that final approval of the loan be conditioned upon all standard contracting
provisions of the CWCB, including the 1% loan origination fee charged in accordance with CWCS
Policy #16. The maximum loan amount may be increased to $68,175 if the borrower elects to finance
the 1 % loan service charge. An appraisal or written opinion of value of the water shares must also be
provided by the Borrower as a condition of obtaining the CWCS loan.

cc: Cha~es Hastings, Mayor. Town of Coal Creek, P.O. Box 36, Coal Creek, CO 81221
Linda Bassi, AGO

Attachment

C:\CoaICreek 303mema
L:\baardmemlmar03\24f - Town of Coal Creek

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