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<br />Town of Paonla - Water Rights Purchase <br />January 22.23. 2003 <br /> <br />Agenda Item 1911 <br /> <br /> Monthly Cumulative Additional <br />Year Increase Increase: Revenue <br />2004 $1.50 $1.50 $24,966 <br />2005 $1.50 $3.00 $49,932 <br />2006 $1.50 $4.50 $74,898 <br />2007 $1.50 $6.00 $99,864 <br /> <br />The Town hopes to sell the land to an adjacent ranching operation. Alternatively, The <br />Conservation Fund may locate another private conservation-oriented buyer for the land component <br />of the property. If either of these happen, the propos~d water rate increase might only be needed <br />for two years, 2004 and 2005, resulting in an overall ihcrease of $3.00 per month per tap. This <br />would be a total increase of 29% over existing rates. . <br /> <br />Creditworthiness: The Town currently has no outstanding loans through the Water Fund. In <br />1993, the Town obtained a $150,000 State Impact Assistance Loan to help finance the construction <br />of a water treatment plant. The final annual payment. of $22,103 was made in 2001. <br /> <br />Table 3 shows the Financial Ratios for the Town and ,indicates strong ability to repay the <br />$1,000,000 CWCB loan and $710,000 in bond fundin'g. For the purpose of calculating financial <br />ratios, tap fees were not included, except as shown i(l the first year of loan repayment in 2004. <br /> <br />Table 3. Financial Ratios <br /> <br /> Existing With Project <br /> (Average Future Years wI Proposed Rate <br />Financial Ratio (1999-2001) i Increases <br /> . 2004 2005 2006 2007+ <br />Operating Ratio (revenue/expense) . <br />weak: less than 100% 152% 133% 142% 152% 161% <br />average: 100% - 120% (strong) (strong) (strong) (strong) (strong) <br />strong: greater than 120% <br />Debt Service Coverage Ratio <br />(revenues-expenses )/debt service 468% 101%' 102% 125% 148% <br />weak: less than 100% (strong) (average) (average) (strong) (strong) <br />average: 100% - 125% <br />strona: areater than 125% . , <br />Cash Reserves to Current Expense <br />weak: less than 50% 102% 54% <br />average: 50% - 100% (strong) (average) <br />strona: areater than 100% . . <br />Debt per Tap <br />weak: greater than $5000 N/A $1233 <br />average: $2500 - $5000 (Strong) <br />strona: less than $2500 <br />Monthly Water Bill <br />average: $30 $10.50 $12.00 to $16.50 <br />weak: greater than $60 (Strong) (Strong) <br /> <br />Page 6 bf 8 <br /> <br />. <br /> <br />. <br /> <br />. <br />