BOARD00837

• Board Meeting Date: 9/13/2004
• Description: CF Section - New Loans - Bull Creek Reservoir, Canal & Power Company - Bull Creek Reservoir Nos. 1, 2 and Rehabilitation and Enlargement
• Board Meetings - Doc Type: Memo

...

Bull Creek Reservoir, Canal & Power Company
September 7. 2004
Page 4 of 5

Agenda Item 4d

Table 2. Financial Summary of Project

e

Total Proiect Cost $660,000
CWCB Loan 190% of Total Proiect Cosf)' $594,000
CWCB Annual Loan Pavment $28,380
CWCB Loan Obliaation lincludina 1 0% debt reselVe) $31,218
Annual Assessment for Project Only (based on 500 shares) $62/share
Annual Project Cost per acre-foot protected (based upon 229 acre-ft) $136/ac-ft

. The remaining cost (10%) will be funded by special assessments of approximately $130/share.

Creditworthiness: The Company will payoff a current loan of $50,000 held by the Palisades National
Bank (PNB) in Palisade, Colorado with a CWCB loan. The PNB loan was used to begin
reconnaissance work on this Project. The Company will have no other debt selVice on this Project.
Repayment will be accomplished by increasing share assessments as necessary.

Table 3 shows the Financial Ratios for the Company. The Company has adjusted the assessment rates
as needed for the last four years in order to cover operating and repair costs therefore the ratios
indicate average strength. Rate increases were as follows: 2000 - $5/share; 2001 - $7/share; 2002-
$20/share; 2004 - $30/share; 2005 - $82/share.

Cash reselVes are weak, however, this is typical of irrigation and ditch companies since they attempt to
, set assessment rates at or near operating costs. Annual operating costs per acre-foot are weak. The
members of the Company have attempted to reduce the operations costs in the last couple of years.
The Project cost significantly affects the cost per acre-foot ratio. IIV Johnson, President has indicate.
that the membership understands that without the Project the loss of the storage water has a greate.
value. Ute Water ConselVancy District has shown support for the project and indicates a value of this
stored water at $2,OOO/ac-ft.

Table 3. Financial Ratios

Financial Ratio Without Project With Project
Previous Years Future Years
Operating Ratio (revenue/expense) $100 100%
I weak: <100% 1'1 average: 100%, 120% 1,1 strong: >120'4 (average) (average)
Debit SelVice Coverage Ratio No Debt SelVice 100%
(revenues-expenses)/debt selVice
I weak: <100% 1- I averaoe: 100%,120% 1- I strono: >120%1 Payment (average)
Cash ReselVes to Current Expense 48% 10%
I weak: <50% I-I average: 50% - 100% I-I strang: >100%1 (weak) (weak)
Annual Operating Cost per Acre-Ft. (850 AF) $12 $48
!weak: >$201,1 average: $10 - $20 I-I strong: <$101 (average) (weak)

Collateral: As security for this loan the Company will pledge assessment revenues backed by an
assessment covenant and Bull Creek ReselVoir No.4 storage rights of 31,3 ac-ft. This security is in a
compliance with CWCB Loan Policy #5 (Collateral). .,