BOARD00959

• Board Meeting Date: 7/25/2006
• Description: CF Section - New Project Loans - Lincoln Park Crooked Ditch Company - Ditch Rehabilitation Project
• Board Meetings - Doc Type: Memo

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Lincoln Park Crooked Ditch Company
July 25-26, 2006

Agenda Item 8a

Table 1 is a summary of the financial aspects of the project. A CWCS Loan of $1,800,000 would
have an annual payment of $104,310 (including the 10% reserve requirement) at the loan terms of e
3.25% for 30 years.

Table 1. Financial Summary

Project Cost $2,000,000
Number of Shareholders 362
Number of Shares of Stock (3675 total- 275 inactive shares) 3400
CWCS Loan Amount (30 vears) $1,800,000
CINCS Loan Pavment (includes 10% reserve) $104,310
Current Assessment oer share (2006) $12
New Assessments oer share $39
Annual Loan Cost oer acre-foot (aver. annual deliverv: 1,850 ac-fU $56.40

Creditworthiness: LPCDC has no existing debt.

Table 2 shows the Financial Ratios and indicates overall average ability to repay the $1,800,000
CWCS loan, with the increased assessment. Maintenance and repair costs are expected to
decrease significantly with the new project. While there will be a significant increase in ditch
assessments with the project, the cost of water is still reasonable compared to the cost of irrigating
with Canon City water. For instance, Canon City's out-of-city rates per quarter (3 months) are: 0-
12,000 gallons - $48 base charge; 12,000 to 20,000 gallons - $4.00 per 1000 gal.; and> 20,000
gallons - $3.01 per 1000 gal. At the latter rate, the cost of irrigating with City water would be $980
per acre-foot.

Table 2. Financial Ratios

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Financial Ratio Without With project
the project Future Year
fAver.2003-04)
Operating Ratio (revenue/expense)
weak: less than 100% 105% 413%
average: 100% - 120% (aver.) (strong)
slrOnQ: Qrealer than 120%
Debt Service Coverage Ratio
(revenues-expenses)/debt service N/A* 100%
weak: less than 100% (aver.)
average: 100% - 125%
stronQ: arealerthan 125%
Cash Reserves to Current Expense
weak: less than 50% 13.5% 5%
average: 50% - 100% (weak) (weak)
stronQ: Qreater than 100%
Annual Operating Cost per Acre-Ft. (1,850 AF)
weak: greater than $20 $23.50 $74
average: $10 ' $20 (weak) (weak)
strong: less than $10

* Vaiue is not applicable (N/A) since LPCDC has no existing debt.

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