BOARD01031

• Board Meeting Date: 3/20/2000
• Description: CF Section - Riverside Reservoir and Land Company
• Board Meetings - Doc Type: Memo

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Riverside Reservoir and Land Co. Agenda Item 15b.
March 20-21, 2000

The implementation schedule calls for completion of financing arrangements in spring 2000,
with formal approval and resolution by the RRLC shareholders in summer 2000. Engineering
design will be finalized by September 2000, and construction is scheduled for completion in
January 2001.

Financial Analvsis
The total estimated cost of the project is $450,000. Staff is recommending a loan of $405,000
(90 percent of the estimate cost.) CWCS policy allows for 90% loans to agricultural and
municipal low income borrowers (policy set at the November 24-25,1997 CWCS meeting.)
Agriculture has not been a participant in the recent economic boom. The RRLC increased its
assessments by $10 per right 217/00, and no further increase is expected to cover the loan
payment. The Company may need to establish a one-time assessment to raise the remaining
10 percent of the project cost, and to fund the one-payment CD that will be collateral for the
loan. That assessment would be approximately $27 per private right (share) for 2000 only.

Table 2 is a summary of the financial aspects of the project. Annual assessments will remain at
$70 per share with a Construction Fund loan of $405,000. The recent $1 O/share assessment
increase represents $0.22 per acre-foot, based on average annual diversions 113,111 acre-
feet.

Table 2. Financial Summary

Project Cost $450,000
Loan Amount (90% of Project Cost) $405,000
CWCS Loan Payment Amount, including 10% loan reserve $25,763
Number of Shareholders 103
Number of Shares of Stock (Private rights) 2,505
Current Assessment per Share $70
Future Assessment per Share $70
Annual Project Cost per acre-foot $0.22
(Average annual diversions: 113,111 acre-feet)

Water is used by the shareholders for agricultural purposes. The RRLC would qualify for the
CWCS Agricultural Lending rate (4% for 30 years.) The RRLC has no existing debt.

Table 3. Financial Ratios

Financial Ratio Without the project With the project
Operating Ratio (revenue/expense) 106% (average) 116% (average)
Debit Service Coverage Ratio No debt (strong) 114% (average)
(revenues-expenses)/debt service
Cash Reserves to Current Expense 29% (weak) 32% (weak)
Annual Cost per Acre-Foot $1.81 (strong) $2.00 (strong)

As security for the loan the RRLC will pledge revenues from assessments, one payment in a
certificate of deposit account to be held by the State, and the project itself.

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