BOARD01159

• Board Meeting Date: 3/16/2004
• Description: CF Section - Terrace Irrigation Company
• Board Meetings - Doc Type: Memo

Terrace Irrigation Company
March 17. 2004

Agenda Item 25e,

Table 3. Financial Ratios

Financial Ratio Without With
the proJect the oroject
Operating Ratio (revenue/expense) 95% 103%
weak: less than 100% (weak) (average)
average: 100% - 120%
strong: greater than 120%
Debt Service Coverage Ratio 92% 101%
(revenues-expenses)/debt service (weak) (average)
weak: less than 100%
average: 100% - 125%
strong: greater than 125%
Cash Reserves to Current Expense 98% 85%
weak: less than 50% (average) (average)
average: 50% - 100%
strong: greater than 100%
Annual Cost per Ac-Ft diverted (15,339 ac-ft) $12 $12.79
weak: greater than $20 (average (average)
average: $10 - $20
strong: less than $10

As security for the loan, the TIC will pledge assessment revenues backed by an assessment
covenant, and the project itself, sufficient to assure repayment of the loan. This security is in
compliance with CWCB Loan Policy #5 (Collateral).

RECOMMEDATION
Staff recommends a CWCB Small Project loan from the Severance Tax Perpetual Base Account
in an amount up to $245,430 ($243,000 for project costs and $2,430 for the 1 % loan origination
fee, in accordance with CWCB Loan Policy 16) to the Terrace Irrigation Company. The loan is
for up to 90% of the cost to rehabilitate Terrace Reservoir and to repay project costs already
incurred. The recommended term of the loan is 30 years and the recommended interest rate is
2.5% (2.556% Annual Percentage Rate.) Security for the loan will be a pledge of assessment
revenues backed by an assessment covenant, and the project itself, adequate to assure repayment
of the loan, in accordance with CWCB Loan Policy #5.

Staff further recommends that final approval of the loan be conditioned upon all standard
contracting provisions of the CWCB.

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