BOARD01203

• Board Meeting Date: 9/10/2002
• Description: CF Section - Lake Arrowhead Water Association
• Board Meetings - Doc Type: Memo

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Lake Arrowhead Water Association
September 11-12, 2002

Agend~ Item 12d.

Table 1. Financial Summa

Pro'ect Cost
Number of Customers
Number of Shares of Stock
CWCS Loan Amount
CWCS Loan Pa ment includes 10% reserve
Annual Loan Cost er acre-foot Reservoir volume: 200 ac-ft.

$400,000
72
N/A
$300,000
$19,667
$98

Credit worthiness: The LAW A has no existing debt. Table 2 shows the Financial Ratios for the
LAWA and indicates 3 ratios in the strong/average category and one ratio in the weak category
with the $300K CWCS loan in place. However, the Annual Cost oer Acre-Foot is a ratio relating
to purely agricultural projects. Municipal type projects can typically support a much higher
annual co:>!.

Table 2. Financial Ratios

Financial Ratio

Without
The ro "ect
136%
(strong)

With
The ro 'ect
119%
(average)

Operating Ratio (revenue/expense)
weak: less than 100%
average: 100% - 120%
stron : reater than 120%
Debit Service Coverage Ratio
(revenues-expenses)/debt service
weak: less than 100%
average: 100% - 125%
stron ; reater than 125%
Cash Reserves to Current Expense
weak: less than 50%
average: 50% - 100%
stron : reater than 100%
Annual Cost per Acre-Foot (200 ac-ft)
weak: greater than $20
average: $10 - $20
stron : less than $10
As security for the loan the LAWA will pledge assessment revenues backed by assessment
covenant as well as the reservoir, water rights to fill the reservoir, and the land upon which the
reservoir is located. This security is in compliance with CWCS Loan Policy #5 (Collateral).

No debt
(strong)

149%
(strong)

194%
(strong)

53%
(average)

$90
(weak)

$179
(weak)

Recommendation
Staff recommends a Loan from the Small Project Account not to exceed $300,000 to the Lake
Arrowhead Water Association, Inc. to rehabilitate the Lake Arrowhead Dam. The recommended
term of the loan is 30 years and the recommended lending rate is 4.25%. Security for the loan
will be a pledge of assessment revenues backed by assessment covenant as well as the
reservoir, water rights to fill the reservoir, and the land upon which the reservoir is located.

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

cc: Dwight Giles, 5766 Arrowhead Dr., Greeley, CO 80634
John Gauthiere, PE, 2157 Buena Vista Dr., Greeley, CO 80634
Linda Bassi, AGO
Attachment
C:IWP51IProj-NewILakeArrowhead 902memo: L:\boardmemlSept02112d Sept 02 Lake Arrowhead

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