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Last modified
8/16/2009 3:01:21 PM
Creation date
10/4/2006 6:54:35 AM
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Board Meetings
Board Meeting Date
3/24/2003
Description
CF Section - Low Line Ditch Company - Loan Increase
Board Meetings - Doc Type
Memo
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<br />/ <br /> <br />r' <br /> <br />e <br /> <br />e <br /> <br />e <br /> <br />Low Line Ditch Company <br />March 24-26, 2003 <br /> <br />Agenda Item 25a <br /> <br />Financial Analvsis <br />The total estimated cost of this added project is $72,500 (including engineering costs). Water is <br />used for agricultural purposes and the Staff is recommending an increase to the existing Small <br />Project loan in maximum amount of $65,250, such that the new loan amount would be <br />$159,750. The recommended loan terms would remain unchanged: 30 years at 2.75% or 20 <br />years at 2.5%. (The Company has requested loan terms of 20 years at 2.5%.) <br /> <br />Table 1 is a summary of the financial aspects of expanded project with a new CWCS loan <br />amount of $159,750. The annual payment would be $11,272 (including the 10% reserve <br />requirement) at the loan terms of 2.75% for 20 years. This represents $1.70 per acre-foot, <br />based on average annual diversions of 6,650 acre-feet. <br /> <br />Table 1. Financial Summary <br /> <br />New Total Cost <br />Number of Shareholders <br />Number of Shares of Stock <br />New CWCS Loan Amount <br />New CWCS Loan Pa ment includes 10% reserve <br />Current assessment er share <br />New assessment er share <br />Annual Loan Cost er acre-foot <br /> <br />$177,500 <br />14 <br />320 <br />$159,750 <br />$11,272 <br />$25 <br />$60 <br />$1.70 <br /> <br /> <br />Credit worthiness: The LLDC has no existing debt, other than the CWCS loan. Table 2 shows <br />the Financial Ratios for the LLDC and indicates, with the exception of Cash Reserves, average' <br />to strong ability to repay the new CWCS loan amount of $159,750. <br /> <br />Table 2. Financial Ratios <br /> <br />Financial Ratio Without With <br /> the oroiect The proiect <br />Operating Ratio (revenue/expense) 110% 105% <br />weak: iess than 100% (average) (average) <br />average: 100% - 120% <br />strono-: oreater than 120% <br />Debit Service Coverage Ratio No Debt 109% <br />(revenues-expenses)/debt service (strong) (average) <br />weak: less than 100% <br />average: 100% - 125% <br />strona: oreater than 125% <br />Cash Reserves to Current Expense 27% 14% <br />weak: less than 50% (weak) (weak) <br />average: 50% - 100% <br />strano: oreater than 100% <br />Annual Cost per Ac-Ft (6,650 ac-ft diverted) $1.92 $3.61 <br />weak: greater than $20' ' (strong) (strong) <br />average: $10 - $20 <br />strono: less than $10 <br /> <br />As security for the loan the LLDC will pledge assessment revenues backed by assessment <br />covenant and the project associated with this new larger loan amount. This security is in <br />compliance with CWCS Loan Policy #5 (Collateral). <br /> <br />3 <br />
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