BOARD01692

• Board Meeting Date: 1/27/2004
• Description: CF Section - Lower Platte and Beaver Canal Company
• Board Meetings - Doc Type: Memo

,,..

.

.

.

Lower Platte and Beaver Canal Company
January 27-28, 2004

Agenda Item 14a.

99.4% of the LPBCC shares, and 0.6% of the shares are owned by municipal low-income
entities. The blended interest rate would be 2.5%; equal to the CWCB agricultural rate.)

Table 1 is a summary of the financial aspects of the project. A CWCB Loan of $31 0,500 would
have an annual payment of $16,318 (including the 10% reserve requirement) at the loan terms
of 2.5% for 30 years. This represents $0.44 per acre-foot, based on average canal diversions of
36,980 acre-feet. The LPBCC will fund their 10% cost share from 2004 assessments. The
Company will also use its existing Bank line of credit to finance the project, until the CWCB loan
becomes available.

Table 1. Financial Summary
Project Cost $345,000
Number of Shareholders 90
Number of Shares of Stock 1476
CWCB Loan Amount $310,500
CWCB Loan Payment (includes 10% reserve) $16,318
Current Assessment oer share $65
New Assessments oer share (with CWCB loan + O&M of $75,000f $127
Annual Loan Cost per acre-foot (AveraQe diversions: 36,980 acre-feet. \ $0.44

Credit worthiness: The LPBCC has no existing long-term debt. Table 2 shows the Financial
Ratios for the LPBCC and indicates, with the exception of cash reserves, average to strong
ability to repay the new $310,500 CWCB loan with the project in place. (Note: Shareholders of
the LPBCC previously were members of GASP and paid a total of about $119,000 per year for
augmentation of their wells. These GASP dues can now be used to help pay assessments of
the LPBCC.)

Table 2. Financial Ratios

Financial Ratio Without With
the proiect the nroiect
Operating Ratio (revenue/expense) 105% 101%
weak: Jess than 100% (average) (average)
average: 100% . 120%
strono: areaterthan 120%
Debt Service Coverage Ratio No long-term debt 120%
(revenues-expenses)/debt service (strong) (average)
weak: less than 100%
average: 100% . 125%
strono: areater than 125%
Cash Reserves to Current Expense 25% 14%
weak: less than 50% (weak) (weak)
average: 50% - 100%
strOng: areater than 100%
Annual Cost per Acre-Foot (51,980 AF total) $ 1.62 $4.07
Weak: greater than $20 (strong) (strong)
average: $10 - $20
strong: less than $10

As security for the loan the LPBCC will pledge assessment revenues backed by assessment
covenant and key portions of the project (the recharge well, the Company's interest in the
pipeline, the perpetual easements upon which the well and pipeline are located, and 2 key
recharge sites and deeded land upon which they are located.) This security is in compliance
with CWCB Loan Policy NO.5 (Collateral).

3