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<br />. <br /> <br />Page 2 - Policy # 4 <br />Creditworthiness <br /> <br />Where appropriate a current credit report or other <br />documentation from financial institutions that the project <br />sponsor has done business with, <br /> <br />CWCB staff will review these submittals to determine the <br />following: <br /> <br />The project sponsor's assets, liabilities, net equity and net <br />Income, <br /> <br />The extent to which revenues will be available to offset all <br />anticipated expenditures over the period of debt retirement, <br /> <br />Total long.term debt of the entity at the present time and <br />over the period of debt retirement, <br /> <br />Number of water users or shareholders to participate in <br />debt repayment, and . <br /> <br />The financial ratios in the following table (the rating <br />system is suggested only as a guideline for the analyses), <br /> <br />Ratio Weak Average Strong <br />Operating Ratio (1) <100% 100-120 % >120% <br />Debt Service Coverage Ratio (2) <100% 100-125% >125% <br />Debt per Tap (3) >$5,000 $2,500-$5,000 <$2,500 <br />Cash Reserves to Current Expense <50% 50-100% > 100% <br />Annual Cost per Acre.Foot (Agric,) >$20 $10-$20 <$10 <br />Monthly Resid, Water Bill (Munic,) >$60 $30 <br /> <br />(1) Operating revenue/operating expense <br />(2) (Total eligible revenues - operating expenses)/total debt service <br />(3) Total long-term debt/number of taps <br /> <br />The analysis of creditworthiness will be based on all of the <br />available preceding indicators as interpreted by the CWCB staff. <br />Should the analysis indicate that a potential borrower might not be <br />creditworthy, staff will prepare a set of recommendations for ( <br />measures that could improve the borrower's ability to repay the . <br />loan, The project sponsor must adopt share assessments and/or <br /> <br />2 <br />