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<br />e <br /> <br />a little weak when compared to operating expenses, but are probably not a matter of <br />concem. Total equity, or net worth, in 1997 was about $26 million. Total current long- <br />term debt amounts to $6.7 million, which will be retired by March 2002. <br /> <br />Table 3. Financial Indicators, 1995 -1997 <br /> <br />Ih'" ,!t__lt~ 1III&19~:S" __fe:.9~ mlfijjl1'9~:U~'i" <br />< ~jyd.l j , ; Mk'%" ^~;;,"" <br />Operating Ratio (1) 1.19 1.29 1.25 <br />!Debt per Tap $275 $226 $176 <br />Debt Service Coverage (2) 1.60 3.14 2.44 <br />Cash Balance, End of Year $2,139,531 $3,861,664 $3,889,810 <br /> <br />(I) Operating revenue/( operating expense - depreciation) <br />(2) (Total eligible revenue - actual operating expense)/debt service <br /> <br />Consolidated is requesting a ten-year loan for $10 million or approximately 50 percent of <br />total project costs. Staff recommends the municipal high income lending rate for this loan <br />based on the 1990 median household income of$34,000 for the City of Lakewood. The <br />actual rate would be 4.75 percent, which is the municipal high-income rate adjusted for a <br />ten-year term. <br /> <br />e <br /> <br />For the approximately $11.6 million of project costs not covered by the requested <br />Construction Fund loan, the Company has already expended $2.7 million. The remaining <br />$8.9 million will be covered through a series of water rate increases averaging about 3.5 <br />to 4.0 percent per year over the next four years. <br /> <br />A 14-year financial projection provided by the Company indicates that future revenues <br />will be sufficient to provide an adequate cash reserve through the period of construction <br />and CWCB debt retirement. Debt service coverage ratios are weak for the years 1999, <br />2000 and 2001 but return to an acceptable level in each year thereafter. Tap fees amount <br />to only a very minor part of total revenues. <br /> <br />The average residential water bill is expected to increase from the current level of $32 per <br />month to about $37 per month over the next four years as a result of the project. Water <br />rates are expected to decrease somewhat in following years. <br /> <br />Alternative Sources of Fundinl! <br /> <br />As a private entity, Consolidated is not eligible for funding from the Colorado Water <br />Resources and Power Development Authority or from other agencies that provide <br />funding to public entities. The Company does not have taxing authority or the ability to <br />issue municipal bonds. The only option available is commercial bank lending which <br />Consolidated estimates would increase the cost ofproject financing by about $3.4 <br />million. <br /> <br />e <br /> <br />4 <br />