BOARD02302

• Board Meeting Date: 11/22/1999
• Description: CF Section - Emergency Loan Request - Chilcott Ditch Company
• Board Meetings - Doc Type: Memo

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Chilcott Ditch Co.
November 22-23,1999. Agenda Item 14a.

Table 1. Financial Summary

Project Cost $1,000,000
Loan Amount (75% of Project Cost) $250,000
CWCS Loan Payment Amount, including 10% loan reserve $15,903
Number of Shareholders 16
Number of Shares of Stock 105
Current Assessment per Share $125
Future Assessment per Share $276
Annual Project Cost per acre-foot $2.14
(Average annual diversions: 7.425 acre-feet)

Table 2. Financial Ratios

Financial Ratio Without the project With the project
Operating Ratio (revenue/expense) 64% (weak) 100% (average)
Debit Service Coverage Ratio No debt (strong) 110% (average)
(revenues-expenses)/debt service
Cash Reserves to Current Expense 196% (strong) 113% (strong)
Annual Cost per Acre-Foot $1.76 (strong) $3.90 (strong)

Recommendation
Staff recommends that the CWCS find that the Chilcott Ditch Company is eligible for a loan
from the Emergency Infrastructure Repair Account because: "the project is necessary to avoid
unreasonable risk of injury or damage to human health or well-being or to property or crops,
and because the emergency condition is not the result of negligence in the operation or
maintenance of the infrastructure."

Staff recommends an Emergency Loan not to exceed $250,000 to the Chilcott Ditch Company
for up to 25% of the costs to rebuild the Company's diversion structure on Fountain Creek. The
recommended term of the loan is 30 years and the lending rate would be that rate approved by
the CWCS for Agricultural borrowers in 2000. Security for the loan will be a pledge of
assessment revenues backed by assessment covenant, one payment in a certificate of deposit
account to be held by the State, and the project itself.

Staff further recommends that final approval of the loan be conditioned upon acceptance of the
project and the associated financial obligations by a vote of the shareholders of the Company,
completion of the feasibility study by December 31, 1999, and all standard contracting
provisions of the CWCS.

cc: Glen Ermel, President Chilcott Ditch Co.
John Andrews, P.E., NRCS
Linda Bassi, AGO
Attachment

C:\ WP51 \Proj.New\ChilcotlDitchDiversion 1199memo
L:\boardmemlnov99\ 14a.Nov99

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