BOARD02413

• Board Meeting Date: 3/22/2005
• Description: CF Section - Construction Fund/Severance Tax Trust Fund Perpetual Base Acct. New Loans Lower Sacramento Creek Reservoir Company - Reservoir Rehabilitation Project
• Board Meetings - Doc Type: Memo

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Agenda Item 14a

Lower Sacramento Creek Reservoir Company
March 15, 2005
Page 4 of4

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Creditworthiness: The Company has no other debt. Repayment of the loan will be accomplished by
increasing share assessments as necessary.

Table 3 shows the Financial Ratios for the Company to be Average to Strong. The Company
adjusted the assessment rates in 2002 to cover engineering costs associated with the Project. The
share assessment is estimated to increase from $2.00/share to $9.221share. This increase equates
to an annual charge of $28 per Lot augmented by the Company (Based on an average of 3.0 shares
per Lot), or $2.33 per month.

Table 3. Financial Ratios

Financial Ratio Without Project With Project
Previous Years Future Years
Operating Ratio (revenues/expenses) 250% 1,113%
I weak: <100% I-I average: 100% - 120% 1- I strong: >120%~ (Strong) (Strong)'
Debt Service Coverage Ratio 100%
(revenues-expenses)/debt service N/A
I weak: <100% 1- I averaoe: 100% - 120% I-I strano: >120%1' (Average)
Cash Reserves to Current Expenses 783% 84%
'weak: <50% I. r average: 50% - 100% '-Istrong: >100%t (Strong) (Average)
Average Monthly Charge per Lot (Assume 3 shares/Lot) $0.50** $2.33**
tweak: >$60 I-I average: $10 - $601-1 strong: <$101 (N/A) (N/A)

"This percent is very high due to the Company's low operating cost ($3.000) compared to the lulure debt service ($29,392)
"" These costs -are not applicable since the Lot owner also has O&M costs for the individuals well that is not included

Collateral: As security for the CWCB loan the Company will pledge assessment revenue and the
Lower Sacramento Creek Reservoir. This security is in compliance with CWCB Loan Policy #5
(Collateral).

Staff Recommendation

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Staff recommends a loan not to exceed $375,013 ($371,300 for project costs and $3,713 for the 1 %
Loan Service Fee) to the Lower Sacramento Creek Reservoir Company for engine'ering and
construction costs associated with the Lower Sacramento Creek Reservoir Rehabilitation Project,
from the Construction Fund. The terms shall be based on the current middle-income municipal rate
of 3.75% per annum for a 20-year loan. Final approval of the loan shall be conditioned upon all .
standard contracting provisions of the CWCB Loan Program. Security for the loan shall be collateral
in compliance with CWCB Loan POlicy #5.

Email copy:

William Blatchley, Company SecretaryfTreasurer and Manager
Amy Stengel, AGO

Attachment: Water,Project Construction Loan Program - Project Data Sheet

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