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'I \ Beaver Creek Reservoir Company Agenda Item 14a November 9, 2004 Page 4 of 4 . Table 2 shows the Financial Ratios for the Company. The Company has adjusted the assessment rates as needed to cover operating and repair costs and therefore, the ratios are shown as strong. Rate history and projections are as follows: 2000 - $16.50/share; 2002 - $21.07/share; 2005- $25.29/share. The price per share was raised in 2001 in anticipation of the Project. The annual operating cost is weak due to the extensive improvements, which have been made in the last 10 years. Table 2. Financial Ratios Financial Ratio Without Project With Project Previous Years Future Years Operating Ratio (revenues/expenses) 422% 500% I weak: <100% I-I average: 100% -120% I-Istrong: >120'4 (Strong) (Strong) Debt Service Coverage Ratio 136% 127% (revenues-expenses)/debt service (Strong) (Strong) I weak: <100% 1- I averaoe: 100% - 120% 1- I strono: >120%1 Cash Reserves to Current Expenses 75% 18% I weak:<50% ~ -I average: 50% - 100% I-I strong: >100%1 (Average) (Weak) Annual Operating Cost per Acre-Ft. (1620 AF) $21 $25 !weak: >$20 I-I average: $10 - $20 I-I strong: <$101 (Weak) (Weak) . Collateral: As security for this loan the Company will pledge assessment revenues backed by an assessment covenant and a security interest in the Beaver Reservoir and two storage rights totaling 1620 acre-feet. This security is in compliance with CWCB Loan Policy #5 (Collateral). Staff Recommendation Staff recommends a loan not to exceed $129,785 ($128,500 for project costs and $1,285 for the 1 % Loan Service Fee) to the Beaver Reservoir Company for engineering and construction costs associated with the Beaver Reservoir Liner Protection & Valve Replacement Project, from the Severance Tax Trust Fund Perpetual Base Account. The terms shall be based on the current agricultural rate of 2.5% per annum for a 30-year term. Final approval of the loan shall be conditioned upon all standard contracting provisions of the CWCS Loan Program. Security for the loan shall be collateral in compliance with CWeB Loan Policy #5. Email copy: Jim Briscoe, Company SecretaryfTreasurer James Johnson, Golder Associates, Inc. Chad Henderson/Amy Stengel, AGO Attachment: Water Project Construction Loan Program - Project Data Sheet .