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<br />a little weak when compared to operating expenses, but are probably not a matter of <br />concern. Total equity, or net worth, in 1997 was about $26 million, Total current 10ng- <br />teffil debt amounts to $6;7 million, which will be retired by March 2002. <br /> <br />Table 3. Financial Indicators, 1995 -1997 <br /> <br /> <br />OperatlnllRi1tlo (1} <br />Debt'p~r),.ap",.\ <br />Pe6t;$~ryjceCoverage(2) <br />ca~lI;aal,ance;(End.9f.;Yel!l~"'" <br /> <br />1.19 <br />....,..\,~<i'7:"'..:.,; <br />.;;1~~;!';j;j'; '3.14 <br />../", "," ",'ii),' '..':$' ';, .... ;'+;;"'" <br />",?lI'n..1",",.z="'jl..,..' ""B""'."":QCA" <br />_,~ ;'I'l~';- i,~:~'H,,;;m /T'i, ;;'.; -'!J'f; -' J;.I4_oiU_~- - <br /> <br />1:25', <br />$it~& <br />..'.2',,'.....4"...'..4....,.,., <br />""!"" ,'. <br />,1$$;$8,9;'811) <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 Lake wood. The <br />actual rate would be 4.75 percent, which is the municipal high-income rate adjusted for a <br />ten-year teffil. <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/he project. Water <br />rates are expected to decrease somewhat in following years. <br /> <br />Alternative Sources of Fundinll <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 of project financing by about $3.4 <br />million. <br /> <br />4 <br />