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<br />. <br /> <br />The WDC is requesting a 20-year loan from the CWCB. The standard agricultural lending rate <br />would be 3.75%, resulting in annual payments of $2,878. To this would be added $288 per year <br />for the first 10 years to fund the emergency reserve account, for a total annual cost of $3.166, <br />Table 4 is a summary of the financial aspects of the project. Annual assessments are expected <br />to decrease from $23 per share, down to $15 per share with a loan of $40,000, because of <br />estimated $10,000 annual savings in repair and maintenance expenses, In addition, the <br />Company expects to divert additional water once the project is complete. <br /> <br />Table 4. Financial Summary <br /> <br />Project Cost $162,750 <br />CWCB Loan Amount (25% of Project Cost) $ 40,000 <br />CWCB Loan Payment, including 10% loan reserve $3,166 <br />Number of Shareholders 13 <br />Number of Shares of Stock 738.5 <br />Current Average Assessment per Share (1997-1999) $23 <br />Future Average Assessment per Share $15 <br />Annual Project Cost per acre-foot: <br />Based on average diversions for the last 10 years: 474 acre-feet: $6.67 <br />Based on average diversions expected in future: 975 acre-feet: $3,25 <br /> <br />. <br /> <br />Since all other funding for the project is in the form of grants, the Company would have no other <br />debt service on this project. Operation and maintenance costs are expected to decrease with <br />the new diversion structure, and can be accommodated by the Company's existing budget. <br /> <br />Credit worthiness: WDC has no existing debt. Table 5 shows the Financial Ratios for the WDC <br />and indicates, with the exception of cash reserves, average ability to repay with the project in <br />place, <br /> <br />Table 5. Financial Ratios <br /> <br />Financial Ratio Without the project With the project <br />Operating Ratio (revenue/expense) 98% (weak) 105% (average) <br />Debit Service Coverage Ratio No debt (strong) 115% (average) <br />(revenues-expenses)/debt service <br />Cash Reserves to Current Expense 3% (weak) 19% (weak) <br />Annual Cost per Acre-Foot $36 (weak) $11 (average) <br /> <br />Alternative financing considerations: The WOC has investigated alternative financing <br />sources. They have obtained an in-kind grant from the NRCS for engineering design and <br />construction inspection (valued at $12,750.), The WDe has also obtained $70,000 in cost share <br />(grant) from the NRCS, as well as a $40,000 grant from the UYWCO, Long-term financing for <br />the Company's portion of the construction costs ($40,000) could not be attained elsewhere, and <br />the cost could not be financed internally with a one-time assessment. The Company's <br />commercial bank (Norwest Bank, Steamboat Springs) declined to loan any money on the <br />project. The NRCS statement of Cost Share, the UYWCD resolution authorizing a grant, and the <br />Norwest Bank letter of denial are included in Appendix G, <br /> <br />. <br /> <br />Woodchuck Ditch Company <br />Feasibility Study <br />March 2000 <br /> <br />Page 11 of 13 <br />