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Town of Coal Creek March 24-2625, 2001 Agenda Item 24f. (Updated March 28, 2003) Page 3 a e own 0 oa ree . mancla ummary Proiect Cost $75,000 CWCB Loan Amount $67,500 CWCB Loan Pavment (includes 10% reserve.) $4,165 Number of Taps 165 Annual Loan Cost per acre-foot (34 acre-feet consumptive use) $123 T bl 1 T f C I C k F' , IS Credit worthiness: The Town has no debt. Table 2 shows the Financial Ratios and indicates, with the exception of Cash Reserves, average to strong ability to repay with the CWCB loan in place, Table 3. Financial Ratios Financial Ratio Without the project With the project Operating Ratio (revenue/expense) 112% (average) 106% (average) weak: less than 100% average: 100% - 120% strang: greater than 120% Debt Service Coverage Ratio No Debt (strong) 199% (strong) (revenues-expenses)/debt service weak: less than 100% average: 100% - 125% strano: areater than 125% Cash Reserves to Current Expense 44% (weak) 30% (weak) weak: less than 50% average: 50% - 100% strong: greater than 100% Monthly Residential Water Bill $25,00 (strong) $25,00 (strong) weak: greater than $60 average: $30 - $60 strang: less than $30 As security for the loan the Town will pledge revenues backed by rate covenant. (This security is in compliance with CWCB Loan Policy #5 (Collateral). Recommendation Staff recommends a Small Project loan from the Construction Fund in amount of $67,500 to the Town of Coal Creek (acting by and through its enterprise fund) to pay for up to 90% of the cost to purchase water rights. The recommended loan terms are 30 years at 3,75% (3,832% Annual Percentage Rate.) As security for the loan the Town will pledge revenues backed by rate covenant in compliance with CWCB Loan Policy #5 (Collateral). Staff further recommends that final approval of the loan be conditioned upon all standard contracting provisions of the CWCB, including the 1% loan origination fee charged in accordance with CWCS Policy #16, The maximum loan amount may be increased to $68,175 if the borrower elects to finance the 1 % ioan service charge, An appraisal or written opinion of value of the water shares must also be provided by the Borrower as a condition of obtaining the CWCB loan. Action taken bv the ewcs March 26. 2003 The CWCB approved the Staff Recommendation, with the revision shown above, cc: Charles Hastings, Mayor, Town 01 Coal Creek, P,O, Box 36, Coal Creek, CO 81221 Linda Bassi, AGO Attachment C:\CoaICreek 303memo L:'boardmem\mar(J3\241 - Town 01 Coal Creek 3