PROJ00099

• Contract/PO #: C150048
• Contractor Name: Plumb and Dailey Ditch Company, The
• Contract Type: Loan
• Water District: 6
• County: Weld
• Bill Number: SPL
• Loan Projects - Doc Type: Feasibility Study

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Table 3. Financial Summary

Project Cost $46,620
Loan Amount (90% of Project Cost) $42,000
CWCB Loan Payment Amount, including 10% loan reserve $3,325
Number of Shareholders 13
Number of Shares of Stock 40
Current Assessment per Share $180
Future Assessment per Share $263
Annual Project Cost per acre-foot $1.46
(Average annual diversions: 2,278 acre-feet)

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Since all other funding for the project is in the form of a grant, the Company will have no other
debt service on this project. Operation and maintenance costs are expected to decrease with
the new diversion structure, and can be accommodated by the Company's existing budget.

Credit worthiness: PDDC has no existing debt. Table 4 shows the Financial Ratios for the
PDDC and indicates average to strong ability to repay with the project in place,

Table 4. Financial Ratios

Financial Ratio Without the project With the project
Operating Ratio (revenue/expense) 108% (average) 109% (average)
Debit Service Coverage Ratio No debt (strong) 129% (strong)
(revenues-expenses)/debt service
Cash Reserves to Current Expense 79% (average) 53% (average)
Annual Cost per acre-foot $2.93 (strong) $4.39 (strong)

Alternative financing considerations: The Company actively sought alternative financing,
They were able to obtain a grant to cover project planning and design through the NRCS
($4,620), but were not able to obtain cost share for construction through that agency, The
PDDC also requested a loan from their bank (First National Bank of Longmont), but were turned
down because the bank does not provide long-term fixed rate financing, and because of the lack
of marketable collateral. The bank letter of denial is included in Appendix G,

Collateral: As security for the CWCB loan, the PDDC can pledge assessment income, the
project structures, and a certificate of deposit equivalent to one annual payment.

Economic Analysis
If the project is not completed and the diversion fails during the irrigation season, the entire
annual production of lands in the 1 ,600-acre service area could be lost. The average net yield
per acre with water is estimated at $60, compared to a net yield of $25 as dry land. This results
in a one-time loss of $35/acre x 1,600 acres = $56,000, This loss would continue each year until
the diversion was repaired or replaced (an additional cost of $46,620.) A major benefit of the
project is avoiding the economic crop loss associated with a sudden failure of the diversion.

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Plumb and Dailey Ditch Company
Diversion Structure Feasibility Study
May 2000

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