C153718 Contract - Laserfiche WebLink

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month. This would JIIlease the estimated average biJlllf $22.83 per month to over $33.00, well over the estimated monthl~ate municipal average rate of $20.87. It is likely that most, if not all residential customers of the district are not users of a centralized sewer system, and consequently may not have that monthly expense; the estimated monthly statewide municipal average sewer user rate is $11.85. . The operating ratio is "average." This means that operating expenses are almost equal to operating revenues suggesting that rates may need to be increased; the role of non-operating revenues must be examined. .4. '. ....~ ,- . Other Financial Indicators; Since 1993 the district has paid $319,200 out of existing reserves towards the construction of the first phase of this project. Reserves, defined as current assets minus current liabilities, are strong. DESCRIPTION OF LOAN: This would be a 30 year loan of $4,260,000 at an interest rate of 4.0\. The annual debt service on this amount totals $246,350. This loan would cover 75% of the project costs. RECOMMENDATION: The district has no financial indicators with a "weak" rating. Nevertheless, the effect of the proposed loan is to weaken several "strong" indicators and move them into "average" categories. The ability to increase user fees and any unrestricted reserves should be pledged as the district's security for the loan. The reliability of property tax as a revenue source and its role in funding an "enterprise" may need to be examined, especially in terms of the TABOR amendment. Assuming the resolution of these matters, we recommend the Colorado Water Conservation Board favorably consider a 30 year loan of $4,260,000 at 4.0% to the Morgan County Quality Water District. Prepared By: Susanna Lienhard and Barrv Cress Date: Januarv 10, 1995 . .