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<br />Willow Heights ln1gation Company. Inc. <br />May 19-20. 2003 <br /> <br />Agenda Item 18d <br /> <br />Table 1. Financial Summary <br /> <br />Proiect Cost $115,000 <br />Number of Shareholders 98 <br />Number of Shares of Stock 104 <br />CWCB Loan Amount (30 vears) $103,500 <br />CWCB Loan Pavment (includes 10% reserve) - BeQin 2004 $6,386 <br />Current Assessment oer share (2002) $65 <br />New Assessments oer share (Adooted 2003) $110 <br />Annual Loan Cost oer acre-foot (aver. annual deliverv: 257 ac-ft.) $24.85 <br /> <br />Creditworthiness: The WHIC has no existing long-term debt. <br /> <br />The cwes loan will be repaid from increases in the base assessment rate from $65 to $110 per <br />share. This assessment was approved at the WHIC annual meeting. with authorization given to <br />raise assessments to $120 if necessary to implement the project. <br /> <br />Table 2 shows the Financial Ratios for the WHIC and indicates, strong to average ability to repay <br />the $103,500 loan, with the new assessment levels. <br /> <br />Table 2. Financial Ratios <br /> <br />Financial Ratio Without With project <br /> the project Future Years <br /> ( Aver, 2001-02) 2004. <br />Operating Ratio (revenue/expense) <br />weak;: less than 100% 154% 260% <br />average: 100% -120% (strong) (strong) <br />stronn-: nreater than 120% <br />Debt Service Coverage Ratio <br />(revenues-expenses)/debt service N/A 110% <br />weak: less than 100% (aver.) <br />average: 100% - 125% <br />strono: areater than 125% <br />Cash Reserves to Current Expense <br />weak: less than 50% 54% 103% <br />average: 50% - 100% (aver.) (strong) <br />stro.....: nreaterthan 100% <br />Annual Operating Cost per Acre-Ft. (257 AF) <br />weak: greater than $20 $17 $42 <br />average: $10 - $20 ( aver.) (weak) <br />strona-: less than $10 <br /> <br />As security for the loan the WHIC will pledge assessment revenues backed by an assessment rate <br />covenant and the project itself, including water rights and property owned. This security is in <br />compliance with CWCB Loan Policy #5 (COllateral). <br /> <br />Recommendation <br /> <br />Staff recommends a CWCS Small Project Loan, not to exceed 5103,500, to the Willow Heights <br />Irrigation Company, Inc., from the Construction Fund, for rehabilitation of their existing dual <br />(secondary) irrigation water system. The recommended tenn of the loan is 30 years and the <br /> <br />Page 4 of6 <br />