BOARD00062 ‎(2)‎

• Board Meeting Date: 11/13/2006
• Description: CF Section - Construction Fund and Severance Tax Trust Fund Perpetual Base Account New Loans - Lazy O Ranch Homeowners Assoc - Secondary Water System
• Board Meetings - Doc Type: Memo

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Cash Reserves to Current Expense
weak: less than 50% 41% 62%
average: 50% - 100% (weak) (aver.)
strong: greater than 100%
($93,566/225,600) ($ 142,028/$229,714)
Annual Operating Cost per Acre-Ft. (13 AF)
N/A $1,321*
weak: greater than $20 (weak)
average: $10 - $20 ($]7,181/13)
strong: less than $10

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* The $1,321 annual operating cost per acre-foot is equivalent to a monthly non-potable outside
irrigation cost of $68 per household, which is very reasonable rate when compared with other water
providers.

As security for the loan, the LORHOA will pledge assessment revenues backed by an assessment
covenant and the project itself The HOA's Articles of Incorporation and Bylaws gives the Board
of Directors the authority to put a lien on a property for any unpaid assessments, and to additionally
force the sale of that property to secure the unpaid assessments within a reasonable time frame. The
security is in compliance with CWCB Loan Policy No.5.

ST AFF RECOMMENDATIONS:
Staff recommends that the Board approve a loan from the Construction Fund in the amount up to
$152,258 ($150,750 for project costs and $1,508 for the 1 % loan origination fee, in accordance with
CWCB Financial Policy No. 16) to the Lazy 0 Ranch Homeowners Association. The loan is for up
to 90% of the cost to construct the secondary water supply system. The recommended loan terms .
are 30-years at 4.25%. Security for the loan will be a pledge of assessment revenues backed by
assessment covenant and the project itself in accordance with Policy No.5.

Staff further recommends that final approval of the loan be conditioned upon all standard-
contracting provisions of the CWCR

c: Tony Cinco, Manager - Lazy 0 Ranch Home Owners Association
Vaughn McWilliams, CWCB
Amy Stengel, AGO

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