C150159 Approval Letter - Laserfiche WebLink

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Orphans Wells of Wiggins LLC November 19-21, 2003 Agenda Item 8f (Updated November 21, 2003) Credit worthiness: The OWW is a new company and has no debt or history of income and expenses. The Company has collected initial capital of $80,000 from its shareholders. These funds, as well as future assessments and CWCS loan proceeds will be used to construct the project and pay O&M costs. (Note: Shareholders of the OWW previously were members of GASP and paid a total of $100,000 for augmentation of their wells. These GASP dues can now be used to pay assessments of the OWW.) Table 2 shows the Financial Ratios for the OWW assuming the project is built, and indicates 2 ratios in the average and 2 ratios in the weak categories with the $1,037,700 CWCS loan in place. Table 2, Financial Ratios Financial Ratio Without With the project The project Operating Ratio (revenue/expense) N/A 108% weak: less than 100% (average) average: 100% - 120% strono: oreater than 120% Debt Service Coverage Ratio N/A 131% (revenues-expenses )/debt service (average) weak: less than 100% average: 100% - 125% strono: oreaterthan 125% Cash Reserves to Current Expense N/A 31% weak: less than 50% (weak) average: 50% - 100% strong: greater than 100% Annual Cost per Ac-Ft (6,000 ac-ft diverted) N/A $21.59 weak: greater than $20 (weak) average: $10 - $20 strong: less than $10 As security for the loan the OWW will pledge assessment revenues backed by assessment covenant and the project itself. This security is in compliance with CWCS Loan Policy #5 (Collateral). Recommendation Staff recommends a CWCS Small Project loan from the Construction fund in amount up to $1,048,077 ($1,037,700 for project costs and $10,377 for the 1% Loan Service Fee, in accordance with CWCS Loan Policy #16) to the Orphans Wells of Wiggins LLC. The loan is for up to 90% of the cost to construct a well augmentation and groundwater recharge project. The recommended loan terms are 30 years at 2.5% (2.58% Annual Percentage Rate.) Security for the loan will be a pledge of assessment revenues backed by assessment covenant and other Company property adequate to assure repayment of the loan, in accordance with CWCS Loan Policy #5. Staff further recommends that final approval of the loan be conditioned upon standard contracting provisions of the CWCS. Action taken bv the CWCS November 21. 2003 The CWCS approved the Staff Recommendation. cc: Chris Metherd, Orphan Wells of Wiggins, LLC Brent Nation, P.E. Linda Bassi, AGO Attachment C:Proj-New\OWW 1103 memo; L:\boardmem\Nov03\8f - Orphan Wells of Wiggins LLC 4