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<br />LAWMA - Water Rights Purchase
<br />
<br />Agenda Item 11 c
<br />
<br />January 22-23,2008 (UPDATED January 28,2008)
<br />
<br />LAWMA has two main sources of revenue, membership dues (approx. $178,760/yr.) and
<br />assessments on shares of LAWMA stock (approx. $551,432), for a total annual income of $730,192.
<br />LAWMA can increase its annual revenue to cover additional costs, by increasing its membership
<br />dues, and/or by increasing its assessments on shares of LAWMA stock.
<br />
<br />Table 4 shows LAWMA's projected income and expenses over the CWCS loan repayment period,
<br />LAWMA income is based on an annual assessment of $27.30 per share, which is carried out through
<br />2044 on Table 4.
<br />
<br />Table 4, LAWMA's Projected Income, Annual Expenses and CWCB Loan Service
<br />
<br />Year 2008 2009 2010- 2015- 2019- 2035- 2038-
<br /> 2014 2018 2034 2037 2044
<br />LAWMA Income $730,192 730,192 $730,192 $730,192 $730,192 $730,192 $730,192
<br />($27 .30/share)
<br />Expenses: Operating,
<br />Legal, and Engineering $190,000 $190,000 $190,000 $190,000 $190,000 $190,000 $190,000
<br />LAWMA Loan Payments $384,113 $500,148 $490,994 $513,091 $513,091 $404,516 $116,035
<br />LAWMA Total Expenses $574,113 690,148 $680,994 $703,091 $703,091 $594,516 $306,035
<br />LAWMACash Flow $156,079 $40,044 $49,198 $27,101 $27,101 $135,676 $424,157
<br />Surplus
<br />LAWMA 10% Reserve $17,577 $22,460 $22,460 $11,603 $0 $0 $0
<br />Payment on Loans
<br />LAWMA Cash Flow
<br />Surplus Less 10% $138,502 $17,584 $26,738 $15,498 $27,101 $135,676 $424,157
<br />Reserve Payment
<br />Required Share
<br />Assessment (Exist. = $20.44 $26.43 $25.98 $26.50 $25.96 $20.58 $6.30
<br />$27.30)
<br />
<br />The cost to a LAWMA member for an acre-foot of firm yield replacement water for the remaining ~
<br />of the Keesee water rights would be approximately $72.52. Given that LAWMA paid $67.86 per
<br />acre-foot of firm yield replacement water in 2002, the figure of $72.52 per acre-foot of firm yield
<br />replacement water for the remaining ~ of the Keesee water rights is reasonable. The appraised
<br />value of the water rights and long term benefit to LAWMA's water portfolio and also makes it a good
<br />investment for LAWMA.
<br />
<br />Election - LAWMA obtained shareholder approval of the remaining ~ Keesee water rights purchase
<br />and financial plan at its annual meeting held on December 13,2007. At the annual meeting, 13,364 of
<br />the 19,912 votes (approximately 67%) entitled to cast a vote on the proposed purchase and finance
<br />plan were present in person or in proxy. 13,210 out of the 13,364 voted in favor of the proposed water
<br />rights purchase and financing plan, leaving only 61 votes against. Also included at the meeting was
<br />the approval of increasing the share assessment from $22.30 to $27.30 and the approval of future
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