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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 />share assessment increases as needed to cover payment over the life of the existing and proposed <br />loans. <br /> <br />Co/latera/- As security for the loan, LAWMA will pledge assessment revenues, including <br />memb~rship dues and assessments on shares of LAWMA stock, as well as a portion of the <br />remaining acquired ~ of Keesee water rights. rhe pledge shall be backed by a rate covenant. The <br />amount of water rights to be held by CWCS for collateral will be of a value equal to or greater than <br />the loan amount. This is in compliance with CWCS Financial Policy #5 (Collateral). <br /> <br />Recommendation (Board Approved Staff Recommendation on January 22, 2008) <br /> <br />Staff recommends a CWCS loan, not to exceed $2,494,700 ($2,470,000 for water rights purchase and <br />$24,700 for the 1% loan service fee) to the Lower Arkansas Water Management Association, from the <br />CWCS Construction Fund, to purchase the remaining ~ of the Keesee water rights for use as a <br />replacement water source to offset depletions from well pumping. The recommended term of the loan <br />is 30 years with a recommended blended lending rate of 2.30% per annum. Security for the loan shall <br />be in compliance with CWCS Financial Policy #5. <br /> <br />Staff further recommends that final approval of the loan be conditional upon all other standard <br />contracting provisions of the CWCS. In addition, the following Supplemental Loan Contract Conditions <br />shall apply: <br /> <br />1) If any water rights purchased with CWCS loan funds is sold in part (or whole) the proceeds <br />generated from that sale in excess of the expenses of that sale shall be applied to the remaining <br />balance of the CWCS loan within 6 months of the date of sale. Annual payments shall remain <br />unchanged unless the loan contract is amended as described in the contract documents. <br /> <br />e-mail copy: William J. Grasmick, President, and Donald F. Higbee, Secretary/Manager, LAWMA <br />Richard Mehren, Moses, Wittemyer, Harrison and Woodruff, P .C. <br />Vaughn McWilliams, CWCS <br />Amy Stengel, AGO <br /> <br />Attachment <br /> <br />6 <br />