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<br />Ogilvy Augmentation Company <br />Updated September 19, 2008 <br />Page 6 of? <br /> <br />Agenda Item 23a <br /> <br />Creditworthiness: The Augmentation Company's current assessment is $4000/well. Rates will <br />need to be increased to $7,876/well for the 1 st three years of the loan to cover the CWCB loan <br />payments, debt reserve funding, and GIC assessments. After the first three years, the cost to cover <br />the CWCB debt service will be $2,8411well. <br /> <br />The Augmentation Company has a bridge loan for $55,000 that it used to purchase one share of <br />GIC. Proceeds from the CWCB loan will used to pay the bridge financing in full. <br /> <br />Table 4 shows the Financial Ratios for the Augmentation Company's revenues. <br /> <br /> Future <br />Financial Ratio Past 3 Years w/ Project after <br /> 3 years <br />Operating Ratio (revenues/expenses) 100% 100% <br />I weak: <100%' -I average: 100% - 120% I-I strong: >1200/~ (Average) (Strong) <br />$24/24K $ 74174K <br />Debt Service Coverage Ratio 100% <br />(revenues-expenses)/debt service (N/A) (Average) <br />I weak: <100% 1- I average: 100% - 120% 1- I strong: >1200/1 $74-26/48K <br />Cash Reserves to Current Expenses 66% 13% <br />I weak: <50% 1- I average: 50% - 100% I-I strong: > 1000/~ (Average) (Weak) <br />$16/24K $16/122K <br />Annual Operating Cost per Acre-Foot * $400 $2,035 <br />Iweak: >$20 I-I average: $10 - $20 I-I strong: <$1~ (Weak) (Weak) <br />$24K160 $122K160 <br /> <br />Table 4 <br />Financial Ratios <br /> <br />*This ratio is usually used for agricultural financial analysis and may not apply for augmentation purposes <br />here. <br /> <br />Collateral- As security for the loan, the Augmentation Company will pledge assessment revenues <br />backed by a rate covenant; the 6.0 shares of GIC water rights purchased through this loan; and the <br />Project itself including: the recharge facility, the new storage reservoir, and the measurement and <br />flow devices. This is in compliance with CWCB Financial Policy #5 (Collateral). <br /> <br />Staff Recommendation (Board approved Staff recommendation on September 17, 2008) <br /> <br />Staff recommends the Board approve a loan not to exceed $1,010,808 ($1,000,800 for project costs <br />and $10,008 for the 1 % Loan Service Fee) to the Ogilvy Augmentation Company for the Well <br />Augmentation Project from the Severance Tax Trust Fund Perpetual Base Account. The terms of <br />the loan shall be a 30-year loan at 2.5% per annum. Security for the loan shall be in compliance <br />with CWCB Financial Policy #5 (Collateral). <br /> <br />Staff further recommends additional contract provisions: <br />