23a

• Board Meeting Date: 9/17/2008
• Description: CF Section - New Project Loans - Ogilvy Augmentation Company - Well Augmentation Project
• Board Meetings - Doc Type: Memo

Ogilvy Augmentation Company Agenda Item 23a
September 9, 2008
Page 6 of 7
Creditworthiness : The Augmentation Company’s curren t assessment is $4000/well. Rates will
st
need to be increased to $7,876/well for the 1 three years of the loan to cover the CWCB loan
payments, debt reserve funding, and GIC assessments. After the first three y ears, the cost to cover
the CWCB debt service will be $2,841/well.
The Augmentation Company has a bridge loan fo r $55,000 that it used to purchase one share of
GIC. Proceeds from the CWCB loan will used to pay the bridge financing in full.
Table 4 shows the Financial Ratios for the Augmentation Company’s revenues.
Table 4
Financial Ratios
Future
Past 3 Years w/ Project after
Financial Ratio
3 years
100% 100%
Operating Ratio (revenues/expenses)
(Average) (Strong)
weak: <100% - average: 100% - 120% - strong: >120%
$24/24K $74/74K
Debt Service Coverage Ratio
100%
(revenues-expenses)/debt service
(N/A) (Average)
weak: <100% - average: 100% - 120% - strong: >120% $74-26/48K
66% 13%
Cash Reserves to Current Expenses
(Average) (Weak)
weak: <50% - average: 50% - 100% - strong: >100%
$16/24K $16/122K
$400 $2,035
Annual Operating Cost per Acre-Foot
*
(Weak) (Weak)
weak: >$20 - average: $10 - $20 - strong: <$10
$24K/60 $122K/60
*This ratio is usually used for agricultural financia l analysis and may not ap ply for augmentation purposes
here.
Collateral – As security for the loan, the Augmenta tion Company will pledge assessment revenues
backed by a rate covenant; the 6.0 shares of GIC water rights purch ased through this loan; and the
Project itself including: the rech arge facility, the new storage re servoir, and the measurement and
flow devices. This is in compliance with CWCB Financial Policy #5 (Collateral).
Staff Recommendation
Staff recommends the Board approve a loan not to exceed $1,010,808 ($1,000,800 for project costs
and $10,008 for the 1% Loan Service Fee) to the Ogilvy Augmentation Company for the Well
Augmentation Project from the Severance Tax Tr ust Fund Perpetual Base Account. The terms of
the loan shall be a 30-year loan at 2.5% per annum. Security for the loan shall be in compliance
with CWCB Financial Policy #5 (Collateral).
Staff further recommends addi tional contract provisions: