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<br />LAWMA - Water Rights Purchase <br /> <br />Agenda 11em 20b <br /> <br />July 28-29, 2003 <br /> <br />. <br /> <br />Financial Analvsis <br /> <br />LAWMA understands that CWCS Loan Policy No. 11 provides that the CWCS may generally lend up <br />to 90% of the costs of a water rights acquisition project. In order to purchase one-half of the Keesee <br />water rights LAWMA must borrow $ 2,250,000, the full purchase price. As previously discussed, <br />LAWMA's cash-flow situation is currently extremely tight as a direct result of the costs it had to cover <br />in participating in the Kansas v. Colorado trial, and because LAWMA plans to close-out Contract No. <br />C153768 as part of this transaction and pay the approximately $234,473 of accrued interest to the <br />CWCS. LAWMA has made a rental payment on the Keesee water rights of $150,000 that is <br />applicable against the overall purchase price. If LAWMA is able to borrow $ 2,250,000, they will <br />have sufficient cash to cover their share of the Keesee acquisition costs, and pay the accrued <br />interest on the current CWCS loan. <br /> <br />The total estimated cost of the Keesee Water Rights is $2,315,000. LAWMA qualifies for a blended <br />interest rate of 2.5%. Staff recommends that the Soard consider a maximum loan amount of <br />$2,250,000 (97% of estimated project cost) for 30 years at an interest rate of 2.50%. Table 1 is a <br />summary of the financial aspects of the project. A CWCS Loan of $2,211>>,000 would have an annual <br />payment of $118,250 (including the 10% reserve requirement) at the loan terms of 2.50% for 30 <br />years. <br /> <br />Table 1. Keesee Loan Financial Summary <br /> <br />. <br /> <br />Proiect Cost $2,315,000 <br />Number of Shareholders 213 <br />Number of Shares of Stock 18,495 <br />CWCS Loan Amount 130 vears) . $2,2EO,000 <br />CWCS Loan Pavment lincludes 10% re.serve) - Seqin 2004 $118,250 <br />Current Assessment oer share (2002) $11.30 <br />New Assessments per share (see Table 3) $11.75-$20.35 <br />Annual Loan Cost oer ac-foot (firm yield consumotive use 1887 ac-ft.) $62.66 <br /> <br />Table 2 shows the required annual payments on the existing loans as well as the proposed Keesee <br />water rights loan, as follows: <br /> <br />Table 2. CWCS Loan Summary" <br /> <br />. <br /> <br />Loan No. 2004 - 2007 2008 - 2010- 2014 - 2034 - 2037 - <br /> 2006 2009 2013 2033 2036 2043 <br />C153715 $122,000 $122,000 $199,184 $199,184 $199,184 $199,184 <br />C153678 $ 11,052 <br />C153756 $ 9,154 $ 9,154 $ 9,154 <br />C153768 $ 67,200 $ 67,200 $ 67,200 $ 67,200 $ 89,297 $ 89,297 $ 89,297 <br />Keesee $107,500 $107,500 $107,500 $107,500 $107,500 <br />Loan <br />Totals $316,906 $305,854 $383,038 $373,884 $395,981 $288,481 $ 89,297 <br /> <br />. Does not include 10% reserve requirement. <br />Page 5 of 8 <br />