<br />LAWMA - Water Rights Purchase
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<br />Agenda 11em 20b
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<br />July 28-29, 2003
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<br />Financial Analvsis
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<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.
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<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.
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<br />Table 1. Keesee Loan Financial Summary
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<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
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<br />Table 2 shows the required annual payments on the existing loans as well as the proposed Keesee
<br />water rights loan, as follows:
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<br />Table 2. CWCS Loan Summary"
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<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
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<br />. Does not include 10% reserve requirement.
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