BOARD01639

• Board Meeting Date: 7/28/2003
• Description: CF Section - Ogilvy Irrigation and Land Company
• Board Meetings - Doc Type: Memo

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Ogllvy Irrigation and Land Co,
July 28-29, 2003

Agenda Item 21c

Water delivered by the OILC is used for agricultural purposes, and the Company has requested
a 20-year loan. The CWCS agricultural rate for a 20-year loan is 2.25%.

Table 1 is a summary of the financial aspects of the project. Annual assessments will increase
from $100 per share, up to $140 per share with a CWCS loan payment of $24,117 (including
the 10% reserve requirement.) This $40 assessment increase represents $1.51 per acre-foot,
based on average annual diversions of 16,000 acre-feet.

Table 1. Financial Summary

Proiect Cost $388,095
Total CWCS Loans (90% of Proiect Cost) $350,000
CWCS Loan PavmentAmount, includina10% loan reserve $24,117
Number of Shareholders 34
Number of Shares of Stock 360
Current Assessment oer Share $100
Future Assessment oer Share $140
Annual Loan Cost per acre-foot stored $21.92
(Averaae reservoir storaae: 1,100 acre-feet)
Annual Loan Cost per acre-foot diverted $1.51
!Averaae annual diversions: 16,000 acre-feet)

Credit worthiness: OILC has no debt. Table 2 shows the Financial Ratios and indicates, with
the exception af cash reserves, average to strong ability to repay with the project in place.

Table 2. Financial Ratios

Financial Ratio Without With
the oroiect The oroiect
Operating Ratio (revenue/expense) 127% 113%
weak: less than 100% (strong) (average)
average: 100% - 120%
stron';: nreater than 120%
Debt Service Coverage Ratio No debt 127%
(revenues-expenses)/debt service (strong) (strong)
weak: less than 100%
average: 100% - 125%
stronn': nreater than 125%
Cash Reserves to Current Expense 108% 37%
weak: less than 50% (strong) (weak)
average: 50% - 100%
stronn: nreater than 100%
Annual Cost per Ac-Ft diverted (16,000 ac-ft) $3.68 $4.81
weak: greater than $20 (strong) (strong)
average: $10 - $20
stronn': less than $10

As security for the loan the OILC will pledge assessment revenues backed by assessment
covenant and the project itself (Seeley Lake Reservoir.) This security is in compliance with
CWCS Loan Policy #5 (Collateral).

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