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. . Potential Financing Opportunities Apri 1 23, 1986 Page two One significant recent development in financing smaller projects is that the CWCB authorizing legislation under 58 27 was amended to permit the CWCB to fund up to 100 percent of a construction project at the discretion of the Board, The interest rate on CWCB construction loans will be at the statutory rate of five percent. This will greatly enhance their ability to finance pro- jects - provided that the legislature agrees to appropriating funds for water development. A key issue will be the question of the State providing large subsidies for municipal raw water storage development. Cost sharing for studies is generally between 0 to 50 percent of the cost provided by the applicant, at the discretion of the CWC8 Board. The Board has not required any cost sharing for some agricultural water supply developments. The project with the best short-term prospect for the Authority is Auro- ra's Senac Dam and pipeline system. I have had several discussions with Auro- ra and highlighted to them how we could aid their financing activities as fo 110ws: . Authority does almost all of the paper work for bonding since we act as the financing entity. . The indebtedness would appear on their balance sheet as a long-term loan instead of long-term bonds. This arrangement would have limited impact on Aurora's bonding capacity. . The Authority is not a competitor with municipalities for water devel- opment. . Authority would have administrative control of the financial aspects, but the Authority would not own the project. The bonds would be secured by an appropri ate contract. . The State name on the bonds may result in lower effective interest rate (5-20 basis points). . Authority could pledge funds for a debt reserve fund which typically amounts to principal and interest for one year (10-15 percent ~ of the tota 1 bond float). In brief, the Senac Water Storage Facility is described in the attached sheet. The dam construction cost is about $30 million with auxiliary pipe- 1 ines and pumps adding about $15 mi 11 ion for a tot a 1 of $45 mi 11 ion. The project is about a year from construction. Aurora has about $50 million in unrestricted cash available for the project, but they have numerous other needs where they can spend this money.