Amador County – The Amador Water Agency board of directors last week asked its general manager to speak with Amador County about terms of a $900,000 Water Development Fund loan. The board also directed Finance Manager Mike Lee to get more detail on an outside loan, after Lee gave general bank details.
Lee said the payment due date is “three short months away.” He gave rough numbers from three banks. Bank of Amador had a 6-7 percent interest loan at a maximum of 10 years, Lee said, meaning “an annual payment of $125,000,” of which Central Amador Water Project retail system would be responsible for 75 percent, or $93,000.
UMPQUA Bank showed a 4-6 percent five-year loan with “an annual payment of $207,000,” and CAWP Retail responsible for $155,000 annually.
Wells Fargo Bank showed 6-7 percent, five years max, and an annual payment of $216,000, with CAWP Retail paying $162,000 annually. Lee said these were the typical numbers for unsecured loans, and “Bank of Amador said it may be able to be a little bit more flexible.”
Lee said the agency very likely would qualify for a loan, but it would need to go through a full financial review, which could change the numbers.
Vice President Debbie Dunn said she was “concerned about what we told the county” to get the $900,000 loan.
Lee said the loan was to fund the project cost to date – the “sunk costs” – of the Gravity Supply Line in CAWP Retail system. He said he told supervisors that when AWA received a federal grant and loan for the GSL, it would repay the county. Lee said it was the goal of the agency to have the USDA loan in hand before the December 31st due date of the county loan.
A Proposition 218 protest stopped a rate increase in CAWP, and put a delay on the USDA loan’s financing plan, due to a cash shortage for the agency.
Director Don Cooper said he would like to ask Supervisors for the additional $319,000 it would take to meet the full USDA requirements for grant and loan funding of the GSL. He said it would take $79,000 to get to the bidding stage, and an estimated $254,000 “to get back to the GSL starting line.”
Dunn said “this is not about the GSL, it’s about the loan.” Director Gary Thomas disagreed, saying “they are intertwined.”
Dunn said her vote for the six-month loan was based on agency finances, whether or not AWA received the USDA funding of $12 million.
Moore said as a rule with grants, the “sunk costs are paid first.” He said it was the agency’s debt and responsibility. Moore said he agreed with Thomas and Cooper that they should speak with the county.
Story by Jim Reece This email address is being protected from spambots. You need JavaScript enabled to view it.
