Board Planning SessionKennesaw, GA
March 21, 2011
Municipal Gas Authority of Georgia
Board Planning SessionMarch 21, 2011 - 2 -
Agenda
2010 Financial Results G&A True-up
Swing Supply Charge
Capacity Management Credits
Storage Programs
Long-Term Supply Projects
2010 Corporate Goal and Incentive Compensation Plan
Proposed 2011 Corporate Goal
Municipal Gas Authority of Georgia
Board Planning SessionMarch 21, 2011 - 3 -
Agenda
Conasauga Shale Supply in Georgia
Portfolio III Investments in Member Debt
Draft 2016 Strategic Plan
2010 Audit Results* – Meeting with Ernst & Young (Tuesday morning before MGAG Board Meeting)
* Discussion Materials to be Provided at the Meeting
Municipal Gas Authority of Georgia
Board Planning SessionMarch 21, 2011 - 4 -
2010 Financial Results
Actual net G&A represents a favorable variance from budget of $52,000
The overall favorable variance is comprised of the following: Unfavorable variance of approximately $139,000 on G&A
expenses Due primarily to office expansion costs incurred to support new
PGP services
Favorable variance of approximately $47,000 in Revenue Credits due to
Higher than expected revenues from interest income and Main Street administrative fees
Offset somewhat by reserved amounts of almost $600,000 for timing differences and risk related to Pine Needle, MGC and FUEL
Favorable variance of approximately $145,000 in Member billings due to colder than normal weather
Overall favorable variance has been recorded as additional Net Assets
Municipal Gas Authority of Georgia
Board Planning SessionMarch 21, 2011 - 5 -
2010 G&A True-Up
BUDGET ACTUAL VARIANCE2010 2010 (UNFAVORABLE)
FAVORABLE
SALARIES & BENEFITS 5,771,230 5,768,877 2,353OFFICE OPERATIONS (BUILDING, TELECOM, SUPPLIES) 507,980 628,884 (120,904)TECHNOLOGY EXPENSES 399,860 434,160 (34,300)PROFESSIONAL SERVICES (LEGAL,CONSULTING,AUDIT) 616,146 610,936 5,210TRAVEL AND MEETINGS 375,650 353,854 21,796OTHER (BOARD MEMBERS, MISC.) 114,200 127,846 (13,646) TOTAL G&A EXPENSES 7,785,066 7,924,557 (139,491)
PGP SERVICE FEES (1,185,000) (1,054,274) (130,726)MAINSTREET FEES A, B, & C (429,655) (515,158) 85,503LONG-TERM SUPPLY ADMIN FEES (410,000) (386,390) (23,610)DEFERRED MAIN STREET REVENUES (375,000) (375,000) 0INTEREST INCOME (145,000) (343,712) 198,712PATRIOTS ENERGY GROUP (306,000) (332,970) 26,970FUEL, INC. FEES (386,718) (286,718) (100,000)RICHMOND ADMIN FEES (277,498) (277,336) (162)PINE NEEDLE REVENUE (110,000) (146,105) 36,105RENTAL INCOME (153,036) (133,830) (19,206)MID-GEORGIA COGEN (139,000) (112,514) (26,486)SUBSCRIBED REGULATORY FEES (50,000) (50,000) 0SEAGD FEES (48,000) (48,000) 0 TOTAL REVENUE CREDITS: (4,014,907) (4,062,007) 47,100
NET G&A EXPENSES 3,770,159 3,862,550 (92,391)TOTAL G&A REVENUE (3,770,159) (3,915,159) 145,000
EXCESS REVENUE - (52,609) 52,609
Municipal Gas Authority of Georgia
Board Planning SessionMarch 21, 2011 - 6 -
Background: Southern Storage (CSS) assets were acquired and
financed in 1994 with Storage Revenue Bonds
All debt and deferred balances were fully paid in 2009
Initial returns to Members began in 2009
Transco ESS storage assets were transitioned to active price management in early 2009
2010 Financial Results
Storage Programs
Municipal Gas Authority of Georgia
Board Planning SessionMarch 21, 2011 - 7 -
2010 Financial Results
Current Operations: Storage assets are critical to managing load swings during
peak periods Spreads between summer and winter gas prices are used to
pay operating and working capital costs Remaining margins are available for Member returns
Summary of Results Annual net operating income has been strong and reliable as
spread trades have been an effective hedging strategy for several years
Current storage year (2011-12) is partially hedged (40%) Next storage year (2012-13) is 20% hedged Future years are not yet hedged
Propose Member returns of $1.73 million (CSS) and $138,000 (ESS)
Storage Programs
Municipal Gas Authority of Georgia
Board Planning SessionMarch 21, 2011 - 8 -
2010 Financial Results
Total $/Dt** Total $/Dt*** Total $/Dt*** Total $/Dt*** Total $/Dt***
Operating Margin 3,757,999$ 1.25$ 3,025,000$ 0.96$ 1,700,000 $ 0.54$ 1,350,000 $ 0.43$ 1,150,000 $ 0.36$
Non-Operating Expense* 220,789$ 0.07$ 297,000$ 0.09$ 350,000 $ 0.11$ 350,000 $ 0.11$ 350,000 $ 0.11$
Net Income 3,537,210$ 1.18$ 2,728,000$ 0.87$ 1,350,000$ 0.43$ 1,000,000$ 0.32$ 800,000$ 0.25$
Member Returns 1,650,000$ 0.55$ 1,737,000$ 0.55$ 1,737,000$ 0.55$ 1,737,000$ 0.55$ 1,737,000$ 0.55$
Project Balance 1,887,210$ 2,878,210$ 2,491,210$ 1,754,210$ 817,210$
Storage Withdrawals (Dt) 2,900,000 3,000,000 3,000,000 3,000,000 3,000,000
% Hedged 100% 40% 20% 0%
* Primarily internal interest expense charged project on working capital
** $/Dt based on maximum storage quantities of 3,013,804 Dt*** Addition of Dublin increased maximum storage quantities to 3,158,371 Dt starting 2010-11
2013-14 Projected
CSS Storage
2009-10 Actual 2010-11 Estimate 2011-12 Projected 2012-13 Projected
Municipal Gas Authority of Georgia
Board Planning SessionMarch 21, 2011 - 9 -
2010 Financial Results
Total $/Dt** Total $/Dt** Total $/Dt** Total $/Dt** Total $/Dt**
Operating Margin 412,000$ 1.65$ 205,000 $ 0.82$ 125,000 $ 0.50$ 86,000$ 0.34$ 85,000 $ 0.34$
Non-Operating Expense* 35,000$ 0.14$ 20,000 $ 0.10$ 28,000 $ 0.11$ 28,000 $ 0.11$ 28,000 $ 0.11$
Net Income 377,000$ 1.51$ 185,000$ 0.72$ 97,000$ 0.39$ 58,000$ 0.23$ 57,000$ 0.23$
Member Returns 138,000$ 0.55$ 138,000$ 0.55$ 138,000$ 0.55$ 138,000$ 0.55$ 138,000$ 0.55$
Project Balance 239,000$ 286,000$ 245,000$ 165,000$ 84,000$
Storage Withdrawals (Dt) 240,000 240,000 240,000 240,000 240,000
% Hedged 100% 40% 0% 0%
* Primarily internal interest expense charged project on working capital** $/Dt based on maximum storage quantities of 250,442 Dt
2009-10 Actual 2010-11 Estimated 2011-12 Projected 2012-13 Projected 2013-14 Projected
ESS Storage
Municipal Gas Authority of Georgia
Board Planning SessionMarch 21, 2011 - 10 -
2010 Financial Results
Gas Reserves Gas Authority
Alabama and Kansas Coalbed Methane reserves PGP - Portfolios of producing reserves
Pool 1 – MGAG 46% share Pool 2 – MGAG 54% share Pool 3 – MGAG 70% share
Prepayment transactions TEAC and PEAK participation Main Street transactions – JPMorgan, Merrill (2), and RBC
Long-Term Supply Projects
Municipal Gas Authority of Georgia
Board Planning SessionMarch 21, 2011 - 11 -
2010 Financial Results
Reserve Diversity Mix of conventional and unconventional reserves Oil reserves are adding significant value
Geographic Diversity 16 states – Greatest Value in Texas / Oklahoma 5,500 + wells – Greatest number in Texas / Alabama
Solid Operating Partners Mix of large / small private and large public companies Generally using industry standard agreements
Operational exposure and risksHedged commodity prices for 5 – 6 yearsOn-going development opportunities
Long-Term Supply Projects – Gas Reserves
Municipal Gas Authority of Georgia
Board Planning SessionMarch 21, 2011 - 12 -
2010 Financial Results
Alabama CBM (Energen Operates) Production at 12,000 Mcfe/day Final year of 100 well drilling program (81 complete)
Kansas CBM (Dart Oil & Gas Operates) Production at 8,400 Mcfe/day Project economics have improved due to operating
efficiencies Dart is continuing to market their interest Small oil play may be developing
Long-Term Supply Projects – Gas Authority Reserves
Municipal Gas Authority of Georgia
Board Planning SessionMarch 21, 2011 - 13 -
2010 Financial Results – PGP Pool 1 Map
Cedar Cove
McNic
Cheyenne-Putnam/McNic II
Cymreac
Exploration
Jetta/Permian
HSA/Ward
FGL/Future
Potash Dome/Greka
Tiger/Exco
Field/Sundown
Saga
$268.9 Jan. 2006TX, AR, OK, NM, AL, MS, LA
Sundown
Locations
Saga MT, WY, CO, AL 308 Jan. 2008 $61.0
$329.9
2000
Transaction#
Wells Closed Price
Saga
Municipal Gas Authority of Georgia
Board Planning SessionMarch 21, 2011
2010 Financial Results
Pool 1 Continuing to transition administrative services
from largest operating partner (Sundown) to the Gas Authority
Net savings of $2 million per year
Better decision-making capabilities and visibility
Most planned development is focused on oil reserves in West Texas
Developed new database for managing operating decisions and additional accounting activity
Over $20 million in development expected for 2011
Fixed assessments, which began in January 2011, will be used to accelerate debt repayment - 14 -
Long-Term Supply Projects – Public Gas Partners
Municipal Gas Authority of Georgia
Board Planning SessionMarch 21, 2011 - 15 -
Transaction
ApacheDavis
Four CornersEdna HollowEast LibertyPine Hollow
Kerr McGeeOrionPetroNovaSagaTGP
Locations
TX, OK, LA
TXKS/OK
KSOKTXOKAL
MT, WY, ALTX, MS, NM
# Wells
170
5302082846
20040
Closed
June 2005
Dec. 2005Oct. 2005Nov. 2006Apr. 2007Nov. 2006Oct. 2007May 2007Jan. 2008
June 2005
Price
$ 67.0
7.51.83.97.1
20.03.33.0
19.05.7
$138.3
Apache TGP
Davis – OK/KS Orion
Davis – TX PetroNova
Kerr-McGee Saga
2010 Financial Results - Pool 2 Map
Municipal Gas Authority of Georgia
Board Planning SessionMarch 21, 2011
2010 Financial Results
Pool 2 Wide range of results among various projects /
operators
Potential opportunities could provide significant upside
Texas Gas Partners – S. TX wells– Considering partial sale of partnership interests to
capture value from high current oil prices
– Continuing drilling of oil related reserves
Orion - Oklahoma tight sands project– Shallow oil play is developing in the area
– Pool 2 has interests in 20,000 acres that may be productive
– Recent core analysis had encouraging results - 16 -
Long-Term Supply Projects – Public Gas Partners
Municipal Gas Authority of Georgia
Board Planning SessionMarch 21, 2011
2010 Financial Results
Pool 2 Challenges
Fixed assessments, which began in January 2011, will be used to accelerate debt repayment
Davis Oklahoma reserves- Prior operator sold out and transferred operations to the
new owner in late 2010 without proper authorization
- New owner has limited experience and financial resources
– PGP has filed suit against new owner to take over operations
Alabama CBM assets– 10-well pilot program to establish a new field has been
very disappointing and may need to be plugged and abandoned
- 17 -
Long-Term Supply Projects – Public Gas Partners
Municipal Gas Authority of Georgia
Board Planning SessionMarch 21, 2011 - 18 -
2010 Financial Results – PGP Pool 3
Louisiana
Oklahoma
Transaction Location
# PDP
WellsOrion-North Fork
OK
LA0
20
180
300
May 2008
Sept 2008
Closed
PurchasePrice Description
$ 7.0
$11.0
$18.0
Hunton Dev Program
CBM PDP + Dev Program
Total Possibl
eWells
CHC Energy
Municipal Gas Authority of Georgia
Board Planning SessionMarch 21, 2011
2010 Financial Results
Pool 3 Two existing projects
Early-stage Louisiana CBM project– 20-well pilot program has continued to have
operational issues
– No additional activity while we wait for adjacent operator to complete new wells and share results
Oklahoma Dolomite de-watering project – Drilled 8 wells with existing partners in 2009 – 2010
– Currently drilling 6 additional wells » Existing partners did not participate due to lack of
funding
» Seismic information on one section indicates an unexpected shallow oil-producing formation that could be significant
» New well has been authorized and will be drilled in May / June
- 19 -
Long-Term Supply Projects – Public Gas Partners
Municipal Gas Authority of Georgia
Board Planning SessionMarch 21, 2011 - 20 -
2010 Financial Results
Key Assumptions
All key project reserve reports are updated annually by nationally recognized engineering firms
NYMEX pricing for 6 years and then $6.50 flat for gas and $80 flat for oil
Alabama CBM pricing is based on $5.00 long-term gas prices for conservatism
Interest rates averaging 3 – 4 %, based on current debt components and continuing blend of fixed and floating rates
Long-Term Supply Projects – Expected Results
Municipal Gas Authority of Georgia
Board Planning SessionMarch 21, 2011 - 21 -
2010 Financial Results
Long-Term Supply Projects – Expected Results
Transaction Description Supplier / Operator
Member Volumes
(MMBtu/ d) Term ThroughCents
Under SpotPortfolio III Series A Energen CBM 12,000 2025 + $1.30
Portfolio III Series B DART CBM 8,500 2025 + ($0.20)
Portfolio III - PGP Pool 1 Sundown and Saga 10,000 2025 + ($0.60)
Portfolio III - PGP Pool 2 Apache, Davis, others 3,000 2025 + ($0.50)
Portfolio III - PGP Pool 3 Orion, CHC 1,000 2025 + TBD
Total Portfolio Projects 34,500
PEAK prepay BP Corporation 1,600 July-16 $0.25
TEAC prepay Goldman Sachs 8,400 July-26 $0.59
Main Street - 2006 A JP Morgan 13,000 January-22 $0.46
Main Street - 2006 B Merrill Lynch 13,000 January-22 $0.46
Main Street - 2007 A Merrill Lynch 5,500 August-28 $0.67
Main Street - 2010 A RBC 5,000 July-40 $0.20
Total Prepayment Projects 46,500
Total Long-Term Supply Projects 81,000
Municipal Gas Authority of Georgia
Board Planning SessionMarch 21, 2011 - 22 -
2010 Financial Results
Portfolio project obligations include Direct debt and liquidity at the Gas Authority, and Indirect debt owed by PGP
$307 million total debt, including proportionate share of PGP debt
Combination of long-term bonds, short-term notes and bank lines of credit
Combination of fixed and floating interest rates with approximately half in committed, fixed-rate obligations
Maintaining portion of debt in short-term, variable-rate structures is avoiding significant additional interest expense $100 million at 3% higher fixed-rate bonds would cost an
additional $3,000,000 in interest per year Short-term rates have averaged less than 3.5% over last 10
years
Long-Term Supply Projects – Debt Management
Municipal Gas Authority of Georgia
Board Planning SessionMarch 21, 2011 - 23 -
2010 Financial Results
Long-Term Supply Projects – Debt ManagementFebruary 2011(In $ millions) MGAG Total Current Fixed
Pool 1 Pool 2 Pool 3 rates VariableAvailable capacityLines of credit - unfunded Liquidity for ST Notes 25 33 17 75 0.50% V Liquidity for Ops & Capex 4 4 8 0.50% V PGP LOCs - liquidity 38 38 0.60%Total available 29 37 38 17 121
Short-term debt MGAG LOC - Wells Fargo 13 2 20 35 2.00% V MGAG LOC - JP 12 12 2.00% V PGP LOCs - Wells/JP/Scotia 37 37 2.00% V MGAG Short-Term tax-exempt notes 47 61 31 139 1.00% VTotal short-term debt 72 63 37 51 223
Long Term Debt:MGAG Taxable 10-yr bonds 44 9 36 89 5.30% FPGP Tax-Exempt Bonds 123 123 3.20% FTotal long-term debt 167 9 0 36 212
Total Debt - MGAG 116 72 0 87 275Total Debt - PGP 123 0 37 0 160Total Debt - MGAG and PGP 239 72 37 87 435
Long-term as % of total funded debt 70% 13% 0% 41% 49%Wtd avg interest rate 3.09% 1.82% 2.62% 3.11% 2.84%MGAG Proportionate Share 143 50 26 87 307
Public Gas Partners
Municipal Gas Authority of Georgia
Board Planning SessionMarch 21, 2011 - 24 -
2010 Financial Results
Analysis of Individual Projects Within LT SuppliesActual Proposed Est Est Est Proposed09/10 10/11 11/12 12/13 13/14 $/Dt
PIII - Alabama CBM 5,000,000 5,200,000 7,000,000 7,000,000 6,500,000 1.19$ PIII - Kansas CBM (500,000) (500,000) (500,000) (500,000) (0.16)$ PIII - PGP - Pool 1 500,000 (6,000,000) (4,600,000) (3,800,000) -$ PIII - PGP - Pool 2 (2,600,000) (2,100,000) (1,800,000) -$ PIII - PGP - Pool 3Portolio Total 5,500,000 4,700,000 (2,100,000) (200,000) 400,000
TEAC - Goldman 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 0.59$ PEAK - BP Corp 100,000 100,000 100,000 100,000 100,000 0.17$ MS - ML and JP 2006 A&B 4,100,000 4,400,000 4,400,000 4,400,000 4,400,000 0.46$ MS - ML 2007A 24,400,000 1,600,000 1,600,000 1,600,000 1,600,000 0.67$ MS - RBC 2010A 500,000 500,000 500,000 -$ Total Prepaid Supplies 30,400,000 7,900,000 8,400,000 8,400,000 8,400,000
Sale to Richmond (JP & ML) incl G&A (2,100,000) (2,100,000) (2,100,000) (2,100,000) (2,100,000) ML 2007A G&A deferral (2,800,000) Retained MS and PGP Cash 4,200,000 2,300,000 1,700,000Total Offsets / Sales to Others (4,900,000) (2,100,000) 2,100,000 200,000 (400,000)
Total LT Supply Rebates 31,000,000 10,500,000 8,400,000 8,400,000 8,400,000
Municipal Gas Authority of Georgia
Board Planning SessionMarch 21, 2011 - 25 -
2010 Financial Results
Expected Long-Term Supply Project Results
Actual Proposed Est Est Est09/10 10/11 11/12 12/13 13/14
Total LT Supply Rebates 31,000,000 10,500,000 8,400,000 8,400,000 8,400,000
Monthly Project Credits 1,700,000 1,900,000 0 0 0
Monthly Credits - Cents per dt 0.05 0.05
Annual LT Supply Rebates 29,300,000 8,600,000 8,400,000 8,400,000 8,400,000
G&A Transfer 250,000
Working Capital Reserve (20,000,000)
Total Cash Available - LT Supplies 9,550,000 8,600,000 8,400,000 8,400,000 8,400,000
Annual LT Returns - Cents per dt 0.28$ 0.25$ 0.24$ 0.24$ 0.23$
Other Returns
Storage returns - Southern 1,650,000 1,737,000 1,737,000 1,737,000 1,737,000
Storage returns - Transco 100,000 138,000 138,000 138,000 138,000
Portfolio Reserve Interest 100,000 30,000 30,000 50,000 50,000
Total Cash Returns 11,400,000 10,505,000 10,305,000 10,325,000 10,325,000
Total Benefits - Cents per dt 0.34$ 0.31$ 0.29$ 0.29$ 0.29$ Estimated Volume 34,000,000 34,000,000 35,000,000 35,560,000 36,120,000
Municipal Gas Authority of Georgia
Board Planning SessionMarch 21, 2011 - 26 -
Based on Net Benefits to Members Cost of Membership above Spot Index
General & Administrative Costs (G&A) Swing Supply Charge
Less: Savings from Membership Portfolio Savings and Current Year Reserves Capacity Release Revenues and Swing Supply
Returns Storage Project Net Operating Revenues/Expenses
Drives Incentive Compensation Plan Pays out only if Corporate Goal achieved 80% based on Corporate results 20% based on Group results Multiplier between 0 and 1.1 for individual
performance
Corporate Goals and Incentive Compensation Plan
2010 Corporate Goal
Municipal Gas Authority of Georgia
Board Planning SessionMarch 21, 2011 - 27 -
Corporate Goals and Incentive Compensation Plan
2010 Corporate Goal
2010 2010Goal
AverageActual
AverageGoal
IndividualActual
IndividualGoal Actual ($/MMBtu) ($/MMBtu) ($/MMBtu) ($/MMBtu
Cost of Membership Above Index:G&A Budget Estimate 3,620,551$ 3,715,305$ 0.106$ 0.109$ 0.090$ 0.100$
Swing Supply Charge 2,000,000 1,975,348 0.059 0.058 0.088 0.089
Total Cost 5,620,551$ 5,690,653$ 0.165$ 0.167$ 0.178$ 0.188$
Savings from Membership:Portfolio Cash Returns (monthly and annual) 12,200,000$ 10,500,000$ 0.359$ 0.309$ 0.328$ 0.288$
Portfolio Reserve Interest 100,000 30,688 0.003 0.001 0.001 0.000
Swing Supply Savings 1,500,000 2,067,795 0.044 0.061 0.066 0.093
Capacity Credits 2,700,000 2,966,474 0.079 0.087 0.017 0.014
Storage Net Income * 2,400,000 2,913,000 0.071 0.086 - - Total Savings: 18,900,000$ 18,477,957$ 0.556$ 0.543$ 0.412$ 0.395$
Net Benefit of Membership below Index: (13,279,449)$ (12,787,304)$ (0.391)$ (0.376)$ (0.234)$ (0.207)$
Smyrna 2010 Projected Low Member
Municipal Gas Authority of Georgia
Board Planning SessionMarch 21, 2011 - 28 -
Corporate Goals and Incentive Compensation Plan
2010 Corporate Goal Results - ¢ Below Spot
Weighted Average Payout – 0%
Goal - Average Payout % Goal - Individual Payout %Maximum (0.441) 125% (0.284) 125%Stretch (0.416) 100% (0.259) 100%Target (0.391) 75% (0.234) 75%Actual (0.370) 0% (0.198) 0%
Cents below Index
Municipal Gas Authority of Georgia
Board Planning SessionMarch 21, 2011 - 29 -
Proposed 2011 Corporate Goal
2010 2010 20112011
Average2011
IndividualGoal Actual Goal ($/MMBtu) ($/MMBtu)
Cost of Membership Above Index:
G&A Budget Estimate 3,620,551$ 3,715,305$ 3,718,457$ 0.106$ 0.098$
Swing Supply Charge 2,000,000 1,975,348 2,000,000 0.057 0.088
Total Cost 5,620,551$ 5,690,653$ 5,718,457$ 0.163$ 0.186$
Savings from Membership:
Portfolio Cash Returns 12,200,000$ 10,300,000$ 8,400,000$ 0.240$ 0.222$
Portfolio Reserve Interest 100,000 30,688 50,000 0.001 0.000
Swing Supply Savings 1,500,000 2,067,795 1,250,000 0.036 0.059
Capacity Credits 2,700,000 2,966,474 2,200,000 0.063 0.014
Storage Net Income 2,400,000 2,913,000 1,600,000 0.046
Total Savings: 18,900,000$ 18,277,957$ 13,500,000$ 0.386$ 0.296$
Net Benefit of Membership below Index: (13,279,449)$ (12,587,304)$ (7,781,543)$ (0.222)$ (0.110)$
Note: 2011 Averages $/MMBtu are based on 2011 budgeted volumes versus 2010 actual volumes to minimize the impact of weather related fluctuations
Municipal Gas Authority of Georgia
Board Planning SessionMarch 21, 2011 - 30 -
2011 Proposed Corporate Goal
2010 and 2011 Corporate Goal Comparison
2010 Average
2011 Average
2010 Individual
2011 Individual
Maximum (125%) (0.441) (0.268) (0.284) (0.145) Stretch (100%) (0.416) (0.243) (0.259) (0.120) Target (75%) (0.391) (0.218) (0.234) (0.095)
Municipal Gas Authority of Georgia
Board Planning SessionMarch 21, 2011 - 31 -
Portfolio III Investments in Member Debt
Existing and proposed Member Debt in excess of the SPP threshold ($1 million) presents an opportunity for Portfolio III investment
PIII is authorized to invest in municipal debt obligations with at least an ‘A’ credit rating
PIII would benefit from investments through higher investment earnings on excess cash
Members would benefit through access to lower current interest rates
Municipal Gas Authority of Georgia
Board Planning SessionMarch 21, 2011 - 32 -
Portfolio III Investments in Member Debt
Potential investments
Same legal structure as Small Projects Pool Supplemental Contract
General Obligation of the Member
Rates established including small premium over market rates
0.50%
Lease AmtCurrent Interest
Market Interest
Member Interest Rate
1st Yr Premium
1st Yr Interest
Buford Refunding - matures 2014 2,755,000$ 5.20% 2.00% 2.50% 13,775$ 68,875$ Warner Robins Refunding - matures 2026 4,150,000$ 5.85% 4.25% 4.75% 20,750$ 197,125$ Eatonton Expansion - Reynolds Plantation - 2021 2,000,000$ n/a 3.75% 4.25% 10,000$ 85,000$ Tri-County Expansion - Reynolds Plantation - 2021 2,500,000$ n/a 3.75% 4.25% 12,500$ 106,250$ Total 11,405,000$ 57,025$ 457,250$
Potential Member Debt for PIII Investment
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