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~ Platte Valley Irrigation Company November 13-15, 2006 Agenda Item 1 De Table 2 shows the Financial Ratios and indicates overall average ability to repay the $2,365,000 . CWCB loan, with the increased assessments. For the purpose of the financial ratios, future assessments were assumed to be $545. This also assumes that the full CD interest is included in the analysis. If no CD interest were included, assessments would need to be increased by about $300. Table 2. Financial Ratios Financial Ratio Without With project the project Future Year (A ver. 2004-05) 2009+ Operating Ratio (revenue/expense) weak: less than 100% 104% 115% average: 100% - 120% (aver.) (aver.) strong: greater than 120% (335K/323KJ f385K/335K) Debt Service Coverage Ratio (revenues-expenses )/debt service N/A* 105% weak: less than 100% (aver. ) average: 100% - 125% strong: greater than 125% f490K-335K/148K) Cash Reserves to Current Expense weak: less than 50% 26%** 14% *** average: 50% - 100% (weak) (weak) strong: greater than 100% (83K/323K) (65K/483K) Annual Operating Cost per Acre-Ft. (52,401AF) weak: greater than $20 $6.16 $9.22 average: $10 - $20 (strong) (strong) strong: less than $10 f323K/52K) (483K/52K) . * Value is not applicable (N/A) since PVIC has no existing debt. ** Does not include CD: $2,105,751 in 2005 and $1,612,500 in 2004. *** Does not include CD: $2,105,751 The assessments for the years 1997 to 2006 are summarized as follows. Year 2006 2005 2004 2003 Assessment $ 400 $ 400 $ 400 $ 400 Year 2002 2001 2000 Assessment $450 $600 $300 Collateral- As security for the loan, the PVIC will pledge its annual assessment revenue backed by a rate covenant, and the project itself, including the land and physical assets at the reservoir site. This is in compliance with CWCB Loan Policy #5 (Collateral). . 60f7