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NPIC will cover any costs that exceed the estimated project cost. NPIC is requesting a 20-year loan from the CWCs. The current ownership of NPIC stock is 35% agricultural and 65% municipal resulting in a blended lending rate of 3.25%. At this rate the annual payments would be $41,818. To this would be added $4,182 per year for the first 10 years to fund the emergency reserve account, for a total annual cost of $45,999. Annual Assessments will increase from $85 per share to $90 per share. This represents an annual assessment increase of $5, or $1.05 per acre-foot based on average annual deliveries of 4.44 acre-feet per share. Proiect Cost $760,000 Loan Amount (80% of Proiect Cost) $608,000 CWCB Loan Payment Amount, includinQ 10% loan reserve $45,999 Number of Shareholders 646 Number of Shares of Stock 10.000 Current Assessment per Share $85 Future Assessment per Share $90 Annual Proiect Cost per acre-foot (Ava. annual delivery: 4.4 acre-feet/share) $1.05 Table 2. Financial Summary The 20% portion of the project cost can be absorbed in NPIC's operating budget. Credit worthiness: NPIC assesses shareholder fee's annually (February 1) based on the projected operating costs, debt service, and water assessment costs for the year. If it is evident that there will be surplus funds at the end of the fiscal year (October 31) the Board of Directors typically refunds the money to the shareholders in the form of cash or allows shareholders to apply the refund to the next years assessment. If expenses exceed the projected amount NPIC draws funds from a $500,000 unsecured line of credit from the First National Bank in Fort Collins. The loan amount is included in the next years projected expenses and repaid when the first assessments are received. This method of operation results in financial ratios of 100% with or without the project. NPIC has seven outstanding loans with the CWCB dating to 1985. NPIC has made all scheduled payments on each of these loans. They have no other outstanding loans at this time. In 2003 the CWCB debt retirement accounted for $33 of the $85 assessment. Of the remaining $52, $44 went to Operations and Maintenance, and $8 went to Water Assessments. The Water Assessment fees include $1.50/unit for 40,000 units of Colorado Big Thompson water and fees for shares in other ditch companies. On January 22, 2004 NPIC completed the sale of the Halligan Reservoir site to the City of Ft. Collins for $5,363,675 while retaining the current storage rights. During the past six years the City has made annual payments totaling $1,024,670 to retain the option to purchase the site. Upon completion of the sale the full amount of the option payments was applied to the purchase price. At the - 5-