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Table 3. Financial Summary Project Cost $1,320,000 CWCS Loan amount (12% of cost) $162,180 CWCS Loan Pavment Amount $12,270 Sank Loan amount (53% of cost) $694,000 Sank Loan Pavment Amount $62,985 Number of Shares of Stock 857 Average Annual Loan Cost per Share $87 Annual Project Cost per 1,000 gallons $0.82 (Average annual diversions: 90 million gallons) Water treatment costs are expected to decrease with the new treatment plant. The debt service can be accommodated by the Company's existing budget, approved by the shareholders at the December, 2003 Annual Meeting, Credit worthiness: USCDWUA has existing debt of approximately $50 thousand, which is the remaining mortgage on the property for the new treatment plant. Financial Statements for 2001 and 2003 are included in Appendix G. Alternative financing considerations: USCDWUA has investigated alternative financing sources, A grant has been applied for from the Colorado River Conservancy District in the amount of $15,000, Most sources of funding for drinking water projects are not available to USCDWUA because of its private, non-profit status instead of municipal or special taxing district. Collateral: As security for the CWCS loan the USCDWUA can pledge assessment income, and the project itself. Economic Analysis There are approximately 770 residences served by USCDWUA. If each property is assigned a conservative value of $150,000, the value of property affected is $115.5 million. A reliable domestic water supply is obviously necessary to maintain this value. If there were no public water supply, it is reasonable to assume that property values would decrease significantly. At a cost of $1.32 million, the project returns an enormous benefit. Social and Physical Impacts The project will have no significant social impacts, since it will assure the continued operation of a currently existing domestic water system. The project will have minor physical impacts, once construction is complete. 10