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Mr. Dennis Gelvin November 19, 1996 Page 3 EXHIBIT II .- FINANCIAL FEASIBILITY - EAGLE COUNTY Eagle County earmarks .35% of its 1% County Sales Tax for its Sales Tax Capital Improvement Fund. Eagle County's most current audited financial statements indicate that during 1995 approximately $2,271,000 was generated from .35% of Eagle County's 1% Sales Tax. Until the year 2002, Eagle County is required to pay debt service on sales tax revenue bonds in amount of approximately $715,000 annually. Subtracting $715,000 of debt service payments from 1995's sales tax revenue base of $2,271,000 results in approximately $1,556,000 available for other Eagle County capital needs such as the acquisition of Phase I firm water yield at an estimated annual cost of $81,327 (debt service and operating costs) . Y' EXHIBIT III - FINANCIAL FEASIBILITY - ERWSD (WATER OPERATIONS) ERWSD is a newly formed financially stable entity with an existing assessed valuation of approximately $401,392,930 for its water operations. ERWSD is budgeting to sell approximately 800,000,000 gallons of water to its customers during 1997 at an effective rate of approximately $1.50 per 1,000 gallons, which is expected to generate approximately $1,200,000 in water service fee revenues. ERWSD also levies less than a one-mill property tax levy for its water operations component which is expected to generate approximabely $391,000 during 1997. ERWSD imposes a $4,500 water tap fee for new taps and is projecting to generate approximately $225,000 annually from water tap fee revenues resulting from the sale of approximately 50 new taps annually during the next ten to twelve years. ERWSD expects to maintain surplus cash balances of no less than $2,000,000 during future years. Exhibit III indicates that ERWSD will need to increase its water rates $0.19 per 1,000 gallons to> pay its share of the annual debt service and operating costs ($151,158) associated with Eagle Park's Phase I firm water yield acquisition.