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Mr. Dennis Gelvin November 19, 1996 Page 4 ~ ;odI ~/t-? ?tJ,,~ ..$aY k.....c Atf7 e:-- EXHIBIT IV - FINANCIAL FEASIBILITY - UERWA UERWA is a financially stable entity which currently provides water service to in excess of 9,000 single family equivalents ("SFE") and is budgeting to sell approximately 1,057,269,000 gallons of water during 1997. Water service fee revenues are expected to generate approximately $2.5 million during 1997. UERWA imposes a flat fee per SFE of $1.50 per month which is expected to generate approximately $175,000 during 1997. A $500 plant investment fee is also charged on all new SFE' s constructed within the UERWA service area and is expected to generate $277,000 during 1997. The UERWA expects to add an average of 371 SFE's during the next ten years and, consequently, is in the process of expanding its water treatment and storage systems. The UERWA has maintained stable water rates of $2.27 per 1,000 gallons during the last several years, bu"t has received approval from its participating metropolitan districts to increase rates to help defray the additional debt service and operating costs associated with the UERWA water treatment and storage system expansion program. Exhibit IV indicates that UERWA will need to increase its water rates by approximately $0.14 per 1,000 gallons to pay its share of the annual debt service and operating costs ($168,952) associated with Eagle Park's Phase I firm water yield acquisition. If you have any further questions regarding the ability of Eagle County, ERWSD, or UERWA to make their respective annual payments to Eagle Park please do not hesitate to contact me. Stan Bernstein and Associates, Inc. has relied on officials of UERWA and ERWSD for various key assumptions regarding the preparation of the enclosed cash flow projections. The scope of Stan Bernstein and Associates, Inc. engagement did not include independently verifying the key assumptions. Consequently, Stan Bernstein and Associates, Inc. disclaims any opinion regarding the achievability of the cash flow projections or the assumptions contained therein. Because events and circumstances frequently do not occur as expected, there will usually be differences between forecasted and actual results and those differences may be material. Very truly yours, fa,. !LJz. t.J ~.OrlV'>' .;1>> C. Stan Bernstein and Associates, Inc.