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<br />Lower Bauer West Lateral, Inc. <br />September 7,2004 <br />Page 3 of 4 <br /> <br />Agenda Item 4b <br /> <br />Table 1 shows a summary of the funding sources for the project: <br /> <br />Table 1. Project Funding Sources <br /> <br />. Funding Source In-Kind/Grant Loan <br /> Initial Financing Phase <br />NRCS - Plannina and Design $58,500 - <br />NRCS Construction Cost Share - - <br />CWCB Loan - $195,000 <br />Company - - <br />Total. ($253,500) $58,500 $195,000 <br />Post-Construction Financing Phase <br />NRCS - Plannina and Desian $58,500 - <br />NRCS Construction Cost Share $146,250* - <br />CWCB Loan $48,750 <br />Company - - <br />Total ($253,500) $204,750 $48,750 <br /> <br />* Received after construction is complete from NRCS Salinity Control Project. <br /> <br />Table 2 shows a summary of the financial aspects of the Project. A CWCB Loan of $48,750 would <br />require an annual obligation of $3,105 ($2,329 for amortized annual payment and $776 for the reserve <br />account for the first three years - see loan conditions below) for the loan terms of 2.50% for 30-years. <br />The annual CWCB loan payment represents a loan cost of $2.45 per acre-foot for the Project based on <br />an average annual delivery of 951 acre-feet of water. Since all other funding for the Project is in the <br />form of NRCS grants, the Company would have no other debt service on this Project. <br /> <br />Table 2. Financial Summary of Project <br /> <br />Total Pro'ect Cost <br />Pro'ect Construction Cost <br />CWCB Post-Construction Loan Amount <br />Annual Loan Pa ment Amount <br />Annual Loan Obligation (including debt reserve funding) <br />Annual Project Cost per acre-foot (based upon 951 acre-ft) <br /> <br />$253,500 <br />$195,000 <br />$48,750 <br />$2,329 <br />$3,1 05 <br />$2.45/ac-ft <br /> <br />Creditworthiness: The Company was incorporated in July of 2004 for the purpose of undertaking the <br />Project and therefore has very little financial history. The Company has no existing debt. Repayment <br />will be accomplished by member assessments according to the Company's Funding Agreement. <br /> <br />Table 3 shows the Financial Ratios for the Company. The Company proposes to assess the members <br />$55/shareto cover the CWCB loan and estimated maintenance costs. This assessment is based on 62 <br />shares. The ratios indicate average to strong ability to repay the $48,750 loan. <br />