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<br />Young Creek Reservoir Company <br />September 14-15, 2004 <br /> <br />Agenda Item 4c <br /> <br />Table 1. Financial Summary <br /> <br />Proiect Cost $217,125 <br />Number of Shareholders 34 <br />Number of Shares of Stock 60 <br />CWCS Loan Amount (30 vears). $195;400 <br />CWCS Loan Payment (includes 10% reserve) $10,270 <br />Current Assessment per share (2004) $100 <br />New Assessments per share $290 <br />Annual Cost of Loan per AF (storaQe of 782 ac-ft.) $13.13 <br /> <br />Creditworthiness: YCRC has a current debt of $42,651 with the Surface Creek Sank for work that <br />was completed to evaluate the rehabilitation of the reservoir. This loan has been secured on a <br />short-term basis and the company is paying interest only. This will be converted to an interest <br />bearing term loan covering the balance, after CWCS funds become available, to retire some of the <br />existing bank loan. The CWCS loan will payoff $20,926 of this loan, leaving $21,725 to be <br />financed for 10 years at 7.5% with an annual payment of $3,165. The bank loan will be unsecured. <br /> <br />Table 2 shows the Financial Ratios for the YCRC, and indicates average ability overall to repay the <br />$195,400 CWCS loan, and the Surface Creek Sank loan, with the assessments increased from <br />$100 to $290 per share. <br /> <br />Table 2. Financial Ratios <br /> <br />Financial Ratio Without With completed <br /> the project project <br /> (Aver. 2002-03) (Future Year J <br />Operating Ratio (revenue/expense) <br />weak: less than 100% 200% 600% <br />average: 100% - 120% (strong) (strong) <br />strano: areaterthan 120% <br />Debt Service Coverage Ratio <br />(revenues-expenses )/debt service 100% 109% <br />weak: less than 100% (aver.) (aver.) <br />average: 100% - 125% <br />strano: areaterthan 125% <br />Cash Reserves to Current Expense <br />weak: less than 50% 57% 18% <br />average: 50% - 100% (aver) (weak) <br />strano: oreaterthan 100% <br />Annual Operating Cost per Acre-Ft. (1012 AF) <br />weak: greater than $20 existing $5.79 $16.15 <br />average: $10 - $20 (strong) (aver.) <br />strano: less than $10 <br /> <br />The ratio of Cash Reserves to Current Expense is in the weak category, but it is fairly typical <br />practice for ditch companies to not carry large cash reserves from year to year. <br /> <br />As security for the loan, YCRC will pledge assessment revenues backed by an assessment <br />covenant and Reservoir #1-2 itself. This is in compliance with CWCS Loan Policy #5 (Collateral). <br /> <br />Page 4 of 5 <br />