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-- io'I- # 11. The lending rate will be a weighted or blended rate based on the percent of shares owned by municipal entities and agricultural entities. If a 20-year term is requested, the lending rate is reduced by 1,4 of one percentfrom the 30-year rates adopted by the Board in November 1998. 12. A more detailed listing of collatenil proposed for these loans should be provided (on page 25). 13. More discussion and explah~tion are needed for Table 15. The assumptions and approach for the benefit/cost analysis should be provided. Similarly, the rationale for the other three par'lmeters given by the equations at the bottom of page 25 should be explained. Also suggest adding a column for Annual Cost in Table 15 which would be the sum of the CWCB loan payment (column 2) plus the NPIC Cost amortized for 20 years plus some amount for 0, M &R. 14. In Table 13, suggest adding a column on the left side for Total Revenues. The column Estimated Other Income needs some explanation in the text, what are the other income . sources? Suggest that a column be provided for each loan contract with the CWCB. Thus, the two requested new loans would each have a single column for repayment schedules for 20 years. Any other long-term debt of the Company should also be shown in the Table 13. 15. The projections in Table 13 tend to indicate that new debt is very marginal given the projected levels of assessments. I don't believe we can present this scenario to the Board as financially feasible. Table 13 indicates an operating deficit in virtually each year and a very marginal reserve fund. For-;the purposes of the feasibility study, some trial and error or sensitivity analyses using varying levels of assessments for the Company's consideration might be the best approach. The only guidance I can provide here is an increasing emphasis by the Board in the last few years on sound financial management with adequate reserve funds and a financial rule of thumb that reserves shouldn't be less than 50 percent of current expenses. In practice, we attempt to be as flexible as we can in the case of agricultural water users but this particular situation is very marginal and involves a large loan and a borrower with a substantial amount of existing debt. 16. The overall financial impact of the project should be described in terms of the required increase in per share assessments and the resulting cost per acre-foot of average annual yield for the entire system. 17. A project implementation schedule. should be provided. 18. The revenue/expenditure projection (Table 13) should include a column for a CWCB loan reserve fund. The reserve,fund, which can be accumulated over a period of ten years, should be equivalent in amount to one annual payment. The balance in the reserve fund can be used to make the final loan payment.