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Platte Valley Irrigation Company November 13-15, 2006 Agenda Item 10e The Total Project cost is estimated to be: 1. Engineering Design 2. Land Acquisition 3. Construction Cost 4. Construction Contingency (15%) TOTAL $ 225,000 309,360 1,821,080 273.160 $2,628,600 Schedule - If the loan is approved by the CWCS, design would start in November 2006, with submittal to the State Engineer's Office (SED) in February 2007. Construction would start in September 2007 and be completed by April 2008. The Corps of Engineers has indicated that a Department of the Army Permit will not be required for the project. Financial Analvsis The total estimated cost of the project is $2,628,600. PVIC qualifies for the agricultural interest rate, and staff is recommending a maximum loan amount of $2,365,000 (90% of the estimated project cost) for 20 years at an interest rate of 2.25%. PVIC will pay the 10% local share ($263,600) of the project cost from increased assessments and existing reserves Table 1 is a summary of the financial aspects of the project. A CWCS Loan of $2,365,000 would have an annual payment of $148,149 (not including the 10% reserve requirement) at the loan terms of 2.25% for 20 years. PVIC will establish a loan reserve fund with $148,149 from their existing reserves. Table 1. Financial Summary Proiect Cost 2,628,600 Number of Shareholders 99 Number of Shares of Stock 344 CWCS Loan Amount (20 years) $2,365,000 CWCS Loan Payment (does not include a 10% reserve) $148,149 Current Assessment per share (2006) $400 New Assessments per share (see note below) $545 - $835 Annual Loan Cost per acre-foot (aver. annual delivery: 52,401ac-ft.) $2.83 Note: The CWCS loan will require increased assessments. The company has looked at several assessment scenarios. In the first, the certificate-of-deposit of $2,105,751 would be used as a funding mechanism and kept intact for the loan period. In this scenario the required future assessment would increase to a maximum of $545. In the second scenario, it is assumed that the CD would be reduced by $500,000 every five (5) years as payment for ditch improvements and possible augmentation plans are initiated. In that case the required assessment would increase significantly from the current $400 to $690 in 2015, $760 in 2015, and $835 per share in 2025. Creditworthiness: PVIC has no existing debt. They have paid for the property required for the project and have a large cash reserve at this time with liquid cash assets of $62,776 and a certificate-of-deposit for $2,105,751. 50f7