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.- .. Carpenter & Mitchell Ditch Company May 16,2005 (Revised May 31,2005) Page 3 of4 Agenda Item 15c The loan request is based on the total design and construction cost estimate for the Project, however engineering design and construction oversight may be provided by NRCS as in-kind services. Design is to be complete by August 2005. Construction is expected to begin September 2005 and to be completed in phases during 2005 and 2006. Financial Analvsis Table 1 shows a summary of the funding sources for the project. The total estimated cost of the project is $607,200. The construction will be partially funded by NRCS at 75% after the Project is completed. Therefore, the initial loan amount (during construction) is $607,200, based on 100% of the estimated total Project cost. The loan will be reduced to $227,700 after the Project is complete and the Company receives funds for 75 percent of the construction costs ($379,500) from NRCS. Table 1. Project Funding Sources Funding Source Grant Loan Initial Loan Phase NRCS Construction Cost Share - - CWCS Loan - $607,200 Comoany - - Total ($607,200) $ $607,200 Post-Construction Loan Phase NRCS Construction Cost Share . $379,500* - CWCS Loan $227,700 Company - - Total ($607,200) $379,500 $227,700 * Received after construction is complete from NRCS Salinity Control Funds. Table 2 shows a summary of the financial aspects of the Project. A CWCS Loan of $227,700 will have an annual payment of $14,506 ($10,880 for the annual loan payment and $3,626 for the reserve account during the first three years - see loan conditions below) under the loan terms of 2.50% per annum for 30-years. The annual loan payment represents a loan cost of $19.19 per acre-foot for the Project based. on an average annual delivery of 756 acre-feet of water. Since all other funding for the Project is in the form of NRCS grants, the Company would have no other debt service on this Project. Table 2. Financial Summary of Project Total Proiect Cost $607,200 Proiect Construction Cost $506,000 CWCS Post-construction Loan Amount $227,700 Annual Loan Pavment Amount $10,880 Annual Loan Obligation (including debt reserve funding) $14,506 Annual Project Cost per acre-foot (based on 756 acre-ft) $19.19/ac-ft Creditworthiness: The Company was incorporated in October of 2004 for the purpose of undertaking the Project and therefore has very little financial history. The Company has no existing debt. Repayment will be accomplished by member assessments according to the Company's Funding Agreement. Table 3 shows the Financial Ratios for the Company. The Company proposes to assess the members $1 ,378/share to cover the CWCS Loan and maintenance costs. The Company has 11.25 shares, which is based on the amount of decreed flow in the ditch. (1cfs = 1 share)