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<br />.Tilton Lateral Inc. <br />May 21-22, 2001 <br /> <br />Agenda Item 7a. <br />(Updated May 31, 2001) <br /> <br />Table 2 is a summary of the financial aspects of the project. A CWCB Loan of $100;000 would <br />have an annual payment of $5,981 (including the 10% reserve requirement) at the agricultural <br />terms of 3.5% for 30 years. This represents $6.23 per acre-foot, based on average annual <br />diversions of 960 acre-feet. <br /> <br />Table 2. Financial Summary <br /> <br />Project Cost $153,700 <br />Number of Shareholders 36 <br />Number of Shares of GVIC Stock 230 <br />CWCB Loan Amount $100,000 <br />CWCB Loan Payment (includes 10% reserve) $5,981 <br />Added Assessments per share (Tilton and GVIC)* $0.00 <br />Annual Loan Cost per acre-foot (Average diversions: 960 acre-feet/yr.) $6.23 <br /> <br />(* TLI will be the single share holder for the 230 shares under the GVIC, so that there will be <br />only one "A" share at $157.95 and 229 "B" shares at $6.94. Previously each shareholder was <br />assessed one "A" share, with the remaining shares assessed at the "B" rate. The resulting <br />reduction in GVIC assessments, along with the reduced cost to maintain the new system, <br />offsets the annual cost of the CWCB loan.) <br /> <br />Credit worthiness: TLI has no existing debt. Table 3 shows the Financial Ratios for TLI and <br />indicates average to strong ability to repay the $100K CWCB loan with the project in place. <br /> <br />Table 3. Financial Ratios <br /> <br />Financial Ratio Without With <br /> the project the project <br />Operating Ratio (revenue/expense) 111% 107% <br />weak: less than 100% (average) (average) <br />average: 100% - 120% <br />strona: areater than 120% <br />Debit Service Coverage Ratio No debt 111% <br />(revenues-expenses)/debt service (strong) (average) <br />weak: less than 100% <br />average: 100% - 125% <br />strona: areater than 125% <br />Cash Reserves to Current Expense 499% 116% <br />weak: less than 50% (strong) (strong) <br />average: 50% - 100% <br />strong: greater than 100% <br />Annual Cost per Acre-Foot $ 16.17 $14.87 <br />weak: greater than $20 (average) (average) <br />average: $10 - $20 <br />strong: less than $10 <br /> <br />As security for the loan the TLI will pledge assessment revenues backed by assessment <br />covenant and one payment in a certificate of deposit account to be held by the State. This <br />security is in compliance with CWCB Loan Policy #5 (Collateral). <br /> <br />3 <br />