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The project has been completed at a final cost of $8,120,469. To-date, CWCB has released $6,090,351 in loan funds to NCLPIC, which is 75% of the total construction cost. Given the cost savings associated with not constructing Dmry Reservoir, NCLPIC is requesting CWCB release the full $7,200,000 in loan funds authorized by CWCB at the November 2003 Board Meeting. This would require that the cost participation from CWCB be changed from 75% to 89%, which would release the remaining $1,109,648 in loan funds to NCLPIC. The funds would be released over the next 10-years to NCLPIC to cover the Company's land payments to Cornish Plains Livestock, LLP for the purchase of the 1,300 acres to construct the reservOlrs. FINANCIAL ANAYLSIS The proposed CWCB cost participation change from 75% to 89% does not change the total loan authorization of $7,200,000 approved by CWCB at the November 2003 Board Meeting. Therefore, NCLPIC financial ratios presented at November of 2003 remain unchanged and are presented again within Table 2 for your review: Table 2. Financial Ratios Financial Ratio Without With completed the project project (Aver. 2001-02) (Future Year- 2008+) Operating Ratio (revenue/expense) weak: less than 100% 121% 228% average: 100% - 120% (strong) (strong) strong: greater than 120% Debt Service Coverage Ratio (revenues-expenses)/debt service 286% 102% weak: less than 100% (strong) (aver.) average: 100% - 125% strong: greater than 125% Cash Reserves to Current Expense weak: less than 50% 18% 11% average: 50% - 100% (weak) (weak) strong: greater than 100% Annual Operating Cost per Acre-Ft. (37,500 AF) $11.33 $22.64 weak: greater than $20 (aver.) (weak) existing average: $10 - $20 strong: less than $10 As security for the loan, the NCLPIC will continue to pledge assessment revenues backed by an assessment covenant and the project itself. The CWCB's security interest in the project itself is second to the $1,409,649 loan with the Cornish Plains Livestock, LLLP. In view of the fact that CWCB will have first position in the pledge of assessment revenues, and considering the overall value of the project as based on its cost of $9,542,000, staff finds the project to be in compliance with CWCB Loan Policy #5 (Collateral). Additionally, ifNCLPIC should choose to sell any portion of the 1,300 acres purchased under the Cornish Plains Livestock Land Purchase Agreement, the proceeds from that sale shall be used to pay down NCLPIC Loan Contract C150163 with CWCB. 3