C150109 Feasibility Study

• Contract/PO #: C150109
• Contractor Name: Larimer and Weld Irrigation Company, The
• Contract Type: Loan
• Water District: 2
• County: Weld
• Bill Number: MC3
• Loan Projects - Doc Type: Feasibility Study

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operating expenses. This reserve is approximately equal to 10% of their normal 0 & M expenses
and is close to the reserve usually carried by the Company.

To reduce the short term impact on the Company's finances and to stabilize the assessment level,
a five year loan has been considered to pay one half of the Company's obligation for the project.
This would be a loan of $143,306 at a 5.75% interest for five years. The loan is included as
income in column (3) in 2003 and has a yearly loan payment of $35,107 which is shown in column
(5a).

As indicated in Table 6, the assessments will not be higher than the current assessment of $215.
The highest assessment predicted is $170 per share in 2005 with the assessments dropping down
to $140 per share after 2010.

Credit Worthiness. The Company currently has no outstanding loans. The Company has
conducted business with the Eaton Bailk/Farmers Bank on a long term basis and has the ability to
borrow money as required to conduct their normal business.

Alternative Financinl: Considerations. The Company has investigated alternative fInancing with
the Farmers Bank located in Eaton, Colorado. The bank has indicated they would consider a loan
for th(~ Company after review of their financial status. The loan would initially be a one year
revolving line of credit, prime plus I1h percent, floating, with an up front loan fee of 1/2 percent.
This loan could be renewed as needed or converted to a permanent mortgage. Included in
Appendix F is a letter from the bank stating their position.

Larimer & Weld Feasibility Study

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