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<br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br /> <br />FINANCIAL PLAN <br /> <br />The board has already approved an assessment increase of $40 per share which is to be <br />used only for this project. For the past three years the assessments have been $100 per <br />share, and for two years prior the assessments have been $75 per share. An additional <br />raise of $10 per share has been considered for the future if needed. <br /> <br />CREDIT WORTHINESS <br /> <br />The financial condition of the company is solid at the present time. OILC currently has no <br />outstanding loans. A copy of the financial statements from 2001 and 2002 appears in <br />Appendix D. <br /> <br />ALTERNATIVE FINANCING CONSIDERATIONS <br /> <br />OILC has investigated alternative financing with Bank One. The bank has indicated they <br />normally do not provide a 20 year loan for construction projects. The bank states that the <br />current lending rate would be higher than 4.25%. Included in Appendix F is a letter from <br />the bank stating their position. <br /> <br />OPINION OF FEASIBILITY <br /> <br />There do not appearto be significant roadblocks which would keep OILC from successfully <br />completing this project. The ditch board did raise the assessments $40 per share of stock <br />as mentioned above. The benefit is OILC can avoid have a storage restriction placed on <br />Seeley Lake. <br /> <br />Following is a cost to benefit analysis of the project. <br /> <br />Total Project Cost including interest =: $487,125 <br /> <br />Cost per Acre-foot of water stored for an average year <br /> <br />$487,125 -7 (1542 A-Ft x 20 yrs) = $15.80 <br /> <br />Total Cost per Share = $487,125 -7 360 Shares = $1,353.13 <br /> <br />Cost per Share of Stock per year = $24,696.65 -7360 Shares = $68.60 <br /> <br />The current value of the water along the Front Range varies dramatically depending on the <br />source, priority number, and use. Water is being sold for $2,500 to $20,000 per acre-foot. <br />Based on the source of water owned by OILC and the expected firm yield, we believe this <br />water would conservatively have a current value of at least $2,500 per acre-foot. What its <br />value will be at the end of the 20 year loan can only be guessed at, but it will obviously be <br />much greater than the current market value. Based on the value of $2,500 per acre-foot <br /> <br />Rehabilitation of Seeley Lake Outlet - Feasibility Study <br /> <br />Page 9 <br />