PROJ01963 ‎(2)‎

• Contract/PO #: C150249
• Contractor Name: Black Dike Pipeline Company
• Contract Type: Loan
• Water District: 0
• County: Montezuma
• Loan Projects - Doc Type: Approval Letter

Black Dike Pipeline Company
May 14, 2007 (Revised May 23, 2007)
Page 3 of4

Agenda Item 3a

Financial Analvsis

Table 1 shows a summary of the funding sources for the project. The total estimated cost of the
project is $598,000. The construction will be funded by NRCS at approximately 65% after the
Project is complete. Therefore, the initial loan amount (during construction) is $598,000, based
on 100% of the estimated total Project cost (Per Policy #11). The loan will be reduced to
$207,000 after the Project is complete and the Company receives $391,000 from NRCS.

Funding Source Grant Loan
Initial Loan Phase
-
NRCS Construction Cost Share - -
CWCS Loan - $598,000
Company - -
Total ($598,000) $ $598,000
Post-Construction Loan Phase
-
NRCS Construction Cost Share $391,000* -
CWCS Loan - $207,000
Company - -
Total ($598,000) $391,000 $207,000

Table 1. Project Funding Sources

* 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 $207,000
will have an annual payment of $13,700 ($10,280 for the annual loan payment and $3,420 for
the reserve account during the first three years - see loan conditions below) under the loan
terms of 2.85% per annum for 30-years. The blended rate is due to part of the project irrigated
lands do not qualify as agricultural production land as defined by NRCS. Not considering the
loan reserve, the annual loan payment represents a loan cost of $10.25 per acre-foot for the
Project based on an average annual delivery of 1003 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 Project Cost $598,000
Project Construction Cost $598,000
CWCS Post-construction Loan Amount $207,000
Annual Loan Payment Amount $10,280
Annual Loan Obligation (including debt reserve funding) $13,700
Annual Project Cost per acre-foot (based on 1003 acre-ft) $10.25/ac-ft

Creditworthiness: The Company was incorporated in March of 2007 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
nine members according to the prorated amount of the decreed flows owned in the pipeline. The