PROJC01840 ‎(2)‎

• Contract/PO #: C150270
• Contractor Name: Headgate 135 Lateral, Inc.
• Contract Type: Loan
• Water District: 0
• County: Mesa
• Loan Projects - Doc Type: Approval Letter

Headgate 135 Lateral, Inc.
July 15,2008 (Revised July 25, 2008)
Page 4 of 5

Agenda Item 16b

Table 2 shows a summary of the financial aspects ofthe Project.

Table 2. Financial Summary of Project

Total Project Cost $260,000
Initial Loan (100% of Project Cost) $260,000
Other Funding Assistance $126,000
Balance of Corporation's Obligation $134,000
1 % Service Charge $2,600
Post-construction Loan Amount $136,600
Annual Loan Payment Amount $7,430
Annual Loan Obligation (including debt reserve funding) $8,160
Annual Project Cost per acre-foot (based on 500 acre-ft) $14.80/ac-ft
Before After
Shareholder Assessments $50/share $95/share
Subdivision User Assessment $15/user $25/user

Creditworthiness: The Corporation was incorporated in 1988 and has no existing debt. Repayment
of the loan for the Project will be accomplished by an increase in annual shareholder assessments
and subdivision user fees.

Table 3 shows the Financial Ratios for the Corporation.

Table 3. Financial Ratios

Past Years Future
Financial Ratio wi Project
Operating Ratio (revenues/expenses) 116% 100%
I weak: <100% ~ -I average: 100% - 120% I-I strong: >120%1 (Average) (Average)
$5.8/5.0K $13.1/13.1K
Debt Service Coverage Ratio 100%
(revenues-expenses)/debt service (N/A) (Average)
I weak: <100% I-I average: 100% - 120% I-I strong: >120%. $13.1-5.0/8.1K
Cash Reserves to Current Expenses 50% 19%
I weak: <50% I-I average: 50% - 100% I-I strong: > 1 00%' (Average) (Weak)
$2.5/5.0K $2.5/13.1K
Annual Operating Cost per Acre-Foot (based on 500 AF) $5.00 $26.00
!weak: >$20 I-I average: $10 - $20 ~ -I strong: <$101 (Strong) (Weak)
$5.0K/500 $13.1K/500

Collateral - As security for this loan, the Corporation will pledge its revenues from assessments and
user fees backed by an assessment covenant and the Project pipeline and all associated access
easement rights. This security is in compliance with CWCB Financial Policy #5 (Collateral).