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Headgate 135 Lateral, Inc. Agenda Item 16b July 15, 2008 Page 4 of 5 Table 2 shows a summary of the financial aspects of the Project. Table 2. Financial Summary of Project Total Project Cost $2 60 ,000 Initial Loan (100% of Project Cost) $260,000 Other Funding Assistance $1 2 6,000 $1 3 4,000 1% Service Charge $2,600 Post - construction Loan Amount $1 3 6,600 Annu al Loan Payment Amount $ 7,430 Annual Loan Obligation (including debt reserve funding) $ 8 , 160 Annual Project Cost per acre - foot (based on 5 00 acre - ft) $ 14.8 0 /ac - ft Before After Shareholder Assessments $50/ s hare $95/s hare Subdivision User Assessment $1 5/ u ser $25/u ser Creditworthiness: The Corporation was incorporated in 1988 and has no existing debt. Repayment of the loan for the P roject will be accomplished by an increase in annual shareholder assessments and subdivision user fees . Table 3 shows the Financ ial Ratios for the Corporation. Table 3 . Financial Ratios Future Past Years Financial Ratio w/ Project 116 % 100 % Operating Ratio (revenues/expenses) ( Average ) ( Average ) weak: <100% - average: 100% - 120% - strong: >120% $ 5.8 / 5.0 K $ 13.1 / 13.1 K Debt Service Coverage Ratio 1 0 0 % (revenues - expenses)/debt service (N/A) ( Average ) $ 13.1 - 5. 0 / 8.1 K weak: <100% - average: 100% - 120% - strong: >120% 50 % 1 9 % Cash Reserves to Current Expenses ( Avera ge ) (Weak) weak: <50% - average: 50% - 100% - strong: >100% $ 2. 5 / 5.0 K $2 . 5 / 1 3.1 K $ 5 . 0 0 $ 26 . 0 0 Annual Operating Cost per Acre - Foot (based on 5 00 AF) (Strong) ( Average ) weak: >$20 - average: $10 - $20 - strong: <$10 $ 5.0 K/ 1 000 $ 13.1 K/ 1 000 Collateral - As security for this loan, the Corporation w ill 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).