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Kluver Reservoir Outlet/Travis Road Embankment Proied None. Financial Analysis The Company operates on a fiscal year ending November 30th each year. The Water Supply & Storage Company shareholders 2008 assessments are $2,300 per share outstanding and entitle each shareholder to a prorata share of the water distributed each year. The 2009 budget has been drafted and approved by the Board of Directors. (Shareholder approval is expected at the January 26, 2009 annual meeting.) The proposed budget includes adequate revenues to fund ongoing operations, other debt service and other 2009 capital expenditure needs, including the Company's share of the cost of both projects, above loan proceeds requested in this loan application. See a copy of the proposed 2009 Budget included in Appendix F. The Company's internal monthly financial statements, unaudited, for the year ending November 30, 2008 are included in Appendix E as well. Credit Worthiness The Company has an excellent credit rating, has never defaulted on its financial obligations (certainly within the knowledge of current Board Members and management. The Company is nearly 120 years old.) See the audited financial statements prepared by Hunt, Spillman and Associates, P.C. for 2006 and 2007 attached in Appendix D. The Company has a credit history with CWCB. It's sister company, the Tunnel Water Company, borrowed about $3.5 Million from CWCB in 2002 to rehabilitate the Laramie- Poudre Tunnel after a partial cave-in that year. The Company funds its prorata share of annual payments on those notes as it owns 2/3 of the outstanding stock of the Tunnel Water Company. Alternative Financing Considerations If the Company is not successful in securing this financing, it will approach commercial banks for additional financing. The Company's Directors considered raising shareholder assessments to pay for these projects. While some shareholders, as one might expect, are more capable of paying higher assessments than others, all shareholders are distressed by these troubled economic times, particularly the small family farmers with limited cash resources. The Board deemed it advisable to apply for financing in lieu of increasing shareholder assessments. Collateral The Company will offer either a pledge of assessment revenues or other Company assets as collateral for the loans. Those other assets could include unencumbered C-BT shares, vacant land or other assets. Economic Analysis As both projects in this proposal are to rehabilitate existing facilities and maintain their historical capacity to provide water to the Company and in light of the fact that the Company's directors have no WSSC - GRD at Windy Pt & Kluver/Travis Rd Projects 13 December 2008