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The HuerfanaCucharas Irrigation Company <br />May 12, 2009 (UPDATED May 22, 2009) <br />Page 6 of 7 <br />Financial Analysis <br />Agenda ltem 17h <br />Table 3 shows a summary of the financial aspects of the loan request. The interest rate is based on <br />the standard agricultural interest rate of 2.5% for a 30 year term per Financial Policy #7. <br />Table 3. Financial Summary <br />Total Project Cost $1,784,000 <br />CWCB Loan Amount $1,606,000 <br />CWCB Loan Amount (Includin 1% Service Fee) $1,622,060 <br />CWCB Loan Payment $77,500 <br />CWCB Loan Payment (Includin 10% Reserve) $85,250 <br />Borrower 1 Q% Contribution $178,000 <br />Current Assessment per share $10 <br />Annual cost of loan er share $14 <br />Future (with Proj ect) Assessment er share $24 <br />One Time Assessment for 10% Borrower Contribution $30 <br />Creditworthiness: The Company currently has no debt. Repayment of the loan will be <br />accomplished utilizing shareholder assessments. The current assessment is $10 per share. The <br />increase of $14 per share will result in annual assessments of $24 per share. The Company's 10% <br />match will come from a one-time assessment of $30 per share. <br />Table 4. Financial Ratios <br />Financial Ratio Past Years Future <br />Operating Ratio (revenues/expenses) 150% 117% <br />weak: <100% - average: 100% - 120% - stron : >120°/ (Strong) (Average) <br />$60K/44K $146K/125K <br />Debt Service Coverage Ratio N/A 125% <br />(revenues-expenses)/debt service (No ex. debt (Stron <br />g) <br />weak: <100% - avera e: 100% - 120% - stron :>120°/ service) $146-40K/SSK <br />Cash Reserves to Current Expenses 85°�a 2�% <br />(Average) (Weak) <br />weak: <50% - avera e: 50% - 100% - stron :>] 00°/ $34K/40K $34K/125K <br />Annual Operating Cost per Acre (3,000 AF) $13/AF $42/AF <br />(Average) (Weak) <br />eak: >$20 - avera e: $10 - $20 - stron : <$1 $40K/3K AF $125K/3K AF <br />Collateral - Security for the ioan shall be the Company's pledge of assessment revenues backed by <br />a rate covenant and annual financial reporting and the water rights in Huerfano Valley Ditch and <br />Huerfano Lake as noted in Table 1. This is in compliance with CWCB Financial Policy #5 <br />(Collateral). <br />