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North Sterling Irrigation District May 12, 2009 (UPDATED May 22, 2009) Page 5 of 6 Financial Analysis Agenda Item 17d The total estimated cost of the Project is $1,204,450. District water ownership is 100% agricultural. The interest rate for this loan is based on the CWCB agricultural interest rate of 2.50% and reduced to 2.25% for a 20-year term. TABLE 3 FINANCIAL SUMMARY Total Project Cost $1,204,450 CWCB Loan Amount $1,084,000 CWCB Loan Amount (Includin 1% Service Fee) $1,094,840 CWCB Loan Pa ent $68,590 CWCB Loan Payment (Includin 10% Reserve) $75,450 Current Assessment Levied er Acre $12 Future (with Pro'ect) Lev er Acre $14 Creditworthiness: The District has no existing debt service. The CWCB loan will be repaid from increases in the levied assessments. The District will pay 10% of the Project costs with its cash reserves. The District has enough cash set aside so that no increase in assessments is necessary for 2009; however, the 2010 budget will require a$2 increase in assessments. The current assessment is $12 per acre and will be increased to $14 per acre with the Project. TABLE 4 FINANCIAL RATIOS Future Financial Ratio Past 2 Years w/ Project Operating Ratio (revenues/expenses) 116% 116% weak: <100% - avera e: 100% - 120% - stron : >120°/ (Average) 30K / (Average) $815K/705K $734K 6 Debt Service Coverage Ratio 246% (revenues-expenses)/debt service No Existing (Strong) weak: <100% - avera e: 100% - 120% - stron :>120°/ Debt $g15-630K/75K Cash Reserves to Current Expenses 39% 18% ~Weak) (Weak) weak: <50% - avera e: 50% - 100% - stron : >100°/ $246K/630K $126K/705K Annual Operating Cost per Acre-Foot (59,654 AF) $11 $12 eak: >$20 - avera e: $10 - $20 - stron : <$1 (Average) (Average) $630K/60K AF $705K/60K AF Collateral: As security for the loan, the District will pledge its assessment revenues backed by a rate covenant and annual financial reporting. This is in compliance with CWCB Financial Policy #5 (Collateral).