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than expected operating costs. <br />Table 8 shows the Annual Financial Schedule of income and expenses for the LCRC. This includes <br />the Company's operations and the yearly payment of $19,245 for the $ 389,700 CWCB loan at <br />2.75% interest over a 30-year repayment period. <br />Column (1) shows the assessment level projected over the life of the project and loan; column (2) <br />shows the revenue from assessment on 160 shares of stock; column (3) shows the "other income" <br />the company has from hunting leases, water transfers, and augmentation. The other income has <br />varied considerably over the past three years due to the sale of augmentation water. The "other <br />income" used in Table 8 is the average from 2006 and 2007. The other income for 2008 was <br />$147,879 which was assumed to be greater than can be sustained over the life of the loan. <br />The income from augmentation water was $36,000 in 2006; $28,000 in 2007; and, $127,000 in 2008. <br />The sale of augmentation water started in 2006 and as such there is no long term history to determine <br />what the sustained average will be. For 2009 the augmentation income is expected to be a few <br />thousand dollars due to the water situation and the economy. In the long run, based on 2006 and <br />2007, we have estimated the other income due to the hunting leases and augmentation water to <br />conservatively be approximately $52,000 per year. This was used in column (3) for "Other Income". <br />In 2009 column (3) was adjusted to provide a cash balance at the end of 2009 of approximately <br />$40,000 which was estimated by the LCRC. <br />Column (4) in Table 8 shows the operating expenses. For 2009 the O&M expenses used are from <br />the 2008 financial statement. This amount is significantly higher than in 2006 and 2007 due to <br />higher than normal legal expenses. These are expected to abate in 2010 and a more normal amount <br />of $76,000, which is the average of 2006 and 2007, is used for the remainder of the loan period. <br />Column (5) is ths loan payment on the existing CWCB loan. <br />Column (6) in Table 8 shows the funds that will be required by the LCRC for its share of the project <br />cost including the Feasibility Study in 2009 and the 1% loan origination fee in 2010. <br />Columns (7) and (8) show the loan payments that will be required to the CWCB and the payment <br />made into the Project Reserve Fund the company will be required to maintain. <br />The total income and expenses are indicated in Columns (9) and (10) with the net income for each <br />year shown in Column (11). The cash balance is the sum of Column (11) and the cash balance from <br />the previous year. The assessment levels were set to maintain A CASH BALANCE of <br />approximately $15,000 which is approximately 20% of the average O&M expenses. After ten years <br />the LCRC will also have a Reserve Fund of $19,250. <br />Table 8 is presented in current dollars as no inflation is included. Interest was included only on the <br />Reserve Fund and is reflected in the column (12). <br />Gray Reservoirs-Feasibility Study Page 10 <br />