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WRCC, Inc. - Loan Increase January 14, 2011 (Updated February 3, 2011) Page 2 of 3 Background Consent Agenda Item 3a The Company owns six storage reservoirs and over 25 miles of supply ditches across Larimer and Weld Counties in Colorado. The reservoirs are, Big Windsor Reservoir, Douglas Reservoir, Reservoir #8, Annex Reservoir, Elder Reservoir and Cobb Lake. The Company provides irrigation water to 55,000 acres of irrigated crops. Cobb Lake is a 22,300 AF water supply reservoir located northeast of Fort Collins in Larimer County. The Reservoir is supplied by the Poudre Valley Canal that diverts water directly from the Cache la Poudre River. The existing inlet ditch is approximately 2,200 feet long and has cast-in- place concrete structures that were constructed in the early 1900s. The inlet ditch has eroded causing very steep ditch side slopes that are a safety concern. The inlet structures are subject to failure which would make filling the Reservoir impossible. Project Cost Increase During the design phase of the project there was serious consideration of continuing the rip rap design section throughout the entire length of the inlet canal at an estimated cost of $500,000. A decision was made to evaluate the newly constructed inlet during operations and identify r deficiencies at that time. During the 2010 winter fill, it became apparent that an additional 650 feet of channel needed $130,000 of rip rap to avoid erosion. The Company considered this to be a successful outcome since it saved nearly $370,000 by evaluating the system after it performed. The Company had approximately $75,000 of contingency dollars available in the original project estimate, to address a part of the cost overrun. Financial Analysis This Table shows a summary of the financial aspects of the loan request. The Company has 938.5 agricultural shareholders and 61.5 non-agricultural/middle income municipal shareholders; therefore, a blended interest rate of 2.85% for a 30-year loan was used. FINANCIAL SUMMARY PROJECT/LOAN Prior Current A roval A roval Total Pro'ect Cost $1,433,000 $1,488,000 CWCB Loan (90% of the Pro'ect cost) $1,289,000 $1,339,200 CWCB Loan Includin 1% Service Fee) $1,301,890 $1,352,590 CWCB Annual Loan Pa ent $65,140 $67,680 CWCB Loan Obli ation (inc. debt reserve fundin ) $71,654 $74,440 Annual Cost Per Share 1,000 shares $71.65 $74.44 Current Assessments er share $375 $443* Future Assessments er share $515 $518 * The Company has a$1.3 million CWCB loan ($70,000 annual debt service) for the Windsor Dam and Spillway Maintenance Project. Construction was completed in November 2008 and repayment began December 1, 2010.