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� The Lazy O Ranch Homeowners' Association will be responsible for the financing and the construction management of this project. All work to be completed will be contracted with The Lazy O Ranch Homeowners' Association, Inc. FINANCIAL ANALYSIS The following represents the breakdown of financing the project. The Ranch is applying for a loan from the CWCB in the amount of $150,750, which is 90% of the estimated cost to complete the project. Tables 2 represents the funding sources. CWCB Table 1— Lazy O Ranch Homeowners' Association Irrigation System — Funding Sources ENTITY LOAN % OF FUNDING Banks of Colorado TOTAL � • $150,750 90% $ 16,750 10% Any costs that exceed the estimated project cost will be funded by the Lazy O Ranch Homeowners' Association, Inc. A 20-year loan for $150,750 is being requested from the CWCB at the agricultural interest rate of 2.25%. Attached in Appendix G is the projected budget for the Ranch from 2006-2016. The budget forecast reflects an increase in assessment fees for the members of 30% in 2007 and 2011 to assist in the repayment of loans acquired for the completion of the irrigation project and funding for additional equipment and capital improvements. The Ranch has an outstanding debt at this time of $7,500, which is the balance of a line of credit with Vectra Banks of Colorado. The principal balance is scheduled to be paid in full by December of 2006. Alternative financing considerations. The Lazy O Ranch Homeowners' Association, Inc. has obtained a 10 year line of credit loan from Community Banks of Colorado, with a floating interest rate based on the Wall Street Prime Index. This line of credit will be used to fund 10% of the project costs. Collateral. As security for the CWCB loan, the Lazy O Ranch Homeowners' Association, Inc. will assign the assessment of the members of the Association. A ,�� V �v `�` X �� Lazy O Ranch Homeowners' Association, Inc. Page 9 of 10 September 2006