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Financial Plan <br /> PRID will be responsible for financing and constructing the raw water facilities and treatment <br /> plant. Funding for the raw water facilities is being requested from the CWCB through this <br /> feasibility study. Funding for the treatment plant and the water storage tank will be requested <br /> from Farmers Home Administration and/or the Colorado Water Resources and Power <br /> Development Authority. The Vallecito Water Company will apply for distribution pipeline <br /> funding from Farmers Home Administration. <br /> The financial key to the project is pre-construction sale of taps by the Vallecito Water Company. <br /> The Company is in the process of contacting home and lot owners to sign up for taps including a <br /> down payment. The tap sign ups will be conducted initially from October, 1996 until an <br /> adequate number of taps have been sold to justify construction, at which time specific sizing and <br /> pipeline plans can be developed. Tap sign ups will continue indefinitely after construction <br /> begins. <br /> The upfront funding requirements for the CWCB loan will be provided from PRID reserves and <br /> from tap fee down payments; approximately $114,000 will be provided by PRID and $341,000 <br /> from a CWCB loan. The PRID Resolution to apply for a CWCB loan, the CWCB Loan <br /> Application, and the CWCB Memorandum of Loan Approval and Approval Letter are found in <br /> Appendix D. <br /> The financial condition of the PRID is solid at the present time. PRID has no obligations except <br /> current operating expenses and is not in default on any of its obligations. The PRID Financial <br /> Statements for 1994, and 1995 are found in Appendix C. <br /> The company currently has about 45,000 shares of stock (a share for each acre) issued and <br /> outstanding with an annual assessment to stockholders. In 1996 the assessment will be $?? per <br /> share. If necessary, PRID can increase the assessments charged to stockholders, by a majority <br /> vote of the stockholders. <br /> A table showing cash flow for a $341,000 CWCB loan at 5 % interest over a 20-year repayment <br /> period is shown on page 10. Annual debt service amounts to about$27,400 per year. <br /> Collateral <br /> PRID has the following collateral it can offer for the CWCB loan, in this order of preference: <br /> 1. The project itself. The project will be owned by PRID and can be <br /> offered by vote of the Board of Directors. <br /> 2. A portion of the revenues from sale of water to the Vallecito Water <br /> Company expected to be in the range of $2.00 per thousand <br /> gallons; approximately $.50 for raw water, $.50 for treatment <br /> OM&R, and$1.00 for debt service. <br /> 9 <br />