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Denver Southeast Suburban Water and Sanitation District <br /> Parity Certificate <br /> Page 2 <br /> The calculations for the additional debt covenants are displayed on Exhibit A. Financial <br /> information used in these calculations was obtained from the District's 2012 and 2013 <br /> audited financial statements. The most restrictive covenant of each loan program has <br /> been used for these calculations. Therefore, annual debt service has been calculated at <br /> 110% and tap/connection fee revenue has been reduced by 50% of the average annual <br /> total tap fees, net of cost recovery payments, for the three prior years. Based upon these <br /> calculations, the District was able to pay all its annual operating expenses and meet its <br /> debt service obligations in 2012 and 2013, with excess revenues of $2,434,261 and <br /> $1,448,714, respectively. The District had additional debt capacity of $1,759,817 and <br /> $1,470,357 in 2012 and 2013, respectively. <br /> Exhibit B provides calculations based only on the covenants for the 2014 CWCB Loan. <br /> Based upon these calculations, the District was able to pay all its annual operating <br /> expenses and meet its debt service obligations in 2012 and 2013, with excess revenues of <br /> $2,601,965 and $1,682,758, respectively. The District had additional debt capacity of <br /> $2,198,395 and $1,943,511 in 2012 and 2013, respectively. <br /> We were not engaged to, and did not conduct, an examination in accordance with <br /> generally accepted auditing standards in the United States of America, the objective of <br /> which would be the expression of an opinion on the financial statements of the District. <br /> Accordingly, we do not express such an opinion. We performed our engagement as a <br /> consulting service under the American Institute of Certified Public Accountants' <br /> ("AICPA") Statement of Standards for Consulting Services. Had we performed <br /> additional procedures, other matters might have come to our attention that would have <br /> been reported to you. <br /> We are not independent with respect to Denver Southeast Suburban Water and Sanitation <br /> District. <br /> Certified Public Accountants & Consultants <br /> ....,q CC. P <br /> Enclosure <br /> cc: Heather Beasley, District Manager <br />