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East Mancos Highline Ditch Company July 12 2005 Page 3 of 4 Agenda Item 6c to be complete by September 2005. Construction is expected to begin October 2005 and to be completed in phases during 2005 and 2006. Financial Analvsis Table 1 shows a summary of the funding sources for the project. The total estimated cost of the project is $904,000. The construction will be funded by NRCS at 75% alter the Project is completed. Therefore, the initial loan amount (during construction) is $904,000, based on 100% of the estimated total Project cost (Per Policy #11). The loan will be reduced to $458,074 alter the Project is complete and the Company receives $445,926 for 75 percent of the NRCS estimated construction cost. Table 1. Project Funding Sources Funding Source Grant Loan Initial Loan Phase NRCS Construction Cost Share - - CWCS Loan - $904,000 Companv - - Total ($904,000) $ $904,000 Post-Construction Loan Phase NRCS Construction Cost Share $445,926* - CWCS Loan $458,074 Companv - - Total ($904,000) $445,926 $458,074 * Received alter construction is complete from NRCS Salinity Control Funds. Table 2 shows a summary of the financial aspects of the Project. A CWCS Loan of $458,074 will have an annual payment of $29,180 ($21,885 for the annual loan payment and $7,295 for the reserve account during the first three years - see loan conditions below) under the loan terms of 2.50% per annum for 30-years. Not considering the loan reserve, the annual loan payment represents a loan cost of $33.58 per acre-foot for the Project based on an average annual delivery of 869 acre-feet of water. Since all other funding for the Project is in the form of NRCS grants, the Company would have no other debt service on this Project. Table 2. Financial Summary of Project Total Proiect Cost $904,000 Project Construction Cost $904,000 CWCS Post-construction Loan Amount $458,074 Annual Loan Pavment Amount $21,885 Annual Loan Obligation (including debt reserve funding) $29,180 Annual Project Cost per acre-foot (based on 869 acre-It) $33.58/ac-1t Creditworthiness: The Company was incorporated in January of 2004 for the purpose of undertaking the Project and therefore has very little financial history. The Company has no existing debt. Repayment will be accomplished by member assessments according to the Company's Funding Agreement. Table 3 shows the Financial Ratios for the Company. The Company proposes to assess the six members equal amounts of $4,947/member for the first three years to cover the CWCS Loan and maintenance costs (estimated at $500) and $3,731/member alter three years.