BOARD01428

• Board Meeting Date: 11/19/2001
• Description: CF Section - Amity Mutual Irrigation Company
• Board Meetings - Doc Type: Memo

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Amity Mutuai Irrigation Co.
November 19-20, 2001

Agenda Item 22d.

Table 2 is a summary of the financial aspects of the project. A CWCB Loan of $360K would
have an annual payment of $21,531 (including the 10% reserve requirement) assuming the
loan terms of 3.5% for 30 years. This represents $0.40 per acre-foot, based on average annual
total diversions of 54,460 acre-feet.

Table 2. Financial Summary

Pro'ect Cost
Number of Shareholders
Number of Shares of Stock
CWCB Loan Amount
CWCB Loan Pa ment includes 10% reserve
Current Assessment er share
New Assessment er share
Annual Loan Cost er acre-foot Avera e diversions: 54,460 ac-ft.

$400,000
218
34,682
$336,000
$21,531
$14.00
$14.62
$0.40

Alternative financing sources: The Company actively sought alternative financing but was not
able find such. They requested a loan from their local bank (The Colorado East Bank and Trust
of Lamar) but the bank does not provide long-term fixed rate financing for agricultural projects.
The Bank was able to commit to provide financing during construction, if needed, and to
provide financing of the Company's 10% cost share at typical bank terms.

Credit worthiness: The AMIC has two existing loans with the Colorado East Bank and Trust (a
revolving credit account and a short-term loan.) Payments have been made as agreed, and
both loans are scheduled for payoff in spring 2002, prior to the time of contracting for the
CWCB loan. The revolving credit account has traditionally been used instead of cash reserves
to operate during times before assessments are required to be paid and will continue to be
used for that purpose. Table 3 shows the Financial Ratios for the AMIC and indicates that, with
the exception of cash reserves, average to strong ability to repay the $360K CWCB loan with
the project in place. The financial evaluation assumes the Company levies a one-time
assessment to cover its 10% cost share on the project.

Table 3. Financial Ratios

Financial Ratio Without With
the oro/ect the oro/ect
Operating Ratio (revenue/expense) 114% 113%
weak: less than 100% (average) (average)
average: 100% - 120%
strona: areater than 120%
Debit Service Coverage Ratio 313% 410%
(revenues-expenses)/debt service (strong) (strong)
weak: less than 100%
average: 100% - 125%
strona: areater than 125%
Cash Reserves to Current Expense 2% 2%
weak: less than 50% (weak) (weak)
average: 50% -100%
strong: greater than 100%
Annual Cost per Acre-Foot (54,460 ac-ft) $ 9.53 $10.29
weak: greater than $20 (strong) (average)
average: $10 - $20
strano: Jess than $10 .

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