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/ . . . Sheek Ditch Company May 16, 2005 Page 3 of 4 Agenda item 15b expected to be completed by August 2005. Construction is expected to begin October 2005 and be completed in 2005 and 2006. Financial Analysis Table 1 shows a summary of the funding sources for the project. The total estimated cost of the project is $427,200. The construction part of the Project will be partially funded by NRCS (75% level) after the Project is completed, Therefore, the initial loan amount (during construction) is $427,200, based on 100% of the estimated total Project cost. The loan will be reduced to $160,200 after the Project is complete and the Company receives funds for 75 percent of the construction costs ($267,000) from NRCS. Table 1. Project Funding Sources Funding Source Grant Loan Initial LoanPhase NRCS Construction Cost Share - ' - ewcs Loan - $427,200 ComDanv - - Total 1$427,200) $ $427,200 Post-Construction Loan Phase NRCS Construction Cost Share $267,000' - CWCS Loan $160,200 Company - - Total 1$427,200) $267,000 ' $160,200 . Received after construction is complete from NRCS Salinity Control Funds. Table 2 shows a summary of the financial aspects of the Project. A CWCS Loan of $160,200 will have an annual payment of $10,200 ($7,650 for the annual loan payment and $2,550 for the reserve account during the first three years - see loan conditions below) under the loan terms of 2.50% per annum for 3D-years. The annual loan payment represents a loan cost of ,$5. 73 per acre-foot for the Project based on an average annual delivery of 1,781 acre-feet of water. Since all other funding for the Project is in the form ofNRCS grants, the Company would have no other debt service on this Project. TlIble 2. Financial Summary of Project - - -- - - . n. - -, Total Proiect Cost , $427,200 Project Construction Cost $356,000 CWCS Post-construction Loan Amount $160,200 Annual Loan Pavment Amount $7,650 Annual Loan Obligation (including debt reserve funding) $10,200 Annual Project Cost per acre-foot (based on 1,781 acre-ft) $5.73/ac-ft Creditworthiness: The Company was incorporated in January 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.