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( Castle Pines North Metro District November 21, 1995 Page 3 Under a 1984 perpetual lease agreement, the District has the exclusive right to 4,576 acre-feet of groundwater in five separate aquifers underlying the lands of the District. The three existing Arapahoe wells operate under a decree for up to 1,724 acre-feet per year from as many as six potential wells in the Arapahoe aquifer. In addition, a decreed augmentation plan is in place which allows the District to use renewable sources of water from Plum Creek and Happy Canyon Creek. Financial Plan The District is requesting $301,500 in long-term (I5-year) fmancing for the project from the Construction Fund. In addition, the District is intending to fund the project with a $150,000 Energy and Mineral Impact Assistance Fund grant from the Department of Local Affairs and from it's own funds as summarized below: District Funds $114,391 Department of Local Affairs Grant 150,000 Construction Fund Loan 301.500 Total $565,891 The difference between the above $565,891 in funding and the estimated project cost of $561,123 is estimated interest during construction on the CWCB loan. The Board's participation would amount to approximately 54 percent of the project cost. The District's financial consultant, George K. Baum & Company, has prepared revenue and expenditure projections for the District's Water and Sewer Funds over the 15-year period of CWCB debt retirement (see Attachment A). The projections indicl;lte positive net revenues for the Water and Sewer Funds over the next 15 years with a substantial debt service coverage ratio for the Construction Fund loan payments. See a further discussion of revenue projections under FINANCIAL CONDITION, below. BANKRUPTCY PLAN In November 1993, the CPNMD filed for Chapter 9 bankruptcy after abandonment by the initial developers. A bankruptcy plan was approved by the United States Bankruptcy Court in June 1994. Under the plan, the District has issued 40-year exchange bonds (I994 bonds) to holders of the District's 1986 bonds which were in default. The total principal amount of the 1994 bonds is $45,480,500.