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<br />COVERAGE CER~IFICATE
<br />
<br />In connection with the proposed issuance by the City of
<br />Fort Morgan, Colorado, Water Works and Distribution Enterprise (the
<br />"Enterprise") of its Water Reven\1e Bonds, Series 1997, dated
<br />December 16, 1997, in the aggregate principal amount of $31,000,000
<br />(the "Bonds"), the undersigned hereby certifies that:
<br />
<br />1. All capitalized terms herein not otherwise defined
<br />have the meanings provided in Exhibit F to the Loan Agreement,
<br />dated as of April 1, 1994, between the Enterprise and the Colorado
<br />water Resources and Power Development Authority.
<br />
<br />2. Attached as Exhibit A hereto is the water rate
<br />schedule for the city of Fort Morga.n, Colorado (the "City"), that
<br />will become effective on January 1, 1998, which has been finally
<br />approved by the city Council of the city.
<br />
<br />3. Attached as Exhibit~ Band C hereto are the water
<br />rate schedules for the City that a~e proposed to become effective
<br />on January 1, 1999, and January 1, 2000, respectively, which have
<br />been preliminarily approved by the City Council of the City subject
<br />to change.
<br />
<br />4. Assuming that the water rate schedules set forth in
<br />Exhibit C had been in effect for a period commencing October 1,
<br />1996, and ending on September 30, 1997 (12 consecutive months out
<br />of the 18 months preceding Decemb~r, 1997), the revenues of the
<br />System (exclusive of connection fees) after paying the expenses of
<br />operating and maintaining the System during such period and the
<br />projected increased expenses of operating and maintaining the
<br />System in the year 2000, would have been $2,477,537, which is
<br />greater than $2,368,007, the maxi~um annual debt service of all
<br />outstanding obligations of the Enterprise or the city having a lien
<br />on the Pledged Property on a parity with or senior to the lien
<br />thereon of the Loan Contract and P~omissory Note, dated August 7,
<br />1995, between the Colorado Water Conservation Board and the City
<br />and the Enterprise, the Governmental Agency Bond, the Bonds and the
<br />Reimbursement Agreement, dated December 16, 1997, between State
<br />Street Bank and Trust Company and the Enterprise (assuming for this
<br />purpose that the Bonds bear interest at the fixed rate of 4.50%,
<br />the maximum interest rate under the Rate Cap Agreement, dated
<br />December 16, 1997, between Morgan Guaranty Trust Company of New
<br />York and the Enterprise), the gove~nmental agency bond proposed to
<br />be issued to the Colorado Water Resources and Power Development
<br />Authority, the loan contract and promissory note proposed to be
<br />eXecuted and delivered to the Colorado Water Conservation Board and
<br />the water revenue bond proposed to be issued to the United States
<br />of America - Rural Development (assuming for this purpose that said
<br />proposed obligations are issued o~ executed and delivered on the
<br />
<br />Attachment B to Loan Contract Amendment NO.1
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