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<br />Date <br />7/01/79 <br />7/01/80 <br />7/01/81 <br />7/01 /82 <br />7/01/83 <br />7/01 /84 <br /> <br />Amount of <br />Installment <br />$ 900,000 <br />25,000 <br />100,000 <br />-0- <br />50,000 <br />-0- <br />$1 , 075 , 000 <br /> <br />-4- <br /> <br />Compounded <br />Value at 1/1/85 <br /> <br />$1,436,283 <br />36,360 <br />133,824 <br />-0- <br />56,650 <br />-0- <br />$1 , 663,017 <br /> <br />The Escrow Account, beginning in 1985, will be used to fund the shortfalls as follows: <br />Yr. Ending Beginning Balance Deficit Funded 8t% Interest Ending Balance Cost to <br />Dec. 31 January 1 By Escrow On Average December 31 Taxpayers <br /> Escrow Account Account Balance Escrow Account <br />1985 1,663,017 (656,000) 113,476 1,120,493 0 <br />1986 1,120,493 (525,000) 72 ,929 668,422 0 <br />1987 668,422 (386,000) 40,410 322,832 0 <br />1988 322,832 (238,000) 17,326 102,158 0 <br />1989 102,158 ( 78, 000) 5,368 29,526 0 <br /> <br />(After 1989 there will be no more deficits to be funded.) <br /> <br />Under this method, the Escrow Account will pay for the yearly shortfalls with no adverse <br />effect on the taxpayers, and show an ending balance of $29,526. <br /> <br />2. "Ramped Capitalized Interest" Concept: <br />This method was proposed by Mr. Stach and Mr. Craigie. Very simply, an <br />additional $2 million of bonds would be sold. The money would be used to pay <br />for the deficits which might occur during the first five years of the project, <br />and the debt will be paid out of future year's earnings when the project is <br />profitable. <br /> <br />The result of this method is no deficits in the early years and slightly reduced <br />benefits in later years. Mr. Stach and Mr. Craigie state that this method has <br />been used frequently and has not presented any problems with the rating service <br />agency or with institutional investors. <br /> <br />Continued. . . <br />