BOARD MANAGEMENT AND PLANNING COMMITTEE AGENDA MONDAY, SEPTEMBER 8, :00 PM - 4:00 PM COUNTY COMMISSION CHAMBERS

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1 BOARD MANAGEMENT AND PLANNING COMMITTEE AGENDA MONDAY, SEPTEMBER 8, :00 PM - 4:00 PM COUNTY COMMISSION CHAMBERS 1. TROPICAL STORM FAY UPDATE PRESENTER: John Wilson, Public Safety Roland Ottolini, Natural Resources Ann Arnall, Human Services John Yarbrough, Parks and Recreation Scott Gilbertson, Department of Transportation TIME REQUIRED: 10 Minutes 2. UPDATE ON IMPACT FEES ROAD, SCHOOLS AND PARKS PRESENTER: Mary Gibbs, Community Development REQUIRED: 5 Minutes TIME 3. NORTH FORT MYERS UTILITIES VALUATION AND WATERWAY ESTATES WASTEWATER TREATMENT PLANT ALTERNATIVES PRESENTER: Doug Meurer, Utilities TIME REQUIRED: 30 Minutes BOARD COMMENTS/DISCUSSION ADJOURN The Management & Planning Meeting is carried live on the following cable channel: Comcast Cable Channel 11

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6 VALUATION ANALYSIS of the NORTH FORT MYERS UTILITY, INC. WATER AND WASTEWATER SYSTEM on behalf of LEE COUNTY AND NORTH FORT MYERS UTILITY INC. Draft September 5, 2008 Public Resources Management Group, Inc. Utility, Rate, Financial and Management Consultants

7 Public Resources Management Group, Inc. Utility, Rate, Financial and Management Consultants September 5, 2008 Draft Mr. Doug Meurer, P.E. Mr. Tony Reeves Utilities Director Director Lee County Utilities North Fort Myers Utility, Inc Monroe St Bayshore Road Fort Myers, FL Fort Myers, FL Subject: Estimate of Value of the North Fort Myers Utility, Inc. (NFMU) Gentlemen: Public Resources Management Group, Inc. (PRMG) is pleased to submit this report to the Lee County Public Works Utilities Division (LCU) of Lee County, Florida (the "County") and the management of North Fort Myers Utility, Inc. ("NFMU" and collectively with the County, the "Parties") regarding our financial evaluation of the water and wastewater utility facilities of the North Fort Myers Utility, Inc. water and wastewater utility system (the "NFMU System"). The purpose of this report was to determine a reasonable cost of acquisition of the NFMU System in order to assist the County with its evaluation regarding the potential purchase of the assets and corresponding service area (i.e., the business) of the NFMU System. This report did not incorporate any aspects of the County's Waterway Estates' wastewater service area as part of the valuation analysis as it is a separate and distinct transaction of the County which should be analyzed exclusive from the NFMU valuation. The NFMU System is currently owned by The Old Bridge Park Corporation (the Parent Corporation ) and provides water and wastewater service pursuant to a certificate approved by the Florida Public Service Commission (the "FPSC") in accordance with Florida Statutes, Chapter 367. The NFMU System includes water production and treatment facilities, wastewater treatment and disposal facilities, water distribution and wastewater collection lines, and other appurtenances. As of May, 2008 the NFMU System served approximately 1,855 water and 13,710 wastewater customers comprised primarily of residential and retail commercial customers. The NFMU System has a larger wastewater system customer base due to the fact that the County currently serves a large portion of the NFMU certificated service territory potable water service. The County provides NFMU with the monthly water billing information for these customers in order for NFMU to bill for wastewater treatment and disposal service which it provides. PRMG is a financial consulting firm which has evaluated the value of a number of private utility assets sales to municipal or governmental entities and has been retained by the Parties to provide a reasonable acquisition value of the NFMU System. PRMG utilized the income approach K:\ \NFMU Valuation Report Draft 3.doc 341 NORTH MAITLAND AVENUE - SUITE MAITLAND, FL TEL (407) FAX (407) PRMG@PRMGINC.COM

8 Mr. Doug Meurer, P.E. Lee County Utilities Mr. Tony Reeves North Fort Myers Utility, Inc. September 5, 2008 Page 2 Draft method of valuation which is a common and accepted method for evaluating transactions similar to the transfer of the NFMU System facilities. The income approach is a method which is based on the present value of the net cash flow of the particular business or entity being evaluated. In addition to the income approach, PRMG also prepared a comparable sales analysis regarding the potential acquisition of the NFMU System by the County. Although the comparable sales analysis should not be considered as a determination of value for the NFMU System, it does provide a "reasonableness" check of the acquisition price. Finally, since it is expected that the County would issue utility revenue bonds which would be pledged for repayment primarily from the net revenues of the acquired NFMU system, a debt capacity evaluation was also conducted. The evaluation was performed to assist the County with the development/structuring of a financing program and to identify potential issues that could exist relative to the financing of the transaction. In the development of the estimated present value based on the net cash flow of the NFMU System, several different revenue scenarios were considered which were based on the scope of services agreed by the Parties. The scenarios essentially focused on the rates to be charged for monthly utility service and included: i) the current NFMU rates; ii) the projected rates if NFMU were to file for a general rate increase before the Florida Public Service Commission; and iii) the current County rates. The Parties requested these three scenarios to aid in the evaluation and purchase negotiations of the NFMU System. Based on the assumptions and analyses documented in the attached report, which should be read in its entirety, PRMG has estimated the present value of the net cash flow anticipated to be derived from the acquired NFMU as follows with respect to the rate scenarios: Income Approach - Estimated Future Cash Flow: County Rates [1] County Rates w/connection Charges [1] Estimated Amount $60.4 million $80.1 million Existing NFMU Rates [2] Existing NFMU Rates w/main Extension Charges [2] Adjusted NFMU Rates [3] Adjusted NFMU Rates w/main Extension Charges [3] [1] Amount shown derived from Table 9. [2] Amount shown derived from Table 10. [3] Amount shown derived from Table 11. $42.9 million $51.0 million $75.0 million $82.5 million The comparable sales approach considered the weighted average cost per net investment (assets) and equivalent residential connection (service area) for approximately 39 utility transactions that PRMG was able to compile information on such transaction. Based on the weighted average cost paid by the purchaser and recognizing the growth of the NFMU System, the following implied purchased price was estimated: K:\ \NFMU Valuation Report Draft 3.doc

9 Mr. Doug Meurer, P.E. Lee County Utilities Mr. Tony Reeves North Fort Myers Utility, Inc. September 5, 2008 Page 3 Draft Comparable Sales Current Condition Net Investment Basis [1] ERU Basis [2] Comparable Sales Future Condition Net Investment Basis [3] ERU Basis [4] [1] Amount shown derived from Table 16. [2] Amount shown derived from Table 15. [3] Amount shown derived from Table 20. [4] Amount shown derived from Table 19. Estimated Amount $56.5 Million $37.6 Million $55.4 Million $73.7 Million The net present value of the estimated cash flow of the NFMU System does not recognize any capital synergies that may accrue to the benefit of the County as a result of the acquisition. Specifically, if the County were to avoid any capital expenditures as a result of the acquisition of the NFMU assets, then the potential for additional value or benefit could possibly be recognized as a component of the transaction. For the purposes of this analysis presented herein, no additional capital synergies, if any, were recognized. Additionally, the analysis does not recognize any financing issues that could affect the ability of the County to finance the acquisition. To the extent that restrictions or constraints are placed on the County as part of the financing (e.g. compliance with a rate covenant requirement, issues regarding system growth and building capability, etc.) then the amount that would be paid for the system would be affected. We appreciate the opportunity to assist both the County and NFMU management with the financial evaluation and acquisition of the facilities that comprise the North Fort Myers Utility, Inc. System. Very truly yours, Public Resources Management Group, Inc. Robert J. Ori President Julian J. Burgiel Associate Attachments RJO/skc K:\ \NFMU Valuation Report Draft 3.doc

10 LEE COUNTY, FLORIDA NORTH FORT MYERS UTILITY, INC. NORTH FORT MYERS UTILITY SYSTEM VALUATION ANALYSIS TABLE OF CONTENTS Title Page No. Introduction... 1 Utility Facilities to be Acquired... 2 Valuation Methodology... 2 Rates and Charges... 4 NFMU and Lee County Water and Wastewater Rates... 4 Main Extension Charges (System Connection Charges)... 8 Customer Forecast... 9 Other Considerations Income Approach Assumptions and Analysis Estimate of Net Present Value Income Approach Debt Capacity Approach Comparable Sales Analysis K:\ \NFMU Valuation Report Draft 3.doc i

11 Table No. Title Income Approach Tables LEE COUNTY, FLORIDA NORTH FORT MYERS UTILITY, INC. NORTH FORT MYERS UTILITY SYSTEM VALUATION ANALYSIS LIST OF TABLES (*) 1 Summary of Historical and Projected Customer Statistics Water System 2 Summary of Historical and Projected Customer Statistics Wastewater System 3 Customer Growth Projection Above Calendar Year 2007 Levels 4 Estimation of Adjusted Fiscal Year 2007 Operating Expenses Utility System 5 Projection of Operating Expenses Utility System 6 Projection of Other Operating Expenses Utility System Escalation References 7 Projection of Other Operating Revenues Lee County Rates 7a Projection of Other Operating Revenues NFMU Rates 8 Estimate of Capital Expenditures and Funding Needs Utility System 9 Summary of Net Present Value of Utility System Cash Flow Lee County Rates 10 Summary of Net Present Value of Utility System Cash Flow NFMU Rates 11 Summary of Net Present Value of Utility System Cash Flow Increased NFMU Rates Debt Capacity Tables 12 Estimate of Preliminary Utility Acquisition Value Debt Capacity Approach / Lee County Rates Comparable Sales Approach Tables Existing Customer Levels 13 Summary of Transactions and Development of Time Adjusted Purchase Prices 14 Allocation of Adjusted Purchase Price Between Water and Wastewater Systems 15 Development of Implied Purchase Price Per ERU Basis - Current Service Levels 16 Development of Implied Purchase Price Per Net Investment Basis Current Service Levels Comparable Sales Approach Tables Assumed Build Out Levels 17 Summary of Transactions and Development of Time Adjusted Purchase Prices 18 Allocation of Adjusted Purchase Price Between Water and Wastewater Systems 19 Development of Implied Purchase Price Per ERU Basis Build Out Service Levels 20 Development of Implied Purchase Price Per Net Investment Basis Build Out Service Levels (*) All Tables Are Located at the End of This Report K:\ \NFMU Valuation Report Draft 3.doc ii

12 LEE COUNTY, FLORIDA NORTH FORT MYERS UTILITY, INC. NORTH FORT MYERS UTILITY SYSTEM VALUATION ANALYSIS INTRODUCTION The North Fort Myers Utility, Inc. (NFMU) water and wastewater utility system (the NFMU System ) is a privately owned and operated utility system providing utility service in the northwestern portion of Lee County. The NFMU System is currently owned by The Old Bridge Park Corporation (the Parent Corporation ) and provides water and wastewater service pursuant to a certificate approved by the Florida Public Service Commission (the "FPSC") in accordance with Florida Statutes, Chapter 367. The NFMU System includes water production and treatment facilities, wastewater treatment and disposal facilities, water distribution and wastewater collection lines, and other appurtenances. As of May, 2008 the NFMU System served approximately 1,855 water and 13,710 wastewater customers comprised primarily of residential and retail commercial customers. The NFMU System has a larger wastewater system customer base due to the fact that the County currently serves a large portion of the NFMU certificated service territory with potable water service. The County provides NFMU with the monthly water billing information for these customers in order for NFMU to bill for wastewater treatment and disposal service which it provides. Representatives of NFMU and the County have entered into negotiations to determine the estimated value of the NFMU System and the formulation of a purchase price suitable to both parties. As a result of the offer from NFMU to sell the utility and recognizing the goals and objectives of the County as it relates to the consolidation of wastewater and wastewater facilities and providing service on a regionalized basis that promotes economies of scale and long-range planning of utility service, the Lee County Utilities Division (LCU) and the management of NFMU requested that Public Resources Management Group, Inc. (PRMG) perform a financial evaluation of the NFMU System. PRMG was not responsible for any engineering evaluation of the NFMU System; such evaluation was done separately and is independent of the financial evaluation presented herein. However, to the extent required, PRMG did rely on certain engineering information provided by the Consulting Engineers retained for the NFMU valuation by both parties in the preparation of the analysis reflected in this report. This report only focuses on the evaluation of the NFMU System and does not incorporate the County system operations which are separate and distinct and do not have any impact on the determination of the net present value of the cash flow and debt capacity derived from NFMU System operations. Recently, it has come to the County's attention that its Waterway Estates' wastewater treatment facility would be required to be upgraded and expanded in order to meet the service area needs of the customer base within the part of the County where this regional wastewater facility currently operates. The County is in the process of studying various alternatives in lieu of upgrading and expanding the Waterway Estates wastewater treatment facility with one of its options being to acquire the NFMU System and interconnect to NFMU's existing Del Prado Wastewater Treatment Facility. This report does not reflect any operating or K:\ \NFMU Valuation Report Draft 3.doc -1-

13 Draft capital synergies that may exist due to the interconnect of the County s and NFMU s wastewater systems and the ultimate decision of providing wastewater treatment service by the County is a separate business decision which was beyond the scope of this study. The remainder of this report presents our analysis and findings associated with the financial analysis of the NFMU System anticipated to be acquired by the County. UTILITY FACILITIES TO BE ACQUIRED The utility facilities that comprise the NFMU System to be acquired by the County include the following: NFMU System Assets (*) Water System Wastewater System Land and Land Rights $4,054 Land and Land Rights $670,835 Structures and Improvements 58,694 Structures and Improvements 4,395,948 Wells and Springs 18,213 Collection Sewers Force 12,696,931 Supply Mains 960 Special Collecting Structures 452,716 Pumping Equipment 4,442 Collection Sewers Gravity 5,172,617 Water Treatment Equipment 50,895 Services to Customers 1,029,981 Hydrants 72,646 Receiving Wells 2,363,703 Transmission & Distribution Mains 534,516 Pumping Equipment 1,053,151 Services, Meters and Meter Installation 86,233 Reuse Distribution System 2,751,815 Treatment and Disposal Equipment 4,539,461 Subtotal $826,599 Subtotal $35,127,158 Construction Work in Progress 0 4,339,805 Total Water System $826,599 $39,466,963 (*) Amounts shown represent net investment as of December 31, 2007, as reported by NFMU, and are expressed in 2007 dollars and do not include intangible or general plant or the value of any records, as-built drawings, easements and right-of-ways or similar items, or adjustments to the net investment due to changes in fair market value, which could be substantial. All of the to-be-acquired NFMU System facilities reported by the NFMU management and the consulting engineers retained to perform the Replacement Cost New Less Depreciation (referred to as the Replacement Cost New less Depreciation or "RCNLD" method) Valuation Analysis are said to be in fair to good condition with some immediate improvements recommended to be performed to wastewater system and pump lift stations. As such, the existing System facilities, with continued maintenance are expected by the two parties to be sufficient to provide continued utility services within the NFMU service territory and thus, promote the continuation of the revenues assumed for the purposes of the preparation of this report. VALUATION METHODOLOGY There are three (3) general valuation approaches used to determine the value of assets and service areas. These three approaches include the: i) cost approach; ii) comparable sales approach; and iii) income approach. Generally, the parties to the transaction would consider all three methods in the determination of the overall price to be paid for the utility since the methods generally tend to support each other (assets are required to generate revenues for benefit of seller, with both the assets and revenue stream being evaluated and considered in terms of establishing a value). Issues such as plant condition and remaining service lives, existing capacity and ability K:\ \NFMU Valuation Report Draft 3.doc -2-

14 Draft for the system to expand and grow, rates and the net revenues available to be generated by the assets, availability of the receipt of cash contributions-in-aid-of-construction, and other factors are considered between the evaluation methods for the determination of value. The replacement cost approach values the property based on what it would cost the owner to replace the assets with like kind facilities. This evaluation focuses on the assets in service with the value being equal to the current installed cost of the facilities less an allowance for depreciation (to determine remaining service live) in order to develop the fair market value. Generally, this method requires an engineering evaluation as to condition, remaining service lives, regulatory compliance, and other factors. This analysis was performed independently by the two parties' consulting engineers and is not included in this report. Furthermore, although PRMG relied upon certain components of the engineering analysis, such analysis was considered as being an independent review of the NFMU System and was not considered in the evaluation reflected in this report. The comparable sales approach compares the specifics of previous or recent like-kind transactions with the current transaction to develop a price relationship. Although numerous utility transactions have taken place over the last several years, the potential of having a like-kind transaction similar to the NFMU System purchase by the County is somewhat difficult to identify due to differences in type of service area, facilities in service, asset age, operational synergies that may exist and strategic initiatives of the purchase. In many instances a comparable sales analysis provides a general reasonableness check as to the evaluation since it recognizes the sales of other utilities and an analysis was included in this report for informational purposes and to assist the Parties with the evaluation of the System. Less emphasis is placed on this analysis because of the difficulty in identifying like-kind transactions. The income approach focuses on the net cash flow derived from the operation of the assets to be purchased with the assumption that the value would equal the present value of such net cash proceeds (benefits) being derived from the assets being acquired and the operation of the NFMU System facilities. This analysis focuses solely on the financial aspects of the System and complements the replacement cost approach. Specifically under this approach, the value to the seller would be the net present value of the cash flow anticipated to be derived from the operations, which would include asset replacement and maintenance in order to preserve the generation of the revenues and financial benefits of the NFMU System. In addition and in order to assist the two parties in the evaluation of the NFMU System and recognizing that the County will need to finance the transaction with external funds (debt), a dept capacity analysis was also prepared. Although not considered as a direct valuation analysis, the debt capacity approach focuses on the ability of the utility to be purchased to support itself financially as a result of the buyer assuming a liability in the form of annual debt service payments to finance the purchase of the system. It serves as a check to the buyer that its existing rate payers will not be materially impacted in the form of rate increases from the purchase taking place. In our experience with respect to the valuation of utility systems, the income approach supported by the debt capacity analysis are often a method used in determining the value of a utility system and is a reasonable method for valuing the NFMU System. K:\ \NFMU Valuation Report Draft 3.doc -3-

15 Draft The scope of our analysis which was necessary to complete the valuation using the income approach included the following activities: 1. Evaluation of the service area water and wastewater usage and growth characteristics and the corresponding revenues to be derived from monthly rates or user charges, including contribution charges. 2. Identify the cost of operation of the NFMU System facilities, recognizing an allowance for the cost of asset replacement and betterment required to allow the assets to reach or exceed their useful life. 3. Identify the capital funding of the NFMU System which would require resources to finance. 4. Determine the net cash flow of the NFMU System facilities for all existing and anticipated customers to determine the estimated present value of such net cash flow. RATES AND CHARGES NFMU and Lee County Water and Wastewater Rates In the development of the income approach analysis as outlined later in this report, two (2) schedules of rates for monthly water and wastewater service were utilized in the derivation of sales revenues for the thirty (30) year projection period. The current rate schedules of the County and NFMU have been utilized in order to identify the present value of the future cash flows of the NFMU System under each specific rate application. The rates for water and wastewater service as reflected in the NFMU rate tariff were filed with and approved by the Florida Public Service Commission (FPSC), the regulatory jurisdiction having authority regarding rates for service of the NFMU System. Subsequent to the acquisition of the NFMU System by the County, the FPSC will no longer have regulatory jurisdiction over the rate levels and structure of the NFMU System. Such regulatory requirements will be the responsibility of the Lee County Board of County Commissioners. The current NFMU rates were implemented on May 28, 2007 (pursuant to a price index and pass-through rate adjustment) and are differentiated into two (2) distinct service areas; the Pine Lakes/Lake Fairway service area and the NFMU service area. The Pine Lakes/Lake Fairways service territory is a relatively small portion of NFMU's total certificated service area and is served both potable water and wastewater service by NFMU whereby the NFMU service area receives wastewater-only service from NFMU with the County providing all retail potable water service. The rates for Pine Lakes and Lake Fairway water service areas currently in effect include: i) monthly service charge (readiness-to-serve charge) which varies by meter size which also serves as the minimum bill; and ii) a volumetric flow charge based on metered water consumption which is uniform for all metered consumption (applicable to all customer classes). The current rates for wastewater service in both service areas are similar in structure to that of the water system and include: i) a monthly service charge (readiness-to-serve charge) which varies by meter size that also serves as the minimum bill; ii) a volumetric flow charge based on K:\ \NFMU Valuation Report Draft 3.doc -4-

16 Draft metered water consumption which serves as the basis for wastewater use; and iii) a maximum residential billing threshold (to recognize that water use for irrigation and other purposes is not returned to the wastewater system) of 6,000 gallons per month per unit billed for customers located within the Pine Lakes/Lake Fairways service territory and 10,000 gallons per month per unit for the billing of the volumetric flow charge for the residential class of customer within the NFMU service territory. The following is a summary of the current monthly NFMU System rates for service as delineated in the utility's Rate Tariff as approved by the FPSC: Monthly Pine Lakes and Lake Fairways System Water and Wastewater Rate Schedule [1] Water System: Wastewater System: Monthly Service Charge: Monthly Service Charge: Residential Service Residential Service Meter Size 5/8 x 3/4" $6.81 Meter Size 5/8 x 3/4" $9.90 Full 3/4" Full 3/4" " " /2" /2" " " 9.90 General Service (Commercial, Master Metered and Irrigation Service) General Service (Commercial and Master Metered) Meter Size 5/8 x 3/4" $6.81 Meter Size 5/8 x 3/4" $9.90 Full 3/4" Full 3/4" " " /2" /2" " " " " " " " " Consumption Charge (per 1,000 gallons of metered water) Consumption Charge (per 1,000 gallons of metered water) Residential Service Residential Service [2] $4.58 All Consumption $4.01 General Service 4.58 General Service All Consumption 4.01 (Remainder of page intentionally left blank) K:\ \NFMU Valuation Report Draft 3.doc -5-

17 Draft Monthly NFMU (Proper) System Wastewater Rate Schedule [1] Monthly Service Charge: Residential Rates All Meter Sizes $11.62 Commercial Rates Full 3/4" $ " /2" " " " " Consumption Charge (per 1,000 gallons of metered wastewater) Residential Service All Consumption [3] $4.22 General Service All Consumption 4.22 [1] Reflects current rates as approved by the Florida Public Service Commission on behalf of NFMU. [2] For all individually metered residential units, the consumption charge shall not apply to monthly usage (metered water sales) in excess of 6,000 gallons. [3] For all individually metered residential units, the consumption charge shall not apply to monthly usage (metered water sales) in excess of 10,000 gallons. With respect to the County, the existing rates for monthly water and wastewater service were adopted pursuant to Resolution No approved by the Lee County Board of County Commissioners on August 14, 2007 and became effective for bills rendered on and after October 1, The existing monthly County rates for water and wastewater service include: i) a monthly administrative fee applied to each account billed regardless of the number of dwelling units served; ii) for residential service, a monthly service charge based on the number of dwelling units served which varies based on the type of residential property; iii) for commercial and nonresidential service, a monthly service charge which varies by meter size; iv) a volumetric or usage charge which increases in cost based on water use (i.e., an inclining block rate) to promote water conservation which is based on metering to each users premise; and v) for the wastewater system, a monthly maximum billing threshold of 9,000 gallons of metered water consumption. (Remainder of page intentionally left blank) K:\ \NFMU Valuation Report Draft 3.doc -6-

18 Draft The following is a summary of the existing County rates for water and wastewater service: Customer Classification Water Service: Administrative Fee Summary of Monthly County Water and Wastewater Rates Monthly Service Charge $2.82 per bill rendered Usage Charge per Unit (Per 1,000 gallons) Rates by Customer Class: Residential Services: Single-Family $7.78 per unit 0-6,000 $2.84 6,001-12, ,001-18, ,001 and above 5.43 Multi-Family $6.21 per unit 0-4,800 $2.84 4,801-9, ,601-14, ,401 and above 5.43 Recreational Vehicle Unit/Lot $3.14 per unit 0-2,400 $2.84 2,401-4, ,801-7, ,201 and above 5.43 Commercial and Non-Residential: Meter Size 5/8 $7.78 For Each ERU 3/ ,000 $ ,001-12, / ,001-18, ,001 and above Non-Irrigation Class Per 1,000 $ , Irrigation Class 1-6,000 $3.49 6,001-12, ,001 and above 5.43 ERU = Equivalent Residential Unit and is defined as the equivalent usage requirements of a single-family residential customer. Since commercial or multi-family customers can be served by larger sized meters than the standard residential customer, it is more useful to present such customers on a basis equivalent to the residential class. K:\ \NFMU Valuation Report Draft 3.doc -7-

19 Draft Summary of Monthly County Water and Wastewater Rates (cont'd) Customer Classification Monthly Service Charge Usage Charge per Unit (Per 1,000 gallons) Wastewater Service: Administrative Fee $4.05 per bill rendered Rates By Customer Class: Residential Services: Single-Family [1] $12.57 per unit $4.59 per 1,000 gallons metered consumption; $20.68 for unmetered service Multi-Family [1] $10.08 per unit $4.59 per 1,000 gallons metered consumption; $16.55 for unmetered service Recreational Vehicle Unit/Lot $5.10 per unit $4.59 per 1,000 gallons metered consumption; $8.28 for unmetered service Commercial and All Non- Residential: Meter Size 5/8 $12.57 $4.59 per 1,000 gallons metered consumption 3/ / , , [1] No wastewater user charge shall be imposed on metered water usage above nine-thousand (9,000) gallons per residential service dwelling unit. Main Extension Charges (System Connection Charges) In addition to the monthly rates for water and wastewater, NFMU and the County also charge a Main Extension or System Connection Charge based upon an equitable and proportionate share of the cost for: i) water production and transmission facilities; and ii) wastewater transmission, treatment and effluent disposal capacity. The purposes of the Main Extension/Connection Charges are for paying or reimbursing the equitable share of the capital costs relating to the construction, expansion, or equipping of excess or unused capacity of the Systems in order to serve new users. The following table summarizes the water and wastewater system connection charges for both the NFMU and County System: Connection Charges (*) County System NFMU Water - $ per ERU $2, $ Wastewater - $ per ERU 2, (*) Residential charges applied on a per ERU basis; all other retail customers requesting capacity based on the demand (gallons) required. K:\ \NFMU Valuation Report Draft 3.doc -8-

20 Draft CUSTOMER FORECAST In order to determine the amount of revenues to be derived from monthly water and wastewater user charges, it was necessary to develop a forecast of customers or accounts served by class and corresponding water sales and billed wastewater flow. The forecast was based on a trend analysis of customers served and average water use and wastewater billed as shown on Table 1 for the water system and Table 2 for the wastewater system. The analysis included a review of the last two (2) calendar year's accounts and corresponding flow characteristics and an estimate of the current calendar year statistics (the reporting period for the NFMU System are the twelve months ended December 31). The current year estimate of accounts and usage was based on i) actual statistics for the four (4) months ended April 2008 as provided by NFMU management; ii) an estimate of the customers and sales for the remainder of the year predicated on a review of monthly usage statistics for similar periods over the last two (2) years and assumptions regarding growth of the NFMU System based on discussions with the Parties; and iii) a review of historical customer usage requirements. The following is a summary of the historical average water customers served by the NFMU System and the corresponding water sales over the past three years: NFMU Water System [1] Fiscal Year Ended December 31 (Historical) Average Annual Water Accounts Water Sales (000s of gallons) Average Monthly Water Use per Account ,853 63,266 2, ,855 62,053 2, (est.) [2] 1,855 62,053 2,788 Average Annual Historical Growth Rate 0.05% 0.09% [1] Amounts shown derived from Table 1. [2] Amounts shown based on four (4) months actual and eight (8) months estimated customer billing data; assumes lower water use per account recognizing continued conservation effects on the service area. As can be seen above, the water service area has experienced essentially no growth in customers served and water use; the NFMU management reports that this component of the NFMU service area is relatively built-out with limited ability to provide service to new development. Unlike the water system, the NFMU wastewater system service area, which is significantly larger than that of the NFMU water system, has experienced significant levels of growth over the recent historical period. (Remainder of page intentionally left blank) K:\ \NFMU Valuation Report Draft 3.doc -9-

21 Draft The following is a summary of the trends in average customers or accounts served and billed wastewater flow for the corresponding period for the wastewater system: NFMU Wastewater System (*) Fiscal Year Ended December 31 (Historical) Average Annual Wastewater Accounts Wastewater Flow Billed (000s of gallons) Average Monthly Wastewater Flow Billed per Account , ,827 3, , ,773 3, (est.) 14, ,857 3,295 Average Annual Historical Growth Rate 8.5% 0.8% (*) Amounts shown derived from Table 2; wastewater billed flow (sales) is based on metered water use and the average monthly use per customer has remained relatively constant over the last two calendar years due to the application of a maximum billing threshold on residential use which reduces effects of changes in irrigation flow on billed sales. As can be seen above, historical average wastewater billed per customer is higher than average monthly water use per customer. This may be attributed to the wastewater-only customers of the NFMU service area receiving potable water service from the County which generally results in lower bills for customers using between 3,500 and 10,000 gallons per month which is representative of average indoor (sewer) use, with such customers having a lower cost of service (price elasticity). Also, average use per customer has remained level over the recent historical period. This could be attributed to reduced water usage due to conservation efforts which would, in turn, result in lower wastewater revenue gallons being billed to customers. With respect to the forecast of water and wastewater customers and respective water use/billed wastewater flow, discussions with NFMU management have indicated that the residential dwelling units to be served within the existing service territory will increase significantly for the wastewater system over the course of the projection period. Additionally, the service area does provide for increased customer growth associated with commercial development. As stated previously, the water system service area served by NFMU is essentially built-out, therefore, all anticipated customer growth is projected to occur within the wastewater service area. (Remainder of page intentionally left blank) K:\ \NFMU Valuation Report Draft 3.doc -10-

22 Draft Based on information provided by NFMU management, a significant amount of residential growth is anticipated to occur over the next several years, the following is a listing of potential development and the estimated number of equivalent residential connections (ERUs) associated with each development. Residential Development [1] Development Available ERUs Service Provided T.W. Magnolia Landing [2] 1,662 Wastewater Only Stoneybrook N Metro [2] 1,342 Wastewater Only Oak Creek [2] 775 Wastewater Only Tara Woods Phase A,B, & C [2] 137 Wastewater Only GFY Enclaves of Eagle Nest [2] 229 Wastewater Only Estates at Entrada [2] 1,313 Wastewater Only Athyrid Development Diplomat Rd [2] 475 Wastewater Only Fountain Bridge Preserve [2] 74 Wastewater Only Pine Prairie Preserve [2] 1 Wastewater Only Northrop Project E Bayshore [2] 47 Wastewater Only Yeatter Henderson Brook Rd [2] 71 Wastewater Only Paradise Development Group [2] 80 Wastewater Only Palermo [2] 1,150 Wastewater Only Sloanes Gate 365 Wastewater Only Laurel Rd 10AC MFD 122 Wastewater Only Bayshore Road 65AC 356 Wastewater Only Chapel Creek 891 Wastewater Only Stone Hill Manor 71 Wastewater Only Julia Park 14 Wastewater Only Slater Bend 97 Wastewater Only N Trail Ventures 655 Wastewater Only Nalle Grade 130 Project 584 Wastewater Only Bayshore Cove E I Wastewater Only Tamiami Pines 30 Wastewater Only Park 41 Commons 1,193 Wastewater Only North River Village [3] 1,582 Wastewater Only Bayshore Crossings 264 Wastewater Only Buccaneer MHC Addition 192 Wastewater Only Bay Point Condos 162 Wastewater Only Pioneer Village 334 Wastewater Only Coon Rd Phase II 46 Wastewater Only Existing Projects MHC 160 Wastewater Only New Projects 3,400 Wastewater Only Total Estimated ERUs 17,998 [1] Based on development information as provided by NFMU management. [2] These developments have entered Developer Agreements with NFMU and have or are contracted to remit connection charges for the purpose of capacity reservation. [3] Due to potential land use issues, it was assumed that this development would accommodate 60% of identified potential housing units to be constructed in this subdivision as originally provided by NFMU. K:\ \NFMU Valuation Report Draft 3.doc -11-

23 Draft As can be seen above, there is a significant amount of potential growth within the NFMU wastewater service territory. Customer connection rates for these developments were provided to PRMG by NFMU management, and based on discussions with the two parties, current trends being experienced in the service area, and to reflect a conservative evaluation since customer growth will not be secured (guaranteed) by the seller, the customer growth rates were subsequently dampened to reflect more reasonable growth trends. The projection of customer growth rates for the developments identified above to follow are illustrated on Table 3 at the end of this report. In addition to the residential customer growth assumption, NFMU management has also identified additional growth for the general service (commercial) class during the forecast period. The following table summarizes the anticipated growth that may occur during the next several years for this class of service: General Service (Commercial) Development [1] Development Available ERUs Services Provided US-41 Comm Next to Walgreens [2] 33 Wastewater Only LCEC New Office Site [2] 12 Wastewater Only Racetrac Bayshore Road I-75 [2] 7 Wastewater Only Littleton Center Commercial [2] 116 Wastewater Only Diplomat Center Commercial [2] 70 Wastewater Only Bayshore Samville Roads Commercial [2] 93 Wastewater Only Rainbow Motel [2] 21 Wastewater Only Commercial New [2] 825 Wastewater Only Upriver Campground [2] 132 Wastewater Only Bayshore Commons Comm Park 49 Wastewater Only CC Hospital Site 55 Wastewater Only Bayshore Road Station Center 6 Wastewater Only Bayshore Village Market Square 64 Wastewater Only Raymond Lumber 15 Wastewater Only Bayshore Self Storage 5 Wastewater Only Bayshore Convenience Store 2 Wastewater Only Total Estimated ERUs 1,505 [1] Based on development information as provided by NFMU management. [2] These developments have entered Developer Agreements with NFMU and have or are contracted to remit connection charges for the purpose of capacity reservations. With respect to water customer growth water sales, we assumed that the average monthly sales (use) per account for the forecast period would be held constant with what is currently being experienced for the current year 2008 since the water system service area, as stated earlier in this report, is essentially built-out. K:\ \NFMU Valuation Report Draft 3.doc -12-

24 Draft The first five years of customer forecast for the water system recognized in the development of the valuation analysis for the water system is summarized below: NFMU Water System [1] Fiscal Year Ending September 30 [Projected] Average Annual Water Accounts Water Sales (000s of gallons) Average Monthly Water Use per Account 2008 (estimated) 1,855 62,053 2, ,855 62,053 2, ,855 62,053 2, ,855 62,053 2, ,855 62,053 2, ,855 62,053 2,788 Average Annual Projected Growth Rate [2] 0.00% 0.00% [1] Amounts shown derived from Table 1, which shows both the water customers and corresponding water sales. [2] Compound growth rate based on change in water statistics from 2008 through With respect to the wastewater system, the following table summarizes the first five years of the customer forecast recognized in the development of the valuation analysis using the income approach as discussed later in this report: NFMU Wastewater System [1] Fiscal Year Ending September 30 (Projected) Average Annual Wastewater Accounts Billed Wastewater Flow (000s of gallons) Average Monthly Wastewater Billed per Account 2008 (estimated) 14, ,857 3, , ,532 3, , ,215 3, , ,838 3, , ,253 3, , ,053 3,299 Average Annual Projected Growth Rate [2] 5.31% 4.72% [1] Amounts shown derived from Tables 2 and 3 at the end of this report, which shows both the wastewater customers and corresponding billed wastewater flows. Average annual wastewater accounts include both residential and commercial service. [2] Compound growth rate based on change in wastewater statistics from 2008 through NFMU also provides wholesale wastewater service to the City of Cape Coral to allow the City with the ability to provide retail wastewater service by the City within its corporate city limits. The City and NFMU have entered into an Agreement Establishing Procedures for Use of a Wastewater Interconnect on December 15, 2003 (the Interconnect Agreement ) with subsequent amendments whereby NFMU will provide wastewater treatment capacity for use by the City of up to approximately 0.76 MGD. The term of the Interconnect Agreement is for twenty (20) years. Currently, NFMU provides approximately 0.26 million gallons per day (mgd) of wholesale wastewater service but the Interconnect Agreement with the City allows NFMU to serve approximately 5,718 additional ERUs within the Entrada (1,818 ERUs), Judd Creek (900 ERUs) and Zemel (3,000 ERUs) developments located within the City. K:\ \NFMU Valuation Report Draft 3.doc -13-

25 Draft Based on an estimation of projected connection rates as outlined in Table 3 at the end of this report, the following sales projections for service to the City were assumed as follows: Fiscal Year Ending September 30 [Projected] Cumulative ERU Growth Bulk Sales (000s) , , , , ,145 50,558 Average Annual Projected Growth Rate 49.54% 26.44% Other Considerations With respect to the development of the net revenues derived from NFMU System operations, a critical assumption that may have an impact on the estimated net present value of the cash flow deals with the customer forecast. To the extent that the forecast is too high in the early portion of the forecast or analytical period, the higher the net present value of the cash flow. As shown above, the financial forecast assumes a significant amount of customer growth during the next five years; with such forecast being provided by NFMU management and being considered as reasonable by the owners of NFMU. One option to limit the risk to the County would be to have NFMU guarantee the connections from an economic standpoint, whether such connections actually occur. The two parties could adopt a guaranteed revenue structure whereby the revenues that should be generated from the new connections to the extent such connections do not occur would materialize for the benefit of the County and that the risk of receiving the estimated cash flow as identified in this report is reduced. Another option would be to enter into a "futures" based transaction which would provide payment to the owners as connections occur over time (e.g. payment of connection fees received). Any guarantee, futures payment, or forward looking funding plan must be formally agreed to by the Parties and should be accomplished prior to the closing of the transaction by the Parties. INCOME APPROACH ASSUMPTIONS AND ANALYSIS Tables 1 through 11 for the NFMU System located at the end of this report document our analysis of the income approach for the determination of the present values of the net cash flows associated with the operation of the NFMU System facilities operated by the County. In the development of the financial evaluation, three (3) different scenarios were considered. The three scenarios were based on the rates that may be charged for monthly utility service. The three scenarios included the following rate options: i) County Existing Rates ii) NFMU Existing Rates iii) NFMU Proposed Rates K:\ \NFMU Valuation Report Draft 3.doc -14-

26 Draft These three scenarios were considered to devise a recognized value for the System and to assist the Parties in the development of a potential purchase price. With respect to the scenario, this was considered as an alternative to the scenarios assuming maintenance of existing NFMU rates. NFMU management reports that the utility operations are not earning a reasonable rate of return (based on information reported in the 2007 Annual Report filed by NFMU management to the FPSC) and that an adjustment in rates is probable (will ultimately depend on the findings of the FPSC). NFMU management has estimated this potential increase in rates at approximately 0.31% system-wide above the current rates for utility service. The development of the income approach analyses to determine the net present values of the NFMU System operations required a number assumptions and analyses. The following is a summary of the specific and assumptions used in this report which we consider to be reasonable. 1. The sales revenues for the evaluation predicated on NFMU System rates was based on the existing monthly water and wastewater user fees currently in effect as approved by the FPSC and the customer forecast as outlined earlier in this report. For purposes of this analysis, it has been assumed that no indexing of monthly user charges of the NFMU System for inflationary allowances would be recognized. As previously mentioned, the management of NFMU anticipates that there exists the ability to adjust rates before the FPSC. Specifically, NFMU management has calculated a possible rate adjustment to recover a fair rate of return rate base of 0.41%. Recognizing that a potential rate adjustment may be available to NFMU (although must be approved by the FPSC), an additional evaluation assuming increased rates from an approved rate adjustment was prepared. The revenues were based on the existing NFMU rates adjusted uniformly by 39.5% and 21.9% for the Pine Lakes Fairway water and wastewater systems, respectively and 29.6% for the NFMU wastewater service area coupled with the customer forecast, as discussed earlier in this report. With respect to the projection of water and wastewater sales revenues when performing the scenario analysis utilizing County rates, projected sales revenues have been based on the schedule of rates and charges adopted by the County on August 14, 2007 pursuant to Rate Resolution No Such rates were applied to the customer and sales forecast discussed earlier in this report. As was the case with the income approach analysis utilizing existing NFMU rates, no indexing of County rates for inflationary allowances has been recognized. A summary of the forecasted water and wastewater system revenues are included on Tables 9 through 11 at the end of this report (Income Approach Analysis Summary tables) for the analyses performed under County and NFMU existing and adjusted rates and charges, respectively. 2. The basis for the determination of the operating expenses applicable to the NFMU System was predicated on operating and maintenance reported by NFMU management for the Calendar Year 2007 as contained in the 2007 Annual Report submitted to the FPSC. Additionally, NFMU management provided PRMG a General Ledger for the K:\ \NFMU Valuation Report Draft 3.doc -15-

27 Draft NFMU System that provided further detail of the operating expenses and other financial information which was relied upon for the establishment of the Test Year (2007) operating expenses. The estimated operating expenses for the Test Year 2007 are included on Table 4 at the end of this report. 3. Since the transaction is a private to public sale, our experience has been in recognizing the operations of the utility under public ownership. In order to recognize the income approach analysis of the system assuming County operations, it was necessary to make adjustments to the NFMU Test Year 2007 operating expenses to reflect changes in operation assuming public ownership of the facilities by the County. The adjustments to the reported NFMU 2007 operating results are detailed on Table 4 at the end of this report and summarized below: a. A reduction in salary expense was made to reflect estimated labor-related costs under existing operating conditions to be incurred by the County to operate the NFMU System. Specifically, the labor-related costs associated with the administrative function and the management function (officers, stockholders, and directors of NFMU) whose functions are assumed to be absorbed by the existing County staff have not been recognized. A summary of such adjustments to Test Year 2007 operating expenses is as follows: Salary Reduction Amount Salaries / Wages - Employees $78,479 Salaries / Wages Officers, Directors and Stockholders 152,332 Total $230,811 b. Reductions to specific contracted services expenses were made to the Test Year 2007 operating results to remove certain costs that would be absorbed by existing County staff as part of the day-to-day business of operating the County utility on a consolidated system. Such costs are associated with the accounting and engineering functions along with contracted management services. A summary of these specific expenditure reductions is as follows: Contractual Services Contracted Services Cost Reductions Engineering $ 91,665 Accounting 152,332 Management Fees 26,495 Total $180,003 c. An adjustment was made to recognize a reduction in the cost of contract management of the NFMU System. Currently, NFMU has entered into the K:\ \NFMU Valuation Report Draft 3.doc -16-

28 Draft Operations and Maintenance Agreement ("O&M Agreement") with Woodard and Curran to operate and maintain the NFMU System. It has been assumed that coincident with the transfer of utility system ownership, the County will assume operational control of the utility replacing contracted staff and system operations with County personnel. For purposes of this analysis, it has been assumed that current contracted costs for the operation and maintenance of utility plant is incurred by the NFMU System would be similar to those incurred by the County with the exception of contracted administrative and customer service costs which are assumed to be absorbed by existing County personnel. These specific costs, amounting to approximately $56,500 annually, were not included in the development of the 2007 Test Year operating expenses. d. An adjustment has been recognized to the rental of building/real property expense item associated with the rent of office space by NFMU to house the utility's customer service center. Based on discussions with County staff, the customer service function will be incorporated into existing County customer service facilities and, therefore, this expenditure will no longer be incurred under public ownership. e. A portion of the insurance and miscellaneous expense costs have been removed to recognize certain administrative costs such as bank fees, NFMU bond service costs and other specific overhead related costs will not be incurred by the utility under County ownership and operations. These adjusted costs amount to approximately $516,638 annually and are summarized as follows: Adjusted Costs Insurance Other: Administrative Expenses $53,676 Miscellaneous Expenses Customer Service Expenses 54,281 Administrative Expenses 307,265 Other General Expenses 56,166 Total $516,638 f. Regulatory commission expense associated with the amortization of rate case expenses and other associated costs attributable to the regulation by the FPSC was adjusted from the analysis since the utility subsequent to acquisition by the County will not be regulated by the FPSC and will not be subject to such costs. g. An allowance for bad debt expenses was assumed in the analysis and for purposes of this report was estimated to be approximately 0.15% of the System's Test Year sales revenues which is generally consistent with the bad debt expenses of the County and Florida utilities in general. K:\ \NFMU Valuation Report Draft 3.doc -17-

29 Draft h. A contingency allowance of 2.5% of total operating expenses was recognized for the utility system for the Test Year. The allowance has been included in order to provide additional funds to meet unknown or unplanned expenditures throughout the year and to recognize potential changes in revenues due to weather, conservation, and other factors. This allowance increases the operating expenses of the combined water and wastewater utility systems by approximately $85, Based on discussions with the County, we have recognized additional personnel during the forecast period that have been determined to be required to support maintaining adequate levels of service to the NFMU customer base within the NFMU service territory. The additional employees that are recognized in the development of the operating expense projections that are, according to County staff, required to be added to existing staffing levels, in addition to what is currently recognized, is as follows: Position Number of Personnel Fiscal Year Total Expense in Year of Addition Lift Station Technician $112,320 Instrumentation Technician , In order to provide incremental infrastructure maintenance to meet the level of service standards currently provided by the County in projected growth areas to be served by the County subsequent to the acquisition, incremental operating costs have been recognized coincident with the addition of personnel as identified in Assumption No. 4 above. These incremental costs have been incorporated into the analysis to account for system maintenance costs that would occur as service expands to previously undeveloped areas within the NFMU service territory. Based on current cost relationships incurred by the County to serve its existing customer base with respect to transmission and collection system maintenance, the following increases in operating costs associated with serving new growth have been incorporated in the analysis: Department Fiscal Year Recognized Amount Meter Services 2009 $ 33,726 Wastewater Collection ,461 Total $108, For purposes of this analysis and in order to take into account the projected growth anticipated to occur within the NFMU service territory during the forecast period, it has also been assumed that new lift station additions would be a utility plant asset required to serve new development. It has been projected that approximately twenty-seven (27) lift stations would be required through Fiscal Year 2014 (one lift station for each significant development or customer). Based on an analysis of average power costs per annum assumed for a local lift station, an annual cost of $745 per year per lift station was recognized. Based on an estimation of lift station addition rates, the following annual incremental purchased power costs were determined: K:\ \NFMU Valuation Report Draft 3.doc -18-

30 Draft Fiscal Year Additions Cumulative Annual Expense $5, , , , , ,141 Total In order to ensure adequate operations and maintenance of the existing deep well of the NFMU System, an allowance has been made to fund the need for performing periodical mechanical integrity tests which generally occur every five (5) years on the NFMU System deep well. For purposes of this analysis, an expenditure requirement of approximately $150,000 per occurrence has been recognized commencing in Fiscal Year 2011 with the test to be repeated every five (5) years. 8. An allowance was recognized in order to recover those costs associated with LCU allocable administrative and overhead which would normally be incurred by County Staff and management in the oversight of the day-to-day operations of the NFMU System once owned and operated by the County. For purposes of this analysis, it has been assumed that the allocation of administrative costs to be recognized as an operating expense of the NFMU System would be based on the current relationship of existing County budgeted administrative expenses incurred on a per customer basis applied to the customer base of the NFMU System. The annual allocation to NFMU administrative expense was determined as follows: Amount FY 2009 County Administrative Budget $568,009 Estimated County Water System Customers 76,405 Annual Expense per Account Estimated FY 2009 Customer Base 16,085 Estimated Annual Expense $119, With respect to the forecast of operating expenses, as identified on Table 5 at the end of this report, all NFMU System variable operating costs (i.e. purchased power, chemicals, sludge removal, etc.) for the water and wastewater system were based on the annual cost of the expense as identified in the 2007 Annual Report submitted to the FPSC by NFMU management and escalated for the forecast period based on the projection of flow requirements (growth) as discussed earlier in this report. Escalation factor references are outlined on Table 6 at the end of this report. All non-variable related operating costs were maintained at Test Year 2007 reported levels to provide a link to the monthly rates for service that were adjusted based, in part, on the 2007 operating expenses. Any K:\ \NFMU Valuation Report Draft 3.doc -19-

31 Draft increase in operating costs due to inflation would be assumed to be offset by a like-kind increase in rate revenue (to maintain the same revenue margins). The analysis attempts to recognize only those expenses that would change due to growth (which has a corresponding increase in revenue) or time due to asset age. 10. A contingency allowance of 2.50% of annual operating expenses was recognized annually for each year of the forecast period in order to provide sufficient funds to meet any unknown or unplanned expenditures throughout each year and to recognize potential changes in sales revenues due to weather, water conservation or other factors. 11. An annual allowance for bad debt expense has been recognized each year subsequent to the Test Year as a revenue requirement of the NFMU System to recognize that a certain amount of revenues will be considered as uncollectible and written off throughout the year. This expenditure item was projected based on trends incurred by utilities statewide. A bad debt ratio estimated at 0.15% of sales revenues was subsequently applied to the level of sales revenues projected for the forecast period to estimate the amount of expense to recognize. 12. NFMU currently provides reclaimed water service to several developments and golf courses located within the City of Cape Coral (the "City"). Based on information provided by NFMU, the utility has entered into individual agreements with each respective development to provide reclaimed water service for periods of up to thirty (30) years. For the current year, it is estimated that the City will on behalf of the various reclaimed water customers purchase approximately 0.28 mgd of reclaimed water, which under existing rates generates approximately $25,290 annually. The amount of reclaimed water sales is projected to increase as the City continues to develop. There are two developments, or properties, referenced as Entrada and Zemel properties, which projected by NFMU management to add approximately 4,818 ERUs as reclaimed customers during the course of the projection period with the potential of an additional 500 ERUs connecting within the existing NFMU service territory over the same forecast period (a total of 1.68 mgd in addition to reclaimed water sales). For purposes of this analysis and as outlined on Table 7 at the end of this report, it has been assumed that these properties will continue to develop and customers will connect to the reclaimed water system uniformly over a twenty-five (25) year period. In addition to anticipated reclaimed water service within the City of Cape Coral, recognition of potential reclaimed water revenues to entities within the NFMU service area currently receiving reclaimed water service has also been reflected in this analysis. Specifically, and based on information provided by NFMU, several golf courses and commercial farming interests currently receive an estimated 1.5 mgd of reclaimed water annually from NFMU. Taking into account the County currently bills such entities for the provision of like-kind service, it has been assumed for this analysis that the County would serve these same customers at the current billing rate of $0.25 per thousand gallons of reclaimed water purchased. Under this assumption, reclaimed water revenues for this analysis are estimated to increase approximately $102,375 annually. K:\ \NFMU Valuation Report Draft 3.doc -20-

32 Draft 13. As discussed previously, NFMU currently provides bulk or wholesale wastewater treatment and disposal services to the City of Cape Coral. NFMU and the City originally entered into the Agreement Establishing Procedures for Use of a Wastewater Interconnect (the "Interconnect Agreement") on December 15, 2003 with subsequent amendments allowing the City to transmit up to 0.76 mgd of wastewater to NFMU for treatment and disposal. As of Calendar Year 2007, NFMU had treated on average approximately mgd for the City of Cape Coral generating approximately $42,284 in sales revenues. Based on information provided by NFMU, it has subsequently amended the Interconnect Agreement to provide up to 0.76 mgd of wastewater treatment capacity in anticipation of the development of the properties referred to as the Entrada, Judd Creek and Zemel. As was the case with the projection of customer growth for reclaimed water service and as illustrated on Table 7 at the end of this report, it has been assumed that these units will become wholesale customers of the NFMU System and connect uniformly over a twenty (20) year period. 14. Included in the financial projections for the NFMU system are other operating revenues associated with service initiation and septic truck disposal services. The projection of the other operating revenues is summarized on Table 7 under County rates and Table 7A under existing NFMU rates at the end of this report. For purposes of this report, the receipt of septic truck disposal revenues currently being collected for disposal of raw wastewater delivered at NFMU facilities has been discontinued for the purpose of revenue projections due to County policy of not accepting such deliveries at its wastewater treatment facilities. Therefore, this revenue source has been removed for purposes of determining the income approach system value. With respect to projection of service initiation sales revenues, revenue projections were based on the current service initiation rate of $15.00 per occurrence under the NFMU rate valuation approach and $45.00 per occurrence under the County rate valuation approach coupled with turn-on/turn-off levels being consistent with current rates of occurrence. 15. In addition to the operating expenses, the County will annually conduct capital improvements to the NFMU System facilities to maintain the usefulness and service lives of the acquired utility plant assets. The capital expenditures recognized in the analysis included two primary components which are i) general plant; and ii) an allowance for renewals, replacements and betterments. A summary of the capital expenditures assumed for the analysis is shown on Table 8 at the end of this report. The following is a discussion of the three expenditure components: a. Based on a review of the Annual Report, the assets to be acquired include general plant. General plant would include short-lived assets such as vehicles, equipment, and furniture/fixtures/computers. For the purposes of this analysis, an allowance for the continued replacement of general plant was recognized in the analysis for the NFMU System. The amounts were based on i) the fixed asset list contained in the 2007 Annual Report as submitted to the FPSC for the NFMU System, adjusted K:\ \NFMU Valuation Report Draft 3.doc -21-

33 Draft for inflationary allowances on such original cost; and ii) an assumed asset service life (replacement) of 8 years based on the estimated composite depreciation lives for such plant. As shown on Table 8 at the end of this report, an allowance of approximately $75,000 annually for the analytical period for the ongoing replacement of general plant assets were assumed. b. In addition to the ongoing replacement of general plant, the County also must perform improvements to allow the NFMU System facilities to reach their useful life. Examples of such improvements (which ultimately depends on the capitalization policies of the County) recognized by the County could include, but not be limited to, the following: i) improvements to water and wastewater treatment facilities, ii) upgrades of lift station pumps and control panels; iii) replacement of water and irrigation meters; iv) upgrade of wastewater manholes; v) repair of water, irrigation, and/or wastewater transmission or distribution/collection system lines; and vi) hydrant replacement. With respect to the development of the net present value analysis, it was assumed that the County would annually deposit monies into its Renewal and Replacement Fund (a fund created by the Bond Resolution) to provide for the funding of future capital improvements and asset replacement needs. The Bond Resolution requires that the County establish a Renewal and Replacement Fund for its utility system. Since the purchase of the NFMU System may be financed by the issuance of bonds under the Bond Resolution, PRMG has recognized the funding of the Renewal and Replacement Fund in the analysis. Pursuant to the Bond Resolution, the County must fund (minimum allowance) an amount equal to 5% of the Gross Revenues received during previous fiscal year (the "Renewal and Replacement Fund Requirement"). It was assumed that the County would initially fund annually an amount equal to the Renewal and Replacement Fund Requirement, regardless if the amount on deposit in such fund was at least equal to such requirement. Additionally, as a result of asset age, an increase in the funding of the deposit to the Renewal and Replacement Fund was recognized since the analysis did not recognize any capital improvement funding (asset replacement or betterment) above the deposits to the Fund. The deposit to the Renewal and Replacement Fund expressed as a percentage of Gross Revenue assumed in the analysis was increased from the 5.0% level at a rate of 0.05% annually commencing in Year 2013 through the remainder of the thirty (30) year projection period. 16. As stated earlier in this report, one of the valuation methodologies involved in utility analysis by the Parties involved the replacement coast approach which for purposes of this valuation process was performed by the Parties' Consulting Engineers. As part of this analysis, the Consulting Engineers were tasked with identifying water and wastewater facility system improvements that would be required to be performed to bring any utility plant facilities to a proper functioning capability. Typically, the costs of such needed improvements, once identified, are recognized as an expenditure which must be funded from the cash flow of the System and which, therefore, serves as an offset to the net present value determination. Based on information as provided by the Consulting K:\ \NFMU Valuation Report Draft 3.doc -22-

34 Draft Engineers, approximately $1,138,750 in primarily pump station improvements were identified and recognized as an immediate capital expenditure from system operations. In addition to the pump station deficiency deductions, the issue associated with the capacity of the Del Prado wastewater treatment plant being fully utilized during the course of the projection period and its link to the seller receiving future main extension charge/collection fees as growth occurs during the forecast period has been addressed. For purposes of this analysis, it has been estimated based on connection rate projections outlined on Table 3 at the end of this report that the Del Prado facility will realize full capacity utilization in Fiscal Year 2021 and that a wastewater facility expansion will be recognized in order to serve projected growth past this time period where capacity utilization is projected to be exceeded. Based on information provided by the Consulting Engineers, the cost to expand the Del Prado facility by 4.0 mgd will cost approximately $22,500,000 in 2008 dollars with approximately 10% of the total estimated cost being recognized in Fiscal Year 2016 for design related activities with the balance recognized recognized in Fiscal Year 2021 for expansion-related construction. This improvement was also recognized as a capital deduction from the valuation estimates. The recognition of this expansion will allow growth to continue and the ability to recognize the continued benefit of main extension charge/connection fee receipts through the remainder of the projection period due to sufficient wastewater capacity being available over the forecast period. 17. As of December 31, 2007, the NFMU System has outstanding $29,375,000 principal amount of Lee County Industrial Development Revenue Bonds as summarized below: Outstanding as of December 31, 2007 (*) Outstanding NFMU System Bonds: Lee County Industrial Development Bonds, Series 2003 (the "Series 2003 Bonds") $9,755,000 Lee County Industrial Development Revenue Bonds, Series 2005 ("Series 2005 Bonds") 14,520,000 Lee County Industrial Development Revenue Bonds, Series 2006 ("Series 2006 Bonds") 5,100,000 Total Outstanding NFMU System Bonds (the "Lee County Industrial Development Revenue Bonds") $29,375,000 (*) Source 2007 Annual Report submitted by NFMU management to the Florida Public Service Commission. The analysis did not recognize the payment of the Lee County Industrial Development Bonds since this is a current obligation of the NFMU System and it is assumed these debt obligations will be defeased at the time of the NFMU System transfer with acquisition proceeds received by the Seller. K:\ \NFMU Valuation Report Draft 3.doc -23-

35 Draft 18. In order to estimate the net present value of the future cash flow of the NFMU System, it is necessary to establish a discount factor. For the purposes of this analysis, the discount factor used in the development of the net present value of the future cash flow of the NFMU System operations was 5.0%. This discount rate is the estimated equivalent to the blended or average cost of capital (True Interest Cost) associated with the issuance of utility revenue bonds as discussed with the County and was assumed to represent the County's cost of capital for the transaction. Additionally, a thirty year analysis term was assumed consistent with the overall general useful life of the facilities and the term of any financing the Series 2008 Bonds which is anticipated by the County to be issued to acquire the additional NFMU System facilities. It should be noted that the discount rate of 5.0% is an estimate of the cost to borrow funds by the County. It is recommended by PRMG that the discount rate of 5.0% should be the minimum rate used to establish the estimated value of the NFMU System. To the extent the market dictates a higher cost to borrow funds, then the acquisition value should be adjusted downward proportionately to account for the higher cost of capital. Because of the need to establish a maximum price by the County, if the cost to borrow funds was less than the recognized 5.0% rate, then we would recommend that the County benefit from such reduced interest rate. 19. Included as another source of funds for the NFMU System is the receipt of main extension charges (also known as System Connection Charges) under both Lee County (Table 9) and NFMU rates (Tables 10 and 11) which are received from new connections requesting capacity from the NFMU System. The main extension/connection charges represent a source of funds derived from the ongoing development of the System and have been assumed a financial revenue for the determination of the net present value of such resources. It must be emphasized that the availability to receive main extension/connection charges is also dependent on having the necessary or available conveyance (transmission) capacity. Based on discussions with the Parties and their Consulting Engineers, no additional transmission lines to carry wastewater to the Del Prado treatment facilities were required to meet the service area needs of the NFMU System, nor were any existing transmission lines assumed to be undersized and needing an upgrade. This would assume that any transmission lines that may be required would need to be dedicated by the property/applicant requesting the wastewater capacity. As such, no additional capital expenditures for the extension of the wastewater transmission grid was assumed in the analysis presented in this report. For purposes of this analysis, it has been assumed that the system will continue to receive the main extension charges until the available capacity in the water and wastewater treatment plants are fully purchased by the new connections. ESTIMATE OF NET PRESENT VALUE INCOME APPROACH As shown on Table 9 at the end of this report for the NFMU System and based on the assumptions and analyses as discussed above and shown on the tables at the end of this report, PRMG estimates that the net present value of the cash flow derived from the operations of the NFMU System utilizing Lee County rates and charges in determining the net revenue stream is K:\ \NFMU Valuation Report Draft 3.doc -24-

36 Draft $60.4 million with the exclusion of main extension charges (i.e. connection fees) and $80.1 million with the inclusion of main extension/connection charges. With respect to the valuation utilizing existing NFMU rates and charges as the basis for determining the Utility's income stream value as shown on Table 10 at the end of this report, PRMG estimates that the net present value of the NFMU System is $42.9 million with the exclusion of main extension charges (i.e. connection fees) and $51.0 million with the inclusion of main extension/connection charges. Under NFMU adjusted rates as illustrated on Table 11 at the end of this report, the estimated net present value of the NFMU System is $75.0 million and $82.5 million with the inclusion of main extension/connection charges. DEBT CAPACITY APPROACH In the evaluation of the feasibility regarding the potential value the County should assign the NFMU System, a consideration which should be reviewed by the County deals with whether the acquired system can support itself in relation to the acquisition price paid by the County. In other words, it is beneficial to have an understanding of the debt bearing capacity of the system which relates the amount of revenue contribution that is available from the revenue stream to finance the acquisition by the County at a specific point in time. The primary issue regarding this analysis is that the existing customers of the utility system are not materially or negatively impacted from an occurance or a level of service (capacity availability) standpoint. In the development of the debt capacity analysis for the NFMU System, the determination of the debt capacity assumed: i) the current County rates for water and wastewater service; ii) NFMU actual Calendar Year 2007 operating results escalated, for inflationary allowances to reflect estimated 2008 operating levels; and iii) adjustments to the reported Calendar Year 2007 NFMU operating results to reflect NFMU System operations under County ownership. Table 12 at the end of this report details the debt capacity analysis of the NFMU System. The adjustments to reflect County operations were similar to those for the income approach analysis with the following exceptions: A Renewal and Replacement Fund transfer for the test year (2008) commencing at 5.0%% of gross system and increasing revenues to 5.4% in FY 2020 (assumed that NFMU service territory is essentially at a stage of build-out) was recognized as opposed to the ramped annual percent transfer as recognized in the income approach analysis. In the development of the debt capacity analysis, we have assumed a 15% coverage requirement in order to meet the minimum rate covenant requirements associated with the County's governing Bond Resolution. In the development of the debt capacity of the estimated net revenues of the utility, the assumptions used in the development of the principal amount of bonds included: i) a payment term of 30 years; ii) an average annual interest rate of 5.00%; iii) recognition of the funding of a surety in lieu of cash funding debt service reserve fund from the proceeds of such bonds; iv) no capitalized interest funded from bond proceeds; and v) issuance costs equal to 2.50% of the total principal amount of bonds assumed to be issued. K:\ \NFMU Valuation Report Draft 3.doc -25-

37 Draft The use of a conventional financing approach which assumes level debt service payments initiating with the issuance of the acquisition bonds. No analysis as to the use of alternative financing structures (e.g. ascending debt payments, subordinate debt, etc.) were recognized in the evaluation to more adequately match debt repayment schedule to the customer base anticipated to be served. In the development of the debt capacity analysis, no connection charge receipts were recognized since the County's bond resolution does not reflect such revenues in the determination of the net revenues for complying with the rate covenant as referenced in the Bond Resolution. It should be noted that such funds received would be used to: i) support the payment of a subordinate debt; or ii) paid to the seller as a "futures" payment, both of which would increase the overall estimated debt capacity of the NFMU System. Based on these significant assumptions, the debt capacity analysis of the NFMU System assuming County operations is approximately $42.7 million based on estimated operating conditions for the current year utilized (2008) under current conditions and potentially reaching $91.2 million under estimated build-out conditions (for purposes of this analysis assumed to occur in Fiscal Year 2020). The primary reason for the increase in the debt capacity is due to the growth of the System being recognized as providing an economic benefit (increased net revenues) and thus the ability to secure a higher level of debt. COMPARABLE SALES ANALYSIS In order to provide additional information to the County regarding the purchase of the NFMU System, PRMG has prepared a comparable sales analysis. The purpose of the comparative sales analysis is to develop an implied purchase price based on the net investment and service area characteristics of the NFMU system when compared to the other utility transactions reflected on the survey. This analysis is included on Tables 13 through 20 at the end of this report. Although the comparable sales analysis is not considered as a determination of value for the NFMU System, it does provide a "reasonableness" check of the purchase price based on the results of the other transactions. In the development of the comparable sales analysis, PRMG identified several transactions that either have occurred and closed during the last 10 years. In the preparation of this analysis, no attempt was made to determine the relative relationship to the NFMU System as being a similar system due to the overall complexity of determining "like kind" characteristics of the systems included in the comparable analysis. In the development of the implied purchase price assuming the comparative analysis, two different approaches were conducted. The first approach was an equivalent residential unit (ERU) based approach which corresponds more closely to the service area characteristics of the utility. The second approach focused on the net investment of the utility and identified the purchase price based on the net assets in service. These two approaches were performed under current conditions (i.e., utilizing current ERUs of system and plant investment figures as identified in the Calendar Year 2007 Annual Report). Since the service area has the ability to grow, a similar analysis was prepared assuming a build-out condition (this is considered appropriate since NFMU management has opined that the majority of the infrastructure is in service to support such growth. As can be seen below and based on the K:\ \NFMU Valuation Report Draft 3.doc -26-

38 Draft assumptions recognized in the analysis, the ERU based analyses under the present and at buildout scenarios approximate the net present value of the cash receipts presented on a "net to seller" basis. Current Conditions Build-Out Conditions Comparable Sales ERU Based Approach [1] $37,684,005 $73,744,921 Comparable Sales Net Investment Approach [2] 56,492,813 55,438,785 [3] [1] Amounts derived from Tables 15 and 19 for current and build-out conditions, respectively. [2] Amounts derived from Tables 16 and 20 for current and build-out conditions, respectively. [3] Amount shown does not include the capital cost for a plant expansion, (estimated at $22.5 million), which would need to be made to serve such growth. It should be noted that in the evaluation of the sales comparisons, no evaluation of the amount of debt outstanding for each utility was performed which would serve as a deduct to the amount of monies received by the respective seller of the utility. K:\ \NFMU Valuation Report Draft 3.doc -27-

39 TABLES

40 Table 1 Lee County, Florida NFMU Acquisition Analysis Page 1 of 3 Historical and Projected Customer Statistics Pine Lakes/Lake Fairways Water System [1] Line Historical [1] Estimated No. Description Residential 1 Customer Growth N/A N/A 0 2 Average Monthly Customers 1,838 1,840 1,840 1,840 1,840 1,840 1,840 1,840 1,840 1,840 1,840 1,840 3 Annual Revenue Flow (000s) 55,213 54,099 54,099 54,099 54,099 54,099 54,099 54,099 54,099 54,099 54,099 54,099 4 Avg. Monthly Flow Per Customer (000s) Commercial 5 Customer Growth N/A N/A 0 6 Average Monthly Customers Annual Revenue Flow (000s) 8,053 7,954 7,954 7,954 7,954 7,954 7,954 7,954 7,954 7,954 7,954 7,954 8 Avg. Monthly Flow Per Customer (000s) Total Wastewater System 9 Customer Growth N/A N/A 0 10 Customer Growth (%) N/A N/A 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 11 Average Monthly Customers/Units 1,853 1,855 1,855 1,855 1,855 1,855 1,855 1,855 1,855 1,855 1,855 1, Annual Revenue Flow (000s) 63,266 62,053 62,053 62,053 62,053 62,053 62,053 62,053 62,053 62,053 62,053 62, Avg. Monthly Flow Per Customer (000s) Footnotes: [1] Historical Fiscal Years 2006 and 2007 are based on actual billing data as provided by NFMU.

41 Table 1 Lee County, Florida NFMU Acquisition Analysis Page 2 of 3 Historical and Projected Customer Statistics Pine Lakes/Lake Fairways Water System [1] Line No. Description Fiscal Year Ended September 30, Residential 1 Customer Growth 2 Average Monthly Customers 3 Annual Revenue Flow (000s) 4 Avg. Monthly Flow Per Customer (000s) Commercial 5 Customer Growth 6 Average Monthly Customers 7 Annual Revenue Flow (000s) 8 Avg. Monthly Flow Per Customer (000s) Total Wastewater System 9 Customer Growth 10 Customer Growth (%) 11 Average Monthly Customers/Units 12 Annual Revenue Flow (000s) 13 Avg. Monthly Flow Per Customer (000s) ,840 1,840 1,840 1,840 1,840 1,840 1,840 1,840 1,840 1,840 1,840 1,840 54,099 54,099 54,099 54,099 54,099 54,099 54,099 54,099 54,099 54,099 54,099 54, ,954 7,954 7,954 7,954 7,954 7,954 7,954 7,954 7,954 7,954 7,954 7, % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 1,855 1,855 1,855 1,855 1,855 1,855 1,855 1,855 1,855 1,855 1,855 1,855 62,053 62,053 62,053 62,053 62,053 62,053 62,053 62,053 62,053 62,053 62,053 62, Footnotes: [1] Historical Fiscal Years 2006 and 2007 are based on actual billing data as provided by NFMU.

42 Table 1 Lee County, Florida NFMU Acquisition Analysis Page 3 of 3 Historical and Projected Customer Statistics Pine Lakes/Lake Fairways Water System [1] Line No. Description Residential 1 Customer Growth 2 Average Monthly Customers 3 Annual Revenue Flow (000s) 4 Avg. Monthly Flow Per Customer (000s) Commercial 5 Customer Growth 6 Average Monthly Customers 7 Annual Revenue Flow (000s) 8 Avg. Monthly Flow Per Customer (000s) Total Wastewater System 9 Customer Growth 10 Customer Growth (%) 11 Average Monthly Customers/Units 12 Annual Revenue Flow (000s) 13 Avg. Monthly Flow Per Customer (000s) ,840 1,840 1,840 1,840 1,840 1,840 1,840 1,840 54,099 54,099 54,099 54,099 54,099 54,099 54,099 54, ,954 7,954 7,954 7,954 7,954 7,954 7,954 7, % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 1,855 1,855 1,855 1,855 1,855 1,855 1,855 1,855 62,053 62,053 62,053 62,053 62,053 62,053 62,053 62, Footnotes: [1] Historical Fiscal Years 2006 and 2007 are based on actual billing data as provided by NFMU.

43 Table 2 Lee County, Florida North Fort Myers Utility Acquisition Page 1 of 3 Historical and Projected Customer Statistics - Wastewater System [1] Line Historical [1] No. Description [2] Residential 1 Customer Growth N/A Average Monthly Customers 7,781 8,486 9,251 9,518 9,955 10,527 11,186 12,141 13,065 13,983 14,942 15,863 16,784 17,663 18,497 3 Annual Revenue Flow (000s) 286, , , , , , , , , , , , , , ,917 4 Avg. Monthly Flow Per Customer (gallons) 3,067 2,676 2,676 2,676 2,676 2,676 2,676 2,676 2,676 2,676 2,676 2,676 2,676 2,676 2,676 Commercial 5 Customer Growth N/A Average Monthly Customers Annual Revenue Flow (000s) 79,855 74,607 84,555 96, , , , , , , , , , , ,229 8 Avg. Monthly Flow Per Customer (gallons) 27,282 21,815 21,815 21,815 21,815 21,815 21,815 21,815 21,815 21,815 21,815 21,815 21,815 21,815 21,815 Bulk 9 Customer Growth N/A Average Monthly Customers Annual Revenue Flow (000s) 32,753 30,710 30,710 30,710 30,710 30,710 30,710 30,710 30,710 30,710 30,710 30,710 30,710 30,710 30, Avg. Monthly Flow Per Customer (gallons) 2,729,417 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308 Mobile Homes 13 Customer Growth N/A (310) Average Monthly Customers/Units 4,347 4,036 4,085 4,095 4,105 4,105 4,105 4,105 4,105 4,105 4,105 4,105 4,105 4,105 4, Annual Revenue Flow (000s) 167, , , , , , , , , , , , , , , Avg. Monthly Flow Per Customer (gallons) 3,217 2,682 2,682 2,682 2,682 2,682 2,682 2,682 2,682 2,682 2,682 2,682 2,682 2,682 2,682 Recreational Vehicle 17 Customer Growth N/A 2, Average Monthly Customers Average Monthly Units 0 2,050 2,050 2,050 2,050 2,050 2,050 2,050 2,050 2,050 2,050 2,050 2,050 2,050 2, Annual Revenue Flow (000s) 0 31,277 31,276 31,276 31,276 31,276 31,276 31,276 31,276 31,276 31,276 31,276 31,276 31,276 31, Avg. Monthly Flow Per Customer (gallons) 0 1,271 1,271 1,271 1,271 1,271 1,271 1,271 1,271 1,271 1,271 1,271 1,271 1,271 1,271 Multi-Family 22 Customer Growth N/A Average Monthly Customers Average Monthly Units Annual Revenue Flow (000s) Avg. Monthly Flow Per Customer (gallons) 0 1,231 1,231 1,231 1,231 1,231 1,231 1,231 1,231 1,231 1,231 1,231 1,231 1,231 1,231 Total Wastewater System 27 Customer Growth N/A 2, , , Customer Growth (%) N/A 20.51% 5.71% 2.04% 2.95% 3.71% 4.09% 5.64% 5.12% 4.94% 4.81% 4.41% 4.23% 3.82% 3.49% 29 Average Monthly Customers 12,373 13,711 14,563 16,085 16,560 17,175 17,877 18,886 19,853 20,833 21,835 22,799 23,763 24,670 25,532 Average Monthly Units 30 Annual Revenue Flow (000s) 566, , , , , , , , , , , , , ,942 1,005, Avg. Monthly Flow Per Customer (gallons) 3,817,634 3,016,705 3,044,415 3,090,583 3,111,048 3,143,378 3,171,049 3,199,309 3,215,260 3,246,838 3,258,320 3,269,783 3,280,316 3,279,810 3,280,403 Footnotes: [1] Historical Fiscal Years 2006 and 2007 are based on information compiled from information provided by NFMU and the County. [2] Amounts shown are derived from four months actual and eight months projected customer billing information.

44 Table 2 Lee County, Florida North Fort Myers Utility Acquisition Page 2 of 3 Historical and Projected Customer Statistics - Wastewater System [1] Line No. Description Calender Year Ended December 31, Projected Residential 1 Customer Growth 2 Average Monthly Customers 3 Annual Revenue Flow (000s) 4 Avg. Monthly Flow Per Customer (gallons Commercial 5 Customer Growth 6 Average Monthly Customers 7 Annual Revenue Flow (000s) 8 Avg. Monthly Flow Per Customer (gallons ,263 20,029 20,710 21,342 21,974 22,606 23,195 23,646 24,031 24,291 24,551 24,811 25,071 25,331 25, , , , , , , , , , , , , , , ,538 2,676 2,676 2,676 2,676 2,676 2,676 2,676 2,676 2,676 2,676 2,676 2,676 2,676 2,676 2, ,022 1,050 1,078 1,106 1,134 1,162 1,190 1,218 1, , , , , , , , , , , , , , , ,176 21,815 21,815 21,815 21,815 21,815 21,815 21,815 21,815 21,815 21,815 21,815 21,815 21,815 21,815 21,815 Bulk 9 Customer Growth 10 Average Monthly Customers 11 Annual Revenue Flow (000s) 12 Avg. Monthly Flow Per Customer (gallons Mobile Homes ,710 30,710 30,710 30,710 30,710 30,710 30,710 30,710 30,710 30,710 30,710 30,710 30,710 30,710 30,710 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308 2,362, Customer Growth 14 Average Monthly Customers/Units 15 Annual Revenue Flow (000s) 16 Avg. Monthly Flow Per Customer (gallons ,105 4,105 4,105 4,105 4,105 4,105 4,105 4,105 4,105 4,105 4,105 4,105 4,105 4,105 4, , , , , , , , , , , , , , , ,149 2,682 2,682 2,682 2,682 2,682 2,682 2,682 2,682 2,682 2,682 2,682 2,682 2,682 2,682 2,682 Recreational Vehicle 17 Customer Growth 18 Average Monthly Customers 19 Average Monthly Units 20 Annual Revenue Flow (000s) 21 Avg. Monthly Flow Per Customer (gallons ,050 2,050 2,050 2,050 2,050 2,050 2,050 2,050 2,050 2,050 2,050 2,050 2,050 2,050 2,050 31,276 31,276 31,276 31,276 31,276 31,276 31,276 31,276 31,276 31,276 31,276 31,276 31,276 31,276 31,276 1,271 1,271 1,271 # 1,271 1,271 1,271 1,271 1,271 1,271 1,271 1,271 1,271 1,271 1,271 1,271 Multi-Family 22 Customer Growth 23 Average Monthly Customers 24 Average Monthly Units 25 Annual Revenue Flow (000s) 26 Avg. Monthly Flow Per Customer (gallons ,231 1,231 1,231 1,231 1,231 1,231 1,231 1,231 1,231 1,231 1,231 1,231 1,231 1,231 1,231 Total Wastewater System 27 Customer Growth 28 Customer Growth (%) 29 Average Monthly Customers Average Monthly Units 30 Annual Revenue Flow (000s) 31 Avg. Monthly Flow Per Customer (gallons Footnotes: % 3.02% 2.61% 2.37% 2.32% 2.26% 2.07% 1.57% 1.34% 0.92% 0.91% 0.90% 0.89% 0.89% 0.77% 26,326 27,120 27,829 28,489 29,149 29,809 30,426 30,905 31,318 31,606 31,894 32,182 32,470 32,758 33,010 1,036,975 1,068,900 1,098,095 1,125,718 1,153,340 1,180,962 1,207,204 1,229,015 1,248,706 1,264,384 1,280,062 1,295,740 1,311,418 1,327,096 1,341,618 3,282,521 3,284,516 3,288,262 3,292,881 3,297,292 3,301,507 3,306,429 3,313,994 3,322,688 3,333,748 3,344,609 3,355,275 3,365,752 3,376,044 3,386,932

45 Table 2 Lee County, Florida North Fort Myers Utility Acquisition Page 3 of 3 Historical and Projected Customer Statistics - Wastewater System [1] Line No. Description Residential 1 Customer Growth 2 Average Monthly Customers 3 Annual Revenue Flow (000s) 4 Avg. Monthly Flow Per Customer (gallons Commercial 5 Customer Growth 6 Average Monthly Customers 7 Annual Revenue Flow (000s) 8 Avg. Monthly Flow Per Customer (gallons ,731 25, , ,840 2,676 2, ,274 1, , ,836 21,815 21,815 Bulk 9 Customer Growth 10 Average Monthly Customers 11 Annual Revenue Flow (000s) 12 Avg. Monthly Flow Per Customer (gallons Mobile Homes ,710 30,710 2,362,308 2,362, Customer Growth 14 Average Monthly Customers/Units 15 Annual Revenue Flow (000s) 16 Avg. Monthly Flow Per Customer (gallons 0 0 4,105 4, , ,149 2,682 2,682 Recreational Vehicle 17 Customer Growth 18 Average Monthly Customers 19 Average Monthly Units 20 Annual Revenue Flow (000s) 21 Avg. Monthly Flow Per Customer (gallons ,050 2,050 31,276 31,276 1,271 1,271 Multi-Family 22 Customer Growth 23 Average Monthly Customers 24 Average Monthly Units 25 Annual Revenue Flow (000s) 26 Avg. Monthly Flow Per Customer (gallons ,231 # 1,231 Total Wastewater System 27 Customer Growth 28 Customer Growth (%) 29 Average Monthly Customers Average Monthly Units 30 Annual Revenue Flow (000s) 31 Avg. Monthly Flow Per Customer (gallons Footnotes: % 0.61% 33,214 33,418 1,354,599 1,367,580 3,398,699 3,410,322

46 Table 3 DRAFT Lee County, Florida Preliminary Financial Evaluation - North Fort Myers Utility Inc. Customer Growth Projections Above Calendar Year 2007 Levels Number of Obligation to Line Total ERCs Committed Net ERCs Years Growth Pay Connection No. Development Name Meter Size Available to Date Available Will Occur Over Start Year Charge Residential Projects Under Contract 1 T.W. Magnolia Landing 5/8 1, , N [1] Stoneybrook N - Metro 5/8 1, , N [1] Oak Creek 5/ N [1] Tara Woods Phase A,B, & C 5/ N [1] GFY Enclaves of Eagle Nest 5/ N [1] Estates at Entrada 5/8 1, , N [1] Athyrid Development - Diplomat Rd 5/ N [1] Fountain Bridge Preserve 5/ N [1] Pine Prairie Preserve 5/ N [1] Northop Project - E Bayshore 5/ N [1] Yeatter - Henderson - Brook Rd 5/ N [1] Paradise Development Group 5/ N [1] Palermo 5/8 1, , N [1] Total Under Contract 7, , # Proposed Projects 15 Sloanes Gate 5/ Y Laurel Rd - 10AC MFD 5/ Y Bayshore Road 65AC 5/ Y Chapel Creek 5/ Y Stone Hill Manor 5/ Y Julia Park 5/ Y Slater Bend 5/ Y N Trail Ventures 5/ Y Nalle Grade 130 Project 5/ Y Bayshore - Cove E-I 75 5/ Y Tamiami Pines 5/ Y Park 41 Commons 5/8 1, , Y North River Village 5/8 1, , Y Bayshore Crossings 5/ Y Buccaneer MHC Addition 5/ N Bay Point Condo's 5/ N Pioneer Village 5/ N Coon Rd Phase II 5/ Y Existing Prjoects MHC 5/ Y New Projects 5/8 3, , Y Total Proposed 10, , # Total Customer Growth Residential 17, ,

47 Table 3 DRAFT Lee County, Florida Preliminary Financial Evaluation - North Fort Myers Utility Inc. Customer Growth Projections Above Calendar Year 2007 Levels Number of Obligation to Line Total ERCs Committed Net ERCs Years Growth Pay Connection No. Development Name Meter Size Available to Date Available Will Occur Over Start Year Charge Residential Projects Under Contract 1 T.W. Magnolia Landing 5/8 1, , N 2 Stoneybrook N - Metro 5/8 1, , N 3 Oak Creek 5/ N 4 Tara Woods Phase A,B, & C 5/ N 5 GFY Enclaves of Eagle Nest 5/ N 6 Estates at Entrada 5/8 1, , N 7 Athyrid Development - Diplomat Rd 5/ N 8 Fountain Bridge Preserve 5/ N 9 Pine Prairie Preserve 5/ N 10 Northop Project - E Bayshore 5/ N 11 Yeatter - Henderson - Brook Rd 5/ N 12 Paradise Development Group 5/ N 13 Palermo 5/8 1, , N 14 Total Under Contract 7, ,356 Proposed Projects 15 Sloanes Gate 5/ Y 16 Laurel Rd - 10AC MFD 5/ Y 17 Bayshore Road 65AC 5/ Y 18 Chapel Creek 5/ Y 19 Stone Hill Manor 5/ Y 20 Julia Park 5/ Y 21 Slater Bend 5/ Y 22 N Trail Ventures 5/ Y 23 Nalle Grade 130 Project 5/ Y 24 Bayshore - Cove E-I 75 5/ Y 25 Tamiami Pines 5/ Y 26 Park 41 Commons 5/8 1, , Y 27 North River Village 5/8 1, , Y 28 Bayshore Crossings 5/ Y 29 Buccaneer MHC Addition 5/ N 30 Bay Point Condo's 5/ N 31 Pioneer Village 5/ N 32 Coon Rd Phase II 5/ Y 33 Existing Prjoects MHC 5/ Y 34 New Projects 5/8 3, , Y 35 Total Proposed 10, , Total Customer Growth Residential 17, ,

48 Table 3 DRAFT Lee County, Florida Preliminary Financial Evaluation - North Fort Myers Utility Inc. Customer Growth Projections Above Calendar Year 2007 Levels Number of Obligation to Line Total ERCs Committed Net ERCs Years Growth Pay Connection No. Development Name Meter Size Available to Date Available Will Occur Over Start Year Charge Residential Projects Under Contract 1 T.W. Magnolia Landing 5/8 1, , N 2 Stoneybrook N - Metro 5/8 1, , N 3 Oak Creek 5/ N 4 Tara Woods Phase A,B, & C 5/ N 5 GFY Enclaves of Eagle Nest 5/ N 6 Estates at Entrada 5/8 1, , N 7 Athyrid Development - Diplomat Rd 5/ N 8 Fountain Bridge Preserve 5/ N 9 Pine Prairie Preserve 5/ N 10 Northop Project - E Bayshore 5/ N 11 Yeatter - Henderson - Brook Rd 5/ N 12 Paradise Development Group 5/ N 13 Palermo 5/8 1, , N 14 Total Under Contract 7, ,356 Proposed Projects 15 Sloanes Gate 5/ Y 16 Laurel Rd - 10AC MFD 5/ Y 17 Bayshore Road 65AC 5/ Y 18 Chapel Creek 5/ Y 19 Stone Hill Manor 5/ Y 20 Julia Park 5/ Y 21 Slater Bend 5/ Y 22 N Trail Ventures 5/ Y 23 Nalle Grade 130 Project 5/ Y 24 Bayshore - Cove E-I 75 5/ Y 25 Tamiami Pines 5/ Y 26 Park 41 Commons 5/8 1, , Y 27 North River Village 5/8 1, , Y 28 Bayshore Crossings 5/ Y 29 Buccaneer MHC Addition 5/ N 30 Bay Point Condo's 5/ N 31 Pioneer Village 5/ N 32 Coon Rd Phase II 5/ Y 33 Existing Prjoects MHC 5/ Y 34 New Projects 5/8 3, , Y 35 Total Proposed 10, , Total Customer Growth Residential 17, ,

49 Table 3 DRAFT Lee County, Florida Preliminary Financial Evaluation - North Fort Myers Utility Inc. Customer Growth Projections Above Calendar Year 2007 Levels Number of Obligation to Line Total ERCs Committed Net ERCs Years Growth Pay Connection No. Development Name Meter Size Available to Date Available Will Occur Over Start Year Charge Residential Projects Under Contract 1 T.W. Magnolia Landing 5/8 1, , N 2 Stoneybrook N - Metro 5/8 1, , N 3 Oak Creek 5/ N 4 Tara Woods Phase A,B, & C 5/ N 5 GFY Enclaves of Eagle Nest 5/ N 6 Estates at Entrada 5/8 1, , N 7 Athyrid Development - Diplomat Rd 5/ N 8 Fountain Bridge Preserve 5/ N 9 Pine Prairie Preserve 5/ N 10 Northop Project - E Bayshore 5/ N 11 Yeatter - Henderson - Brook Rd 5/ N 12 Paradise Development Group 5/ N 13 Palermo 5/8 1, , N 14 Total Under Contract 7, ,356 Proposed Projects 15 Sloanes Gate 5/ Y 16 Laurel Rd - 10AC MFD 5/ Y 17 Bayshore Road 65AC 5/ Y 18 Chapel Creek 5/ Y 19 Stone Hill Manor 5/ Y 20 Julia Park 5/ Y 21 Slater Bend 5/ Y 22 N Trail Ventures 5/ Y 23 Nalle Grade 130 Project 5/ Y 24 Bayshore - Cove E-I 75 5/ Y 25 Tamiami Pines 5/ Y 26 Park 41 Commons 5/8 1, , Y 27 North River Village 5/8 1, , Y 28 Bayshore Crossings 5/ Y 29 Buccaneer MHC Addition 5/ N 30 Bay Point Condo's 5/ N 31 Pioneer Village 5/ N 32 Coon Rd Phase II 5/ Y 33 Existing Prjoects MHC 5/ Y 34 New Projects 5/8 3, , Y 35 Total Proposed 10, , Total Customer Growth Residential 17, ,

50 Table 3 DRAFT Lee County, Florida Preliminary Financial Evaluation - North Fort Myers Utility Inc. Customer Growth Projections Above Calendar Year 2007 Levels Number of Obligation to Line Total ERCs Committed Net ERCs Years Growth Pay Connection No. Development Name Meter Size Available to Date Available Will Occur Over Start Year Charge Commercial Projects Under Contract 37 Bayshore Commons Comm Pk N CC Hospital Site N Bayshore Rd-Station Center 5/ N Bayshore Village Market Square N Raymond Lumber N Bayshore Self Storage 5/ N Bayshore Convienience Store 5/ N Total Under Contract Proposed Projects 45 US-41 Comm Next to Walgreens Y LCEC New Office Site Y Racetrac - Bayshore Rd I-75 5/ Y Littleton Center Commercial 3/ Y Diplomat Center Commercial Y Bayshore Samville Rds Commercial Y Rainbow Motel Y Commercial New 5/ Y Upriver Campground N Total Proposed 1, , Total Commercial Customer Growth by Meter Class 55 5/8 5/ /4 3/ /2 1 1/ Total Customer Growth Commercial 1, , Multi-Family Projects Under Contract 62 River Bend Duplex 5/ N Total Under Contract Proposed Projects 64 Coconut MHP & RV 5/ N Total Proposed Total Customer Growth Multi-Family Total Customer Growth 19, , ,109 1, [1] Developments shown are under contract with NFMU to remit capacity charges and are still in the process of doing so are identified on Tables 9 and 10 (Line 26) as a lump sum credit towards the purchase price determination and not counted in this table.

51 Table 3 DRAFT Lee County, Florida Preliminary Financial Evaluation - North Fort Myers Utility Inc. Customer Growth Projections Above Calendar Year 2007 Levels Number of Obligation to Line Total ERCs Committed Net ERCs Years Growth Pay Connection No. Development Name Meter Size Available to Date Available Will Occur Over Start Year Charge Commercial Projects Under Contract 37 Bayshore Commons Comm Pk N 38 CC Hospital Site N 39 Bayshore Rd-Station Center 5/ N 40 Bayshore Village Market Square N 41 Raymond Lumber N 42 Bayshore Self Storage 5/ N 43 Bayshore Convienience Store 5/ N 44 Total Under Contract Proposed Projects 45 US-41 Comm Next to Walgreens Y 46 LCEC New Office Site Y 47 Racetrac - Bayshore Rd I-75 5/ Y 48 Littleton Center Commercial 3/ Y 49 Diplomat Center Commercial Y 50 Bayshore Samville Rds Commercial Y 51 Rainbow Motel Y 52 Commercial New 5/ Y 53 Upriver Campground N 54 Total Proposed 1, ,309 Total Commercial Customer Growth by Meter Class 55 5/8 5/ /4 3/ /2 1 1/ Total Customer Growth Commercial 1, , Multi-Family Projects Under Contract 62 River Bend Duplex 5/ N 63 Total Under Contract Proposed Projects 64 Coconut MHP & RV 5/ N 65 Total Proposed Total Customer Growth Multi-Family Total Customer Growth 19, ,542 [1] Developments shown are under contract with NFMU to remit capacity charges and are still in the process of doing so are identified on Tables 9 and 10 (Line 26) as a lump sum credit towards the purchase price determination and not counted in this table. 1,

52 Table 3 DRAFT Lee County, Florida Preliminary Financial Evaluation - North Fort Myers Utility Inc. Customer Growth Projections Above Calendar Year 2007 Levels Number of Obligation to Line Total ERCs Committed Net ERCs Years Growth Pay Connection No. Development Name Meter Size Available to Date Available Will Occur Over Start Year Charge Commercial Projects Under Contract 37 Bayshore Commons Comm Pk N 38 CC Hospital Site N 39 Bayshore Rd-Station Center 5/ N 40 Bayshore Village Market Square N 41 Raymond Lumber N 42 Bayshore Self Storage 5/ N 43 Bayshore Convienience Store 5/ N 44 Total Under Contract Proposed Projects 45 US-41 Comm Next to Walgreens Y 46 LCEC New Office Site Y 47 Racetrac - Bayshore Rd I-75 5/ Y 48 Littleton Center Commercial 3/ Y 49 Diplomat Center Commercial Y 50 Bayshore Samville Rds Commercial Y 51 Rainbow Motel Y 52 Commercial New 5/ Y 53 Upriver Campground N 54 Total Proposed 1, ,309 Total Commercial Customer Growth by Meter Class 55 5/8 5/ /4 3/ /2 1 1/ Total Customer Growth Commercial 1, , Multi-Family Projects Under Contract 62 River Bend Duplex 5/ N 63 Total Under Contract Proposed Projects 64 Coconut MHP & RV 5/ N 65 Total Proposed Total Customer Growth Multi-Family Total Customer Growth 19, ,542 [1] Developments shown are under contract with NFMU to remit capacity charges and are still in the process of doing so are identified on Tables 9 and 10 (Line 26) as a lump sum credit towards the purchase price determination and not counted in this table

53 Table 3 DRAFT Lee County, Florida Preliminary Financial Evaluation - North Fort Myers Utility Inc. Customer Growth Projections Above Calendar Year 2007 Levels Number of Obligation to Line Total ERCs Committed Net ERCs Years Growth Pay Connection No. Development Name Meter Size Available to Date Available Will Occur Over Start Year Charge Commercial Projects Under Contract 37 Bayshore Commons Comm Pk N 38 CC Hospital Site N 39 Bayshore Rd-Station Center 5/ N 40 Bayshore Village Market Square N 41 Raymond Lumber N 42 Bayshore Self Storage 5/ N 43 Bayshore Convienience Store 5/ N 44 Total Under Contract Proposed Projects 45 US-41 Comm Next to Walgreens Y 46 LCEC New Office Site Y 47 Racetrac - Bayshore Rd I-75 5/ Y 48 Littleton Center Commercial 3/ Y 49 Diplomat Center Commercial Y 50 Bayshore Samville Rds Commercial Y 51 Rainbow Motel Y 52 Commercial New 5/ Y 53 Upriver Campground N 54 Total Proposed 1, ,309 Total Commercial Customer Growth by Meter Class 55 5/8 5/ /4 3/ /2 1 1/ Total Customer Growth Commercial 1, , Multi-Family Projects Under Contract 62 River Bend Duplex 5/ N 63 Total Under Contract Proposed Projects 64 Coconut MHP & RV 5/ N 65 Total Proposed Total Customer Growth Multi-Family Total Customer Growth 19, ,542 [1] Developments shown are under contract with NFMU to remit capacity charges and are still in the process of doing so are identified on Tables 9 and 10 (Line 26) as a lump sum credit towards the purchase price determination and not counted in this table

54 Table 4 Lee County, Florida Preliminary Financial Evaluation - North Fort Myers Utility Inc. Estimation of Adjusted Fiscal Year 2007 Operating Expenses - Utility System Page 1 of 1 DRAFT Line Utility As No. Amount (1) Adjustments Adjusted 1 Operating Expenses 2 Salaries and Wages - Employees $ 172,064 $ (78,479) [2] $ 93,585 3 Salaries and Wages - Officers, Directors and Majority Stockholder 152,332 (152,332) [2] 0 4 Employee Pensions and Benefits Purchased Water Treatment 99, ,618 6 Purchased Sewer Treatment Sludge Removal 487, ,777 8 Purchased Power 358, ,539 9 Fuel for Power Purchased Chemicals Materials and Supplies 69, , Repairs and Maintenance Contractual Services - Engineering 6, , Contractual Services - Accounting 91,665 (91,665) [3] 0 15 Contractual Services - Legal 61,842 (61,842) [3] 0 16 Contractual Services - Management Fees 26,495 (26,495) [3] 0 17 Contractual Services - Testing Contractual Services - Other (5) 18 Labor 720, , Utilities 15, , Chemicals 95, , Repairs and Maintenance 189, , Lab Supplies 52, , Office Supplies 4, , Training and Miscellaneous 33, , Administrative and Customer Costs 56,537 (56,537) [5] 0 26 Other Operating Expenses 65, , Rental of Building / Real Property 36,506 (36,506) [6] 0 28 Rental of Equipment Transportation Expenses 1,773 (1,773) 0 30 Insurance - Vehicle Insurance - General Liability 76, , Insurance - Workman's Comp Insurance - Other 64,290 (56,376) [7] 7, Advertising Expenses Amortization of Rate Case Expense Regulatory Commission Expenses - Other 5,142 (5,142) 0 37 Bad Debt Expense 0.15% 360 8,898 (4) 9, Miscellaneous Expenses 484,012 (462,962) [7] 21, Contingency Allowance 1.00% 0 24,073 (8) 24, Total Operating Expenses $ 3,428,464 $ (997,138) $ 2,431,327 (1) Amounts shown derived from provided by the Company management and adjusted to reflect County ownership and operations. [2] Amount adjusted to eliminate administrative and management salaries which would be anticipated to be absorbed by existing County personnel. [3] Amounts shown eliminate contractual services costs anticipated to be absorbed under County ownership and operations. (4) Adjustment to recognize an allowance for bad debt expenses based on an assumed non-payment rate equivalent to 0.15% of system sales revenue. (5) Contractual Services Other includes costs primarily associated with retaining a contract operator to operate the system in addition to administrative and customer service costs. [6] Adjustment reflects elimination of rental costs associated with customer service office which is anticipated to be absorbed by existing County customer service office space. [7] Amount reduction eliminates incremental administrative insurance and overhead costs not anticipated to occur under County ownership. (8) Adjustment to recognize contingency allowance to account for unexpected operating expenses or changes in operating revenues; allowance estimated as a percent of all other operating revenues.

55 Table 5 DRAFT Lee County, Florida Preliminary Financial Evaluation - North Fort Myers Utility Inc. Projection of Operating Expenses - Utility System Line Escalation Adjusted (2) No. Reference (1) (3) Operating Expenses 1 Salaries and Wages - Employees Labor $ 93,585 95,897 95,897 95,897 95,897 95,897 95,897 95,897 95,897 95,897 95,897 2 Salaries and Wages - Officers, Directors and Majority Stockholders Labor Employee Pensions and Benefits Labor Purchased Water Treatment W-Customer 99, , , , , , , , , , ,079 5 Purchased Sewer Treatment S-Customer Sludge Removal S-Customer 487, , , , , , , , , , ,009 7 Purchased Power Customer 358, , , , , , , , , , ,861 8 Fuel for Power Purchased Customer Chemicals S-Customer Materials and Supplies Customer 69,993 75,645 82,658 84,848 87,682 90,917 95, , , , , Mechanical Integrity Test Allowance (2) CPI , , Repairs and Maintenance Repair Contractual Services - Engineering CPI 6,170 6,322 6,322 6,322 6,322 6,322 6,322 6,322 6,322 6,322 6, Contractual Services - Accounting CPI Contractual Services - Legal CPI Contractual Services - Management Fees CPI Contractual Services - Testing CPI 0 0 Contractual Services - Other 18 Labor Labor 720, , , , , , , , , , , Incremental Labor (4) Labor , , , , , , , , , Utilities Customer 15,084 16,302 17,813 18,285 18,896 19,593 20,594 21,554 22,526 23,522 24, Incremental Purchased Power (5) CPI 0 0 5,960 10,560 15,293 16,105 20,281 21,141 21,141 21,141 21, Incremental Water Meter Services Expenses (6) CPI ,726 33,726 33,726 33,726 33,726 33,726 33,726 33,726 33, Incremental Wastewater Collection Expenses (6) CPI ,461 74,461 74,461 74,461 74,461 74,461 74,461 74,461 74, Chemicals Customer 95, , , , , , , , , , , Repairs and Maintenance Repair 189, , , , , , , , , , , Lab Supplies Customer 52,465 56,702 61,958 63,600 65,724 68,149 71,631 74,969 78,350 81,813 85, Office Supplies CPI 4,153 4,256 4,256 4,256 4,256 4,256 4,256 4,256 4,256 4,256 4, Training and Miscellaneous CPI 33,781 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34, Administrative and Customer Costs CPI Other Operating Expenses CPI 65,432 67,048 67,048 67,048 67,048 67,048 67,048 67,048 67,048 67,048 67, Incremental Other Operating Expenses (4) CPI ,007 20,007 20,007 20,007 20,007 20,007 20,007 20,007 20, Rental of Building / Real Property CPI Rental of Equipment CPI Transportation Expenses CPI Insurance - Vehicle Insurance Insurance - General Liability Insurance 76,652 78,545 78,545 78,545 78,545 78,545 78,545 78,545 78,545 78,545 78, Insurance - Workman's Comp. Insurance Insurance - Other Insurance 7,914 8,109 8,109 8,109 8,109 8,109 8,109 8,109 8,109 8,109 8, Advertising Expenses CPI Amortization of Rate Case Expense CPI Regulatory Commission Expenses - Other CPI Bad Debt Expense Revenue 9,258 12,380 12,676 13,033 13,511 14,045 14,801 15,503 16,289 17,012 17, Miscellaneous Expenses GDP 21,050 21,570 21,570 21,570 21,570 21,570 21,570 21,570 21,570 21,570 21, Administrative Overhead Allocation CPI , , , , , , , , , Contingency Allowance 1.0% Calculate 24,073 25,964 29,608 30,016 32,032 31,075 31,884 32,628 33,375 35,638 34, Total Operating Expenses $ 2,431,327 $ 2,559,766 $ 3,110,039 $ 3,151,213 $ 3,354,786 $ 3,258,124 $ 3,339,881 $ 3,415,070 $ 3,490,474 $ 3,719,033 $ 3,641,609 (1) Amounts shown derived from Table 6. (2) Reflects $150,000 allowance for MIT test every five years. (3) Amounts escalated utilizing approved FPSC inflationary factor of 2.47%. (4) Amounts derived as follows on County information: Amount 2 Lift Station Technicians Including Benefits $112,320 I Instrumentation Technician Including Benefits 65,520 Total $177,840 Other Operating Expenses incremental cost of $6,669 per new person based on County personnel cost relationships (5) Assumes addition of 27 lift stations from FY in order to serve anticiptaed new growth. Amounts shown assume $745 per year for each incremental lift station added. (6) Amounts shown reflect incremental meter services, distribution costs to meet anticipated County levels of service.

56 Table 5 DRAFT Lee County, Florida Preliminary Financial Evaluation - North Fort Myers Utility Inc. Projection of Operating Expenses - Utility System Line Escalation No. Reference (1) Operating Expenses 1 Salaries and Wages - Employees Labor 2 Salaries and Wages - Officers, Directors and Majority Stockholders Labor 3 Employee Pensions and Benefits Labor 4 Purchased Water Treatment W-Customer 5 Purchased Sewer Treatment S-Customer 6 Sludge Removal S-Customer 7 Purchased Power Customer 8 Fuel for Power Purchased Customer 9 Chemicals S-Customer 10 Materials and Supplies Customer 11 Mechanical Integrity Test Allowance (2) CPI 12 Repairs and Maintenance Repair 13 Contractual Services - Engineering CPI 14 Contractual Services - Accounting CPI 15 Contractual Services - Legal CPI 16 Contractual Services - Management Fees CPI 17 Contractual Services - Testing CPI Contractual Services - Other 18 Labor Labor 19 Incremental Labor (4) Labor 20 Utilities Customer 21 Incremental Purchased Power (5) CPI 22 Incremental Water Meter Services Expenses (6) CPI 23 Incremental Wastewater Collection Expenses (6) CPI 24 Chemicals Customer 25 Repairs and Maintenance Repair 26 Lab Supplies Customer 27 Office Supplies CPI 28 Training and Miscellaneous CPI 29 Administrative and Customer Costs CPI 30 Other Operating Expenses CPI 31 Incremental Other Operating Expenses (4) CPI 32 Rental of Building / Real Property CPI 33 Rental of Equipment CPI 34 Transportation Expenses CPI 35 Insurance - Vehicle Insurance 36 Insurance - General Liability Insurance 37 Insurance - Workman's Comp. Insurance 38 Insurance - Other Insurance 39 Advertising Expenses CPI 40 Amortization of Rate Case Expense CPI 41 Regulatory Commission Expenses - Other CPI 42 Bad Debt Expense Revenue 43 Miscellaneous Expenses GDP 44 Administrative Overhead Allocation CPI 45 Contingency Allowance 1.0% Calculate 46 Total Operating Expenses (1) Amounts shown derived from Table 6. (2) Reflects $150,000 allowance for MIT test every five years. (3) Amounts escalated utilizing approved FPSC inflationary factor of 2.47%. (4) Amounts derived as follows on County information: Amount 2 Lift Station Technicians Including Benefits $112,320 I Instrumentation Technician Including Benefits 65,520 Total $177,840 Other Operating Expenses incremental cost of $6,669 per new person based on County personnel cost relationships (5) Assumes addition of 27 lift stations from FY in order to serve anticiptaed new growth. Amounts shown assume $745 per year for each incremental lift station added. (6) Amounts shown reflect incremental meter services, distribution costs to meet anticipated County levels of service ,897 95,897 95,897 95,897 95,897 95,897 95,897 95,897 95,897 95,897 95, , , , , , , , , , , , , , , , ,554 1,014,355 1,038,395 1,062,486 1,086,498 1,108,989 1,126, , , , , , , , , , , , , , , , , , , , , , , , , ,322 6,322 6,322 6,322 6,322 6,322 6,322 6,322 6,322 6,322 6, , , , , , , , , , , , , , , , , , , , , , ,840 25,436 26,336 27,192 27,981 28,770 29,475 30,129 30,786 31,442 32,055 32,529 21,141 21,141 21,141 21,141 21,141 21,141 21,141 21,141 21,141 21,141 21,141 33,726 33,726 33,726 33,726 33,726 33,726 33,726 33,726 33,726 33,726 33,726 74,461 74,461 74,461 74,461 74,461 74,461 74,461 74,461 74,461 74,461 74, , , , , , , , , , , , , , , , , , , , , , ,055 88,472 91,604 94,581 97, , , , , , , ,146 4,256 4,256 4,256 4,256 4,256 4,256 4,256 4,256 4,256 4,256 4,256 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34, ,048 67,048 67,048 67,048 67,048 67,048 67,048 67,048 67,048 67,048 67,048 20,007 20,007 20,007 20,007 20,007 20,007 20,007 20,007 20,007 20,007 20, ,545 78,545 78,545 78,545 78,545 78,545 78,545 78,545 78,545 78,545 78, ,109 8,109 8,109 8,109 8,109 8,109 8,109 8,109 8,109 8,109 8, ,411 19,042 19,644 20,204 20,764 21,271 21,745 22,219 22,694 23,141 23,502 21,570 21,570 21,570 21,570 21,570 21,570 21,570 21,570 21,570 21,570 21, , , , , , , , , , , ,598 35,605 36,296 36,951 39,055 38,160 38,700 39,202 39,705 41,707 40,677 41,040 $ 3,715,731 $ 3,785,452 $ 3,851,661 $ 4,064,194 $ 3,973,783 $ 4,028,275 $ 4,078,953 $ 4,129,780 $ 4,331,986 $ 4,227,940 $ 4,264,680

57 Table 5 DRAFT Lee County, Florida Preliminary Financial Evaluation - North Fort Myers Utility Inc. Projection of Operating Expenses - Utility System Line Escalation No. Reference (1) Operating Expenses 1 Salaries and Wages - Employees Labor 2 Salaries and Wages - Officers, Directors and Majority Stockholders Labor 3 Employee Pensions and Benefits Labor 4 Purchased Water Treatment W-Customer 5 Purchased Sewer Treatment S-Customer 6 Sludge Removal S-Customer 7 Purchased Power Customer 8 Fuel for Power Purchased Customer 9 Chemicals S-Customer 10 Materials and Supplies Customer 11 Mechanical Integrity Test Allowance (2) CPI 12 Repairs and Maintenance Repair 13 Contractual Services - Engineering CPI 14 Contractual Services - Accounting CPI 15 Contractual Services - Legal CPI 16 Contractual Services - Management Fees CPI 17 Contractual Services - Testing CPI Contractual Services - Other 18 Labor Labor 19 Incremental Labor (4) Labor 20 Utilities Customer 21 Incremental Purchased Power (5) CPI 22 Incremental Water Meter Services Expenses (6) CPI 23 Incremental Wastewater Collection Expenses (6) CPI 24 Chemicals Customer 25 Repairs and Maintenance Repair 26 Lab Supplies Customer 27 Office Supplies CPI 28 Training and Miscellaneous CPI 29 Administrative and Customer Costs CPI 30 Other Operating Expenses CPI 31 Incremental Other Operating Expenses (4) CPI 32 Rental of Building / Real Property CPI 33 Rental of Equipment CPI 34 Transportation Expenses CPI 35 Insurance - Vehicle Insurance 36 Insurance - General Liability Insurance 37 Insurance - Workman's Comp. Insurance 38 Insurance - Other Insurance 39 Advertising Expenses CPI 40 Amortization of Rate Case Expense CPI 41 Regulatory Commission Expenses - Other CPI 42 Bad Debt Expense Revenue 43 Miscellaneous Expenses GDP 44 Administrative Overhead Allocation CPI 45 Contingency Allowance 1.0% Calculate 46 Total Operating Expenses (1) Amounts shown derived from Table 6. (2) Reflects $150,000 allowance for MIT test every five years. (3) Amounts escalated utilizing approved FPSC inflationary factor of 2.47%. (4) Amounts derived as follows on County information: Amount 2 Lift Station Technicians Including Benefits $112,320 I Instrumentation Technician Including Benefits 65,520 Total $177,840 Other Operating Expenses incremental cost of $6,669 per new person based on County personnel cost relationships (5) Assumes addition of 27 lift stations from FY in order to serve anticiptaed new growth. Amounts shown assume $745 per year for each incremental lift station added. (6) Amounts shown reflect incremental meter services, distribution costs to meet anticipated County levels of service ,897 95,897 95,897 95,897 95,897 95,897 95,897 95,897 95, , , , , , , , , ,079 1,141,494 1,151,996 1,162,479 1,172,941 1,183,380 1,193,912 1,203,105 1,210,564 1,217, , , , , , , , , , , , , , , , , , , , , ,322 6,322 6,322 6,322 6,322 6,322 6,322 6,322 6, , , , , , , , , , , , , , , , , , ,840 32,939 33,226 33,512 33,797 34,084 34,370 34,621 34,825 35,027 21,141 21,141 21,141 21,141 21,141 21,141 21,141 21,141 21,141 33,726 33,726 33,726 33,726 33,726 33,726 33,726 33,726 33,726 74,461 74,461 74,461 74,461 74,461 74,461 74,461 74,461 74, , , , , , , , , , , , , , , , , , , , , , , , , , , ,835 4,256 4,256 4,256 4,256 4,256 4,256 4,256 4,256 4,256 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 67,048 67,048 67,048 67,048 67,048 67,048 67,048 67,048 67,048 20,007 20,007 20,007 20,007 20,007 20,007 20,007 20,007 20,007 78,545 78,545 78,545 78,545 78,545 78,545 78,545 78,545 78, ,109 8,109 8,109 8,109 8,109 8,109 8,109 8,109 8,109 23,819 24,057 24,295 24,533 24,771 25,009 25,224 25,411 25,597 21,570 21,570 21,570 21,570 21,570 21,570 21,570 21,570 21, , , , , , , , , ,598 41,355 41,575 43,294 42,013 42,233 42,452 42,645 44,302 42,956 $ 4,296,481 $ 4,318,681 $ 4,492,328 $ 4,362,919 $ 4,385,081 $ 4,407,298 $ 4,426,739 $ 4,594,052 $ 4,458,197

58 DRAFT Table 6 Lee County, Florida Preliminary Financial Evaluation - North Fort Myers Utility Inc. Projection of Operating Expenses - Utility System Escalation References Line Escalation No. Escalation Factors Reference Constant Factor Constant Repairs and Maintenance Expenses Repair Inflation (CPI) CPI Inflation (GDP) GDP Labor Labor Rate Revenue Revenue Marginal Marginal Insurance Insurance Water Customer Growth Plus W-Customer Wastewater Customer Growth S-Customer Customer Growth Customer R&R Fund Deposit Percent R&R Fund Eliminate Eliminate

59 DRAFT Table 6 Lee County, Florida Preliminary Financial Evaluation - North Fort Myers Utility Inc. Projection of Operating Expenses - Utility System Escalation References Line Escalation No. Escalation Factors Reference Constant Factor Constant 2 Repairs and Maintenance Expenses Repair 3 Inflation (CPI) CPI 4 Inflation (GDP) GDP 5 Labor Labor 6 Rate Revenue Revenue 7 Marginal Marginal 8 Insurance Insurance 9 Water Customer Growth Plus W-Customer 10 Wastewater Customer Growth S-Customer 11 Customer Growth Customer 12 R&R Fund Deposit Percent R&R Fund 13 Eliminate Eliminate

60 DRAFT Table 6 Lee County, Florida Preliminary Financial Evaluation - North Fort Myers Utility Inc. Projection of Operating Expenses - Utility System Escalation References Line Escalation No. Escalation Factors Reference Constant Factor Constant 2 Repairs and Maintenance Expenses Repair 3 Inflation (CPI) CPI 4 Inflation (GDP) GDP 5 Labor Labor 6 Rate Revenue Revenue 7 Marginal Marginal 8 Insurance Insurance 9 Water Customer Growth Plus W-Customer 10 Wastewater Customer Growth S-Customer 11 Customer Growth Customer 12 R&R Fund Deposit Percent R&R Fund 13 Eliminate Eliminate

61 Table 7 DRAFT Lee County, Florida Preliminary Financial Evaluation - North Fort Myers Utility Inc. Projection of Other Operating Revenues - Utility System Line Escalation No. Reference (1) Reclaimed Water Sales (000s of gallons) 2 City of Cape Coral (Existing Flows) 66,557 66,557 66,557 66,557 66,557 66,557 66,557 66,557 66,557 66,557 3 Incremental ERC Growth 5,318 (2) 4 Number of Years Growth Will Occur 25 5 Start Year Annual Incremental Growth Subtotal Incremental Growth ,065 1,278 1,491 1,704 1,917 8 Assumed Average Monthly Use per ERC (gallons) (3) 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9 Incremental Reclaimed Water Sales (000s) 0 24,538 49,075 73,613 98, , , , , , Total Reclaimed Water Sales 0 91, , , , , , , , , Pine Lakes Golf Course (City of Cape Coral) 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34, Reclaimed Sales Within Existing NFMU Service Territory 0 409, , , , , , , , , Total Annual Reclaimed Water Sales 34, , , , , , , , , , Total 34, , , , , , , , , , , Annual Price Index Adjustment 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 16 Current Rate for Service per Thosand Gallons Annual Reclaimed Water Sales Revenues Calculate $ 8,654 $ 25,293 $ 150,442 $ 156,576 $ 162,710 $ 168,845 $ 174,979 $ 181,114 $ 187,248 $ 193,382 $ 199, Bulk Wastewater Sales (000s of gallons) 19 City of Cape Coral (Existing Flows) 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12, Incremental ERC Growth 5, Number of Years Growth Will ocurr Over Start Year 2, Incremental ERC Growth Subtotal Incremental Growth ,145 1,374 1,603 1,832 2, Assumed Average Monthly Use per ERC (gallons) (4) 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2, Incremental Bulk Wastewater Sales (000s) 0 7,694 15,389 23,083 30,778 38,472 46,166 53,861 61,555 69, Total Wholesale Wastewater Sales (000s) 0 19,780 27,475 35,169 42,863 50,558 58,252 65,947 73,641 81, Annual Price Index Adjustment 0.00% 0.00% 11.30% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 29 Current Rate for Service per Thosand Gallons Calculate Annual Reclaimed Water Sales Revenues $ 42,784 $ 42,784 $ 125,553 $ 155,869 $ 186,185 $ 216,500 $ 246,816 $ 277,132 $ 307,448 $ 337,764 $ 368, Turn-On/Turn-Off Fees 32 NFMU Proper Pine Lakes/ Lake Forest Area Total Accounts Charged Service Charge Annual Price Index Adjustment 0.00% 0.00% % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 36 Current Initiation of Service Charge for Utility (5) Calculate $ Total Initiation of Service Charge Revenue $ 14,510 $ 14,510 $ 43,531 $ 43,531 $ 43,531 $ 43,531 $ 43,531 $ 43,531 $ 43,531 $ 43,531 $ 43, SepticTruck Deliveries Sales Revenues 39 Annual Trips to Plant Current Septic (4) Constant $ $ $ - $ - $ - $ - $ - $ - $ - $ - $ - 41 Total Meter Installation Fee Receipts $ 32,636 $ 32,636 $ - $ - $ - $ - $ - $ - $ - $ - $ - 42 Total Other Operating Revenues $ 98,584 $ 115,223 $ 319,525 $ 355,975 $ 392,426 $ 428,876 $ 465,326 $ 501,777 $ 538,227 $ 574,677 $ 611,128 (1) Escalation references summarized in Table 6 and represents basis of other operating revenue projections. (2) Amount does not include ERCs in Judd Creek subdivision since no reclaimed water service is to be provided. (3) Assumes weekly watering of approximately 3/4- inch per week for a typical single family lot which equates to approximately 2,400 gallons per week or 9,600 gallons per month. (4) Assumes typical unit will contribute approximately 2,800 gallons per month per ERC based on the last two years of historical information for the NFMU wactewater customer base. (5) Rate based on information as provided by NFMU. Amounts to single family residential Monthly Base Charge ($9.90) plus 5,000 gallon assumed septic tank volume (at $4.58 per 1,000).

62 Table 7 DRAFT Lee County, Florida Preliminary Financial Evaluation - North Fort Myers Utility Inc. Projection of Other Operating Revenues - Utility System Line Escalation No. Reference (1) 1 Reclaimed Water Sales (000s of gallons) 2 City of Cape Coral (Existing Flows) 3 Incremental ERC Growth 5,318 (2) 4 Number of Years Growth Will Occur 25 5 Start Year Annual Incremental Growth 7 Subtotal Incremental Growth 8 Assumed Average Monthly Use per ERC (gallons) (3) 9 Incremental Reclaimed Water Sales (000s) 10 Total Reclaimed Water Sales 11 Pine Lakes Golf Course (City of Cape Coral) 12 Reclaimed Sales Within Existing NFMU Service Territory 13 Total Annual Reclaimed Water Sales 14 Total 15 Annual Price Index Adjustment 16 Current Rate for Service per Thosand Gallons 17 Annual Reclaimed Water Sales Revenues Calculate ,557 66,557 66,557 66,557 66,557 66,557 66,557 66,557 66,557 66,557 66, ,130 2,343 2,556 2,769 2,982 3,195 3,408 3,621 3,834 4,047 4,260 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9, , , , , , , , , , , , , , , , , , , , , , ,309 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,368 1,018,906 1,043,443 1,067, % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% $ 205,651 $ 211,786 $ 217,920 $ 224,054 $ 230,189 $ 236,323 $ 242,458 $ 248,592 $ 254,726 $ 260,861 $ 266, Bulk Wastewater Sales (000s of gallons) 19 City of Cape Coral (Existing Flows) 20 Incremental ERC Growth 5, Number of Years Growth Will ocurr Over Start Year 2, Incremental ERC Growth 24 Subtotal Incremental Growth 25 Assumed Average Monthly Use per ERC (gallons) (4) 26 Incremental Bulk Wastewater Sales (000s) 27 Total Wholesale Wastewater Sales (000s) 28 Annual Price Index Adjustment 29 Current Rate for Service per Thosand Gallons Calculate 30 Annual Reclaimed Water Sales Revenues 31 Turn-On/Turn-Off Fees 32 NFMU Proper 33 Pine Lakes/ Lake Forest Area 34 Total Accounts Charged Service Charge 35 Annual Price Index Adjustment 36 Current Initiation of Service Charge for Utility (5) Calculate 37 Total Initiation of Service Charge Revenue 38 SepticTruck Deliveries Sales Revenues 39 Annual Trips to Plant 40 Current Septic (4) Constant 41 Total Meter Installation Fee Receipts 42 Total Other Operating Revenues 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12, ,290 2,519 2,748 2,977 3,206 3,435 3,664 3,893 4,122 4,351 4,580 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 76,944 84,638 92, , , , , , , , ,888 89,030 96, , , , , , , , , , % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% $ 398,396 $ 428,712 $ 459,028 $ 489,344 $ 519,660 $ 549,976 $ 580,292 $ 610,608 $ 640,924 $ 671,239 $ 701, % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% $ 43,531 $ 43,531 $ 43,531 $ 43,531 $ 43,531 $ 43,531 $ 43,531 $ 43,531 $ 43,531 $ 43,531 $ 43, $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 647,578 $ 684,028 $ 720,479 $ 756,929 $ 793,379 $ 829,830 $ 866,280 $ 902,730 $ 939,181 $ 975,631 $ 1,012,081 (1) Escalation references summarized in Table 6 and represents basis of other operating revenue projections. (2) Amount does not include ERCs in Judd Creek subdivision since no reclaimed water service is to be provided. (3) Assumes weekly watering of approximately 3/4- inch per week for a typical single family lot which equates to approximately 2,400 gallons per week or 9,600 gallons per month. (4) Assumes typical unit will contribute approximately 2,800 gallons per month per ERC based on the last two years of historical information for the NFMU wactewater customer base. (5) Rate based on information as provided by NFMU. Amounts to single family residential Monthly Base Charge ($9.90) plus 5,000 gallon assumed septic tank volume (at $4.58 per 1,000).

63 Table 7 DRAFT Lee County, Florida Preliminary Financial Evaluation - North Fort Myers Utility Inc. Projection of Other Operating Revenues - Utility System Line Escalation No. Reference (1) 1 Reclaimed Water Sales (000s of gallons) 2 City of Cape Coral (Existing Flows) 3 Incremental ERC Growth 5,318 (2) 4 Number of Years Growth Will Occur 25 5 Start Year Annual Incremental Growth 7 Subtotal Incremental Growth 8 Assumed Average Monthly Use per ERC (gallons) (3) 9 Incremental Reclaimed Water Sales (000s) 10 Total Reclaimed Water Sales 11 Pine Lakes Golf Course (City of Cape Coral) 12 Reclaimed Sales Within Existing NFMU Service Territory 13 Total Annual Reclaimed Water Sales 14 Total 15 Annual Price Index Adjustment 16 Current Rate for Service per Thosand Gallons 17 Annual Reclaimed Water Sales Revenues Calculate ,557 66,557 66,557 66,557 66,557 66,557 66,557 66,557 66,557 66,557 66, ,473 4,686 4,899 5,112 5,325 5,325 5,325 5,325 5,325 5,325 5,325 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9, , , , , , , , , , , , , , , , , , , , , , ,997 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34, , , , , , , , , , , , , , , , , , , , , , ,115 1,092,519 1,117,056 1,141,594 1,166,131 1,190,669 1,190,669 1,190,669 1,190,669 1,190,669 1,190,669 1,190, % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% $ 273,130 $ 279,264 $ 285,398 $ 291,533 $ 297,667 $ 297,667 $ 297,667 $ 297,667 $ 297,667 $ 297,667 $ 297, Bulk Wastewater Sales (000s of gallons) 19 City of Cape Coral (Existing Flows) 20 Incremental ERC Growth 5, Number of Years Growth Will ocurr Over Start Year 2, Incremental ERC Growth 24 Subtotal Incremental Growth 25 Assumed Average Monthly Use per ERC (gallons) (4) 26 Incremental Bulk Wastewater Sales (000s) 27 Total Wholesale Wastewater Sales (000s) 28 Annual Price Index Adjustment 29 Current Rate for Service per Thosand Gallons Calculate 30 Annual Reclaimed Water Sales Revenues 31 Turn-On/Turn-Off Fees 32 NFMU Proper 33 Pine Lakes/ Lake Forest Area 34 Total Accounts Charged Service Charge 35 Annual Price Index Adjustment 36 Current Initiation of Service Charge for Utility (5) Calculate 37 Total Initiation of Service Charge Revenue 38 SepticTruck Deliveries Sales Revenues 39 Annual Trips to Plant 40 Current Septic (4) Constant 41 Total Meter Installation Fee Receipts 42 Total Other Operating Revenues 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12, ,809 5,038 5,267 5,496 5,725 5,725 5,725 5,725 5,725 5,725 5,725 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2, , , , , , , , , , , , , , , , , , , , , , , % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% $ 731,871 $ 762,187 $ 792,503 $ 822,819 $ 853,135 $ 853,135 $ 853,135 $ 853,135 $ 853,135 $ 853,135 $ 853, % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% $ 43,531 $ 43,531 $ 43,531 $ 43,531 $ 43,531 $ 43,531 $ 43,531 $ 43,531 $ 43,531 $ 43,531 $ 43, $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 1,048,532 $ 1,084,982 $ 1,121,432 $ 1,157,883 $ 1,194,333 $ 1,194,333 $ 1,194,333 $ 1,194,333 $ 1,194,333 $ 1,194,333 $ 1,194,333 (1) Escalation references summarized in Table 6 and represents basis of other operating revenue projections. (2) Amount does not include ERCs in Judd Creek subdivision since no reclaimed water service is to be provided. (3) Assumes weekly watering of approximately 3/4- inch per week for a typical single family lot which equates to approximately 2,400 gallons per week or 9,600 gallons per month. (4) Assumes typical unit will contribute approximately 2,800 gallons per month per ERC based on the last two years of historical information for the NFMU wactewater customer base. (5) Rate based on information as provided by NFMU. Amounts to single family residential Monthly Base Charge ($9.90) plus 5,000 gallon assumed septic tank volume (at $4.58 per 1,000).

64 Table 7A DRAFT Lee County, Florida Preliminary Financial Evaluation - North Fort Myers Utility Inc. Projection of Other Operating Revenues - Utility System Line Escalation No. Reference (1) Reclaimed Water Sales (000s of gallons) 2 City of Cape Coral (Existing Flows) 66,557 66,557 66,557 66,557 66,557 66,557 66,557 66,557 66,557 66,557 3 Incremental ERC Growth 5,318 (2) 4 Number of Years Growth Will Occur 25 5 Start Year Annual Incremental Growth Subtotal Incremental Growth ,065 1,278 1,491 1,704 1,917 8 Assumed Average Monthly Use per ERC (gallons) (3) 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9 Incremental Reclaimed Water Sales (000s) 0 24,538 49,075 73,613 98, , , , , , Total Reclaimed Water Sales 0 91, , , , , , , , , Pine Lakes Golf Course (City of Cape Coral) 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34, Reclaimed Sales Within Existing NFMU Service Territory 0 409, , , , , , , , , Total Annual Reclaimed Water Sales 34, , , , , , , , , , Total 34, , , , , , , , , , , Annual Price Index Adjustment 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 16 Current Rate for Service per Thosand Gallons Annual Reclaimed Water Sales Revenues Calculate $ 8,654 $ 25,293 $ 150,442 $ 156,576 $ 162,710 $ 168,845 $ 174,979 $ 181,114 $ 187,248 $ 193,382 $ 199, Bulk Wastewater Sales (000s of gallons) 19 City of Cape Coral (Existing Flows) 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12, Incremental ERC Growth 5, Number of Years Growth Will ocurr Over Start Year 2, Incremental ERC Growth Subtotal Incremental Growth ,145 1,374 1,603 1,832 2, Assumed Average Monthly Use per ERC (gallons) (4) 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2, Incremental Bulk Wastewater Sales (000s) 0 7,694 15,389 23,083 30,778 38,472 46,166 53,861 61,555 69, Total Wholesale Wastewater Sales (000s) 0 19,780 27,475 35,169 42,863 50,558 58,252 65,947 73,641 81, Annual Price Index Adjustment 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 29 Current Rate for Service per Thosand Gallons Calculate Annual Reclaimed Water Sales Revenues $ 42,784 $ 42,784 $ 112,806 $ 140,044 $ 167,283 $ 194,521 $ 221,759 $ 248,997 $ 276,235 $ 303,473 $ 330, Turn-On/Turn-Off Fees 32 NFMU Proper Pine Lakes/ Lake Forest Area Total Accounts Charged Service Charge Annual Price Index Adjustment 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 36 Current Initiation of Service Charge for Utility (5) Calculate $ Total Initiation of Service Charge Revenue $ 14,510 $ 14,510 $ 14,510 $ 14,510 $ 14,510 $ 14,510 $ 14,510 $ 14,510 $ 14,510 $ 14,510 $ 14, SepticTruck Deliveries Sales Revenues 39 Annual Trips to Plant Current Septic (4) Constant $ $ $ $ $ $ $ $ $ $ $ Total Meter Installation Fee Receipts $ 32,636 $ 32,636 $ 32,636 $ 32,636 $ 32,636 $ 32,636 $ 32,636 $ 32,636 $ 32,636 $ 32,636 $ 32, Total Other Operating Revenues $ 98,584 $ 115,223 $ 310,394 $ 343,766 $ 377,139 $ 410,511 $ 443,884 $ 477,256 $ 510,629 $ 544,002 $ 577,374 (1) Escalation references summarized in Table 6 and represents basis of other operating revenue projections. (2) Amount does not include ERCs in Judd Creek subdivision since no reclaimed water service is to be provided. (3) Assumes weekly watering of approximately 3/4- inch per week for a typical single family lot which equates to approximately 2,400 gallons per week or 9,600 gallons per month. (4) Assumes typical unit will contribute approximately 2,800 gallons per month per ERC based on the last two years of historical information for the NFMU wactewater customer base. (5) Rate based on information as provided by NFMU. Amounts to single family residential Monthly Base Charge ($9.90) plus 5,000 gallon assumed septic tank volume (at $4.58 per 1,000).

65 Table 7A DRAFT Lee County, Florida Preliminary Financial Evaluation - North Fort Myers Utility Inc. Projection of Other Operating Revenues - Utility System Line Escalation No. Reference (1) 1 Reclaimed Water Sales (000s of gallons) 2 City of Cape Coral (Existing Flows) 3 Incremental ERC Growth 5,318 (2) 4 Number of Years Growth Will Occur 25 5 Start Year Annual Incremental Growth 7 Subtotal Incremental Growth 8 Assumed Average Monthly Use per ERC (gallons) (3) 9 Incremental Reclaimed Water Sales (000s) 10 Total Reclaimed Water Sales 11 Pine Lakes Golf Course (City of Cape Coral) 12 Reclaimed Sales Within Existing NFMU Service Territory 13 Total Annual Reclaimed Water Sales 14 Total 15 Annual Price Index Adjustment 16 Current Rate for Service per Thosand Gallons 17 Annual Reclaimed Water Sales Revenues Calculate ,557 66,557 66,557 66,557 66,557 66,557 66,557 66,557 66,557 66,557 66, ,130 2,343 2,556 2,769 2,982 3,195 3,408 3,621 3,834 4,047 4,260 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9, , , , , , , , , , , , , , , , , , , , , , ,309 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,368 1,018,906 1,043,443 1,067, % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% $ 205,651 $ 211,786 $ 217,920 $ 224,054 $ 230,189 $ 236,323 $ 242,458 $ 248,592 $ 254,726 $ 260,861 $ 266, Bulk Wastewater Sales (000s of gallons) 19 City of Cape Coral (Existing Flows) 20 Incremental ERC Growth 5, Number of Years Growth Will ocurr Over Start Year 2, Incremental ERC Growth 24 Subtotal Incremental Growth 25 Assumed Average Monthly Use per ERC (gallons) (4) 26 Incremental Bulk Wastewater Sales (000s) 27 Total Wholesale Wastewater Sales (000s) 28 Annual Price Index Adjustment 29 Current Rate for Service per Thosand Gallons Calculate 30 Annual Reclaimed Water Sales Revenues 31 Turn-On/Turn-Off Fees 32 NFMU Proper 33 Pine Lakes/ Lake Forest Area 34 Total Accounts Charged Service Charge 35 Annual Price Index Adjustment 36 Current Initiation of Service Charge for Utility (5) Calculate 37 Total Initiation of Service Charge Revenue 38 SepticTruck Deliveries Sales Revenues 39 Annual Trips to Plant 40 Current Septic (4) Constant 41 Total Meter Installation Fee Receipts 42 Total Other Operating Revenues 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12, ,290 2,519 2,748 2,977 3,206 3,435 3,664 3,893 4,122 4,351 4,580 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 76,944 84,638 92, , , , , , , , ,888 89,030 96, , , , , , , , , , % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% $ 357,950 $ 385,188 $ 412,426 $ 439,664 $ 466,902 $ 494,141 $ 521,379 $ 548,617 $ 575,855 $ 603,093 $ 630, % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% $ 14,510 $ 14,510 $ 14,510 $ 14,510 $ 14,510 $ 14,510 $ 14,510 $ 14,510 $ 14,510 $ 14,510 $ 14, $ $ $ $ $ $ $ $ $ $ $ $ 32,636 $ 32,636 $ 32,636 $ 32,636 $ 32,636 $ 32,636 $ 32,636 $ 32,636 $ 32,636 $ 32,636 $ 32,636 $ 610,747 $ 644,119 $ 677,492 $ 710,865 $ 744,237 $ 777,610 $ 810,982 $ 844,355 $ 877,727 $ 911,100 $ 944,473 (1) Escalation references summarized in Table 6 and represents basis of other operating revenue projections. (2) Amount does not include ERCs in Judd Creek subdivision since no reclaimed water service is to be provided. (3) Assumes weekly watering of approximately 3/4- inch per week for a typical single family lot which equates to approximately 2,400 gallons per week or 9,600 gallons per month. (4) Assumes typical unit will contribute approximately 2,800 gallons per month per ERC based on the last two years of historical information for the NFMU wactewater customer base. (5) Rate based on information as provided by NFMU. Amounts to single family residential Monthly Base Charge ($9.90) plus 5,000 gallon assumed septic tank volume (at $4.58 per 1,000).

66 Table 7A DRAFT Lee County, Florida Preliminary Financial Evaluation - North Fort Myers Utility Inc. Projection of Other Operating Revenues - Utility System Line Escalation No. Reference (1) 1 Reclaimed Water Sales (000s of gallons) 2 City of Cape Coral (Existing Flows) 3 Incremental ERC Growth 5,318 (2) 4 Number of Years Growth Will Occur 25 5 Start Year Annual Incremental Growth 7 Subtotal Incremental Growth 8 Assumed Average Monthly Use per ERC (gallons) (3) 9 Incremental Reclaimed Water Sales (000s) 10 Total Reclaimed Water Sales 11 Pine Lakes Golf Course (City of Cape Coral) 12 Reclaimed Sales Within Existing NFMU Service Territory 13 Total Annual Reclaimed Water Sales 14 Total 15 Annual Price Index Adjustment 16 Current Rate for Service per Thosand Gallons 17 Annual Reclaimed Water Sales Revenues Calculate ,557 66,557 66,557 66,557 66,557 66,557 66,557 66,557 66,557 66,557 66, ,473 4,686 4,899 5,112 5,325 5,325 5,325 5,325 5,325 5,325 5,325 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9, , , , , , , , , , , , , , , , , , , , , , ,997 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34, , , , , , , , , , , , , , , , , , , , , , ,115 1,092,519 1,117,056 1,141,594 1,166,131 1,190,669 1,190,669 1,190,669 1,190,669 1,190,669 1,190,669 1,190, % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% $ 273,130 $ 279,264 $ 285,398 $ 291,533 $ 297,667 $ 297,667 $ 297,667 $ 297,667 $ 297,667 $ 297,667 $ 297, Bulk Wastewater Sales (000s of gallons) 19 City of Cape Coral (Existing Flows) 20 Incremental ERC Growth 5, Number of Years Growth Will ocurr Over Start Year 2, Incremental ERC Growth 24 Subtotal Incremental Growth 25 Assumed Average Monthly Use per ERC (gallons) (4) 26 Incremental Bulk Wastewater Sales (000s) 27 Total Wholesale Wastewater Sales (000s) 28 Annual Price Index Adjustment 29 Current Rate for Service per Thosand Gallons Calculate 30 Annual Reclaimed Water Sales Revenues 31 Turn-On/Turn-Off Fees 32 NFMU Proper 33 Pine Lakes/ Lake Forest Area 34 Total Accounts Charged Service Charge 35 Annual Price Index Adjustment 36 Current Initiation of Service Charge for Utility (5) Calculate 37 Total Initiation of Service Charge Revenue 38 SepticTruck Deliveries Sales Revenues 39 Annual Trips to Plant 40 Current Septic (4) Constant 41 Total Meter Installation Fee Receipts 42 Total Other Operating Revenues 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12, ,809 5,038 5,267 5,496 5,725 5,725 5,725 5,725 5,725 5,725 5,725 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2, , , , , , , , , , , , , , , , , , , , , , , % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% $ 657,570 $ 684,808 $ 712,046 $ 739,284 $ 766,522 $ 766,522 $ 766,522 $ 766,522 $ 766,522 $ 766,522 $ 766, % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% $ 14,510 $ 14,510 $ 14,510 $ 14,510 $ 14,510 $ 14,510 $ 14,510 $ 14,510 $ 14,510 $ 14,510 $ 14, $ $ $ $ $ $ $ $ $ $ $ $ 32,636 $ 32,636 $ 32,636 $ 32,636 $ 32,636 $ 32,636 $ 32,636 $ 32,636 $ 32,636 $ 32,636 $ 32,636 $ 977,845 $ 1,011,218 $ 1,044,590 $ 1,077,963 $ 1,111,335 $ 1,111,335 $ 1,111,335 $ 1,111,335 $ 1,111,335 $ 1,111,335 $ 1,111,335 (1) Escalation references summarized in Table 6 and represents basis of other operating revenue projections. (2) Amount does not include ERCs in Judd Creek subdivision since no reclaimed water service is to be provided. (3) Assumes weekly watering of approximately 3/4- inch per week for a typical single family lot which equates to approximately 2,400 gallons per week or 9,600 gallons per month. (4) Assumes typical unit will contribute approximately 2,800 gallons per month per ERC based on the last two years of historical information for the NFMU wactewater customer base. (5) Rate based on information as provided by NFMU. Amounts to single family residential Monthly Base Charge ($9.90) plus 5,000 gallon assumed septic tank volume (at $4.58 per 1,000).

67 DRAFT Table 8 Lee County, Florida Preliminary Financial Evaluation - North Fort Myers Utility Inc. Estimate of Capital Expenditures and Funding Needs - Utility System Line Escalation No. Reference (1) General Plant (Departmental Capital) (2) CPI $ 71,839 71,839 71,839 71,839 71,839 71,839 71,839 71,839 71,839 71,839 71, Meter Installation Costs - New Services (3) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ Renewal and Replacement Fund Equivalent (4) 6 Projected Gross System Revenues 7 Water Rate Revenue $ 347,822 $ 436,563 $ 436,563 $ 436,563 $ 436,563 $ 436,563 $ 436,563 $ 436,563 $ 436,563 $ 436,563 $ 436,563 8 Wastewater Rate Revenue 4,309,145 5,640,811 5,785,842 5,961,164 6,196,122 6,458,133 6,828,842 7,173,257 7,559,279 7,914,578 8,258,060 9 Other Operating Revenue (per Table 7) 98, , , , , , , , , , , Interest Income (per Table 7) Total Gross System Revenues $ 4,755,551 $ 6,192,597 $ 6,541,930 $ 6,753,703 $ 7,025,110 $ 7,323,572 $ 7,730,732 $ 8,111,597 $ 8,534,069 $ 8,925,818 $ 9,305, Incremental R&R Fund Transfer Percentage 0.05% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.05% 5.10% 5.15% 5.20% 5.25% 14 Renewal and Replacement Fund Requirement (5.0 percent) R&R Fund $ 237,778 $ 309,630 $ 327,097 $ 337,685 $ 351,256 $ 366,179 $ 390,402 $ 413,691 $ 439,505 $ 464,143 $ 488, Other Capital Expenditures 16 NFMU Additional Costs for Improvements to Standard Operating Levels $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 17 Total Capital Improvements/Asset Replacement Funding Recognized $ 309,617 $ 381,469 $ 398,936 $ 409,524 $ 423,095 $ 438,018 $ 462,241 $ 485,530 $ 511,344 $ 535,982 $ 560,391 (1) Escalation reference summarized on Table 6 and represents basis of other operating revenue projections. (2) Amount based on i) fixed asset list contained in the 2007 Annual Report as submitted to the Florida Public Service Commission for General Plant (account nos. 340 to 347 for the water system and 390 to 397 for the wastewater system); ii) an assumed asset service life (replacement) of 8 years based on the composite depreciation lives included in the Annual Report; and iii) application of the consumer price index to estimate replacement cost. Amount calculated as follows: Amount Water System General Plant (acct. nos ) $ 812 Wastewater System General Plant (acct. nos ,898 Total Reported General Plant $ 574,710 Average Service Life (years) 8 Fiscal Year 2007 Departmental Capital Allowance $ 71,839 Adjustment for Inflation on Asset Replacement (CPI) 0.00% Fiscal Year 2008 Departmental Capital Allowance $ 71,839 (3) Based on discussions with NFMU staff, the NFMU retail water system is essentially built out and the utility does not bill for any potential Water meter installations. (4) The Bond Resolution requires that the County System maintain a Renewal and Replacement Fund with the purpose to replace assets as may be required from time to time. The Resolution requires a deposit in an amount equal to 5% of the previous years' Gross Revenues (the "Renewal and Replacement Fund Requirement").

68 DRAFT Table 8 Lee County, Florida Preliminary Financial Evaluation - North Fort Myers Utility Inc. Estimate of Capital Expenditures and Funding Needs - Utility System Line Escalation No. Reference (1) 1 General Plant (Departmental Capital) (2) CPI 2 3 Meter Installation Costs - New Services (3) 4 5 Renewal and Replacement Fund Equivalent (4) 6 Projected Gross System Revenues 7 Water Rate Revenue 8 Wastewater Rate Revenue 9 Other Operating Revenue (per Table 7) 10 Interest Income (per Table 7) Total Gross System Revenues 13 Incremental R&R Fund Transfer Percentage 0.05% 14 Renewal and Replacement Fund Requirement (5.0 percent) R&R Fund 15 Other Capital Expenditures 16 NFMU Additional Costs for Improvements to Standard Operating Levels 17 Total Capital Improvements/Asset Replacement Funding Recognized ,839 71,839 71,839 71,839 71,839 71,839 71,839 71,839 71,839 71,839 71,839 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 436,563 $ 436,563 $ 436,563 $ 436,563 $ 436,563 $ 436,563 $ 436,563 $ 436,563 $ 436,563 $ 436,563 $ 436,563 8,601,542 8,911,357 9,207,178 9,481,855 9,756,531 10,004,776 10,237,784 10,470,792 10,703,801 10,923,437 11,100, , , , , , , , , , ,631 1,012, $ 9,685,683 $ 10,031,948 $ 10,364,220 $ 10,675,347 $ 10,986,474 $ 11,271,169 $ 11,540,627 $ 11,810,086 $ 12,079,544 $ 12,335,631 $ 12,548, % 5.35% 5.40% 5.45% 5.50% 5.55% 5.60% 5.65% 5.70% 5.75% 5.80% $ 513,341 $ 536,709 $ 559,668 $ 581,806 $ 604,256 $ 625,550 $ 646,275 $ 667,270 $ 688,534 $ 709,299 $ 727,831 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 585,180 $ 608,548 $ 631,507 $ 653,645 $ 676,095 $ 697,389 $ 718,114 $ 739,109 $ 760,373 $ 781,138 $ 799,670

69 DRAFT Table 8 Lee County, Florida Preliminary Financial Evaluation - North Fort Myers Utility Inc. Estimate of Capital Expenditures and Funding Needs - Utility System Line Escalation No. Reference (1) 1 General Plant (Departmental Capital) (2) CPI 2 3 Meter Installation Costs - New Services (3) 4 5 Renewal and Replacement Fund Equivalent (4) 6 Projected Gross System Revenues 7 Water Rate Revenue 8 Wastewater Rate Revenue 9 Other Operating Revenue (per Table 7) 10 Interest Income (per Table 7) Total Gross System Revenues 13 Incremental R&R Fund Transfer Percentage 0.05% 14 Renewal and Replacement Fund Requirement (5.0 percent) R&R Fund 15 Other Capital Expenditures 16 NFMU Additional Costs for Improvements to Standard Operating Levels 17 Total Capital Improvements/Asset Replacement Funding Recognized ,839 71,839 71,839 71,839 71,839 71,839 71,839 71,839 71,839 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 436,563 $ 436,563 $ 436,563 $ 436,563 $ 436,563 $ 436,563 $ 436,563 $ 436,563 $ 436,563 11,256,363 11,373,695 11,491,026 11,608,357 11,725,689 11,843,020 11,949,157 12,040,368 12,131,579 1,048,532 1,084,982 1,121,432 1,157,883 1,194,333 1,194,333 1,194,333 1,194,333 1,194, $ 12,741,458 $ 12,895,239 $ 13,049,021 $ 13,202,803 $ 13,356,585 $ 13,473,916 $ 13,580,053 $ 13,671,264 $ 13,762, % 5.90% 5.95% 6.00% 6.05% 6.10% 6.15% 6.20% 6.25% $ 745,375 $ 760,819 $ 776,417 $ 792,168 $ 808,073 $ 821,909 $ 835,173 $ 847,618 $ 860,155 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 817,214 $ 832,658 $ 848,256 $ 864,007 $ 879,912 $ 893,748 $ 907,012 $ 919,457 $ 931,994

70 Table 9 Lee County, Florida Preliminary Financial Evaluation - North Fort Myers Utility Inc. Summary of Net Present Value of Utility System Cash Flow Page 1 of 3 DRAFT Line No Utility System Cash Receipts 1 Water Rate Revenue (1) $ 347,822 $ 436,563 $ 436,563 $ 436,563 $ 436,563 $ 436,563 $ 436,563 $ 436,563 $ 436,563 $ 436,563 $ 436,563 2 Wastewater Rate Revenue (2) 4,309,145 5,640,811 5,785,842 5,961,164 6,196,122 6,458,133 6,828,842 7,173,257 7,559,279 7,914,578 8,258,060 Other Operating Income (3) 3 Reclaimed Water Revenues 8,654 25, , , , , , , , , ,517 4 Bulk Wastewater Sales Revenues 42,784 42, , , , , , , , , ,080 5 Meter Turn-On/Turn-Off Charges 14,510 14,510 43,531 43,531 43,531 43,531 43,531 43,531 43,531 43,531 43,531 6 Septic Disposal Charges 32,636 32, Total Utility System Revenues $ 4,755,551 $ 6,192,597 $ 6,541,930 $ 6,753,703 $ 7,025,110 $ 7,323,572 $ 7,730,732 $ 8,111,597 $ 8,534,069 $ 8,925,818 $ 9,305,750 8 Interest Income Total Utility Cash Receipts - Operations 4,755,551 6,192,597 6,541,930 6,753,703 7,025,110 7,323,572 7,730,732 8,111,597 8,534,069 8,925,818 9,305, Direct Utility System Expenditures 11 Operating Expenses (4) 2,431,327 2,559,766 3,110,039 3,151,213 3,354,786 3,258,124 3,339,881 3,415,070 3,490,474 3,719,033 3,641, Capital Expenditures Funded from Operations (5) 309, , , , , , , , , , , Less Capital Expenditures Funded By the Company Net Capital Expenditures Funded from Operations 309, , , , , , , , , , , Net Available for Acquisition and Debt Retirement of System 2,014,607 3,251,361 3,032,955 3,192,965 3,247,230 3,627,431 3,928,610 4,210,996 4,532,251 4,670,803 5,103, Net Present Value of Net Available (5) 5.00% $ 2,014,607 $ 3,251,361 $ 2,888,529 $ 2,896,114 $ 2,805,080 $ 2,984,296 $ 3,078,168 $ 3,142,310 $ 3,220,986 $ 3,161,384 $ 3,289, Total Gross Cash Net Present Value - Sum of All Periods $ 88,238, Total Utility System Expenditures 19 Operating Expenses (4) 2,431,327 2,559,766 3,110,039 3,151,213 3,354,786 3,258,124 3,339,881 3,415,070 3,490,474 3,719,033 3,641, Total System Capital Expenditures (5) 309, , , , , , , , , , , Net Available for Acquisition of System 2,014,607 3,251,361 3,032,955 3,192,965 3,247,230 3,627,431 3,928,610 4,210,996 4,532,251 4,670,803 5,103, Net Present Value of Net Available 5.00% $ 2,014,607 $ 3,251,361 $ 2,888,529 $ 2,896,114 $ 2,805,080 $ 2,984,296 $ 3,078,168 $ 3,142,310 $ 3,220,986 $ 3,161,384 $ 3,289, Total Net Cash Present Value - Sum of All Periods $ 86,224, Capacity/Connection Charges Applied to Capital Construction (6) , , , ,520 1,649,200 1,537,480 1,460,340 1,518,860 1,455, Net Present Value of Capacity/Connection Charges 5.00% $ - $ - $ 263,467 $ 299,175 $ 625,004 $ 814,081 $ 1,292,191 $ 1,147,291 $ 1,037,836 $ 1,028,024 $ 937, Addition Of Capacity/Connection Charges from Approved Contracts (7) $ 4,427, Total Net Present Value Capacity Charges - Sum of all Periods and Adjustments $ 19,687,424 Capital Deductions: 28 Del Prado Plant Expansion to 7.5 MGD $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 3,324,275 $ - 29 Immediate Pump Station Improvements $ - $ - $ 438,750 $ - $ - $ - $ - $ - $ - $ - $ - 30 Telemetry and Plant Computerized and Odor Control Improvements $ - $ - $ 700,000 $ - $ - $ - $ - $ - $ - $ - $ - 31 Additional Field Crew and Instrumentation Technician Vehicles $ - $ - $ 168,000 $ - $ - $ - $ - $ - $ - $ - $ - 32 Total Capital Deductions $ - $ - $ 1,306,750 $ - $ - $ - $ - $ - $ - $ 3,324,275 $ - 33 Net Present Value of Capital Deductions $ - $ - $ 1,244,524 $ - $ - $ - $ - $ - $ - $ 2,250,000 $ - 34 Total Net Present Value of Capital Deductions - Sum of all Periods $ 23,744,524 Other Deductions: 35 Other Recognized Deductions 0 36 Financing Charges 2.50% $ 2,054, Total of Other Adjustments $ 2,054, Total Net Present Value Cash and Capacity/Connection Charges - 39 Sum of All Periods $ 80,113,025 (1) Amounts shown based on estimated customer growth projections (reference Table 1) and existing County rates for utility service. (2) Amounts shown based on estimated customer growth projections (reference Table 2) and existing County rates for utility service. (3) Amounts shown derived from Table 7. (4) Amounts shown derived from Tables 4 and 5. (5) Amounts shown derived from Table 8. (6) Amount shown reflects estimated future connection fee collections that for purposes of this analysis have been assumed to accrue to the seller for valuation determination. (7) Based on information provided by NFMU, approximately $4,427,706 in connection charges are due to be paid the Company per signed wastewater agreements entered between NFMU and developments desiring to reserve treatment capacity. For purposes of this analysis it has been assumed that such contracted payments would be remitted to NFMU at that point in time when such charges are collected by the County assuming the purchase transaction occurs.

71 Table 9 Lee County, Florida Preliminary Financial Evaluation - North Fort Myers Utility Inc. Summary of Net Present Value of Utility System Cash Flow Page 2 of 3 DRAFT Line No. Utility System Cash Receipts 1 Water Rate Revenue (1) 2 Wastewater Rate Revenue (2) Other Operating Income (3) 3 Reclaimed Water Revenues 4 Bulk Wastewater Sales Revenues 5 Meter Turn-On/Turn-Off Charges 6 Septic Disposal Charges $ 436,563 $ 436,563 $ 436,563 $ 436,563 $ 436,563 $ 436,563 $ 436,563 $ 436,563 $ 436,563 $ 436,563 $ 436,563 8,601,542 8,911,357 9,207,178 9,481,855 9,756,531 10,004,776 10,237,784 10,470,792 10,703,801 10,923,437 11,100, , , , , , , , , , , , , , , , , , , , , , ,555 43,531 43,531 43,531 43,531 43,531 43,531 43,531 43,531 43,531 43,531 43, Total Utility System Revenues 8 Interest Income 9 Total Utility Cash Receipts - Operations 10 Direct Utility System Expenditures 11 Operating Expenses (4) 12 Capital Expenditures Funded from Operations (5) 13 Less Capital Expenditures Funded By the Company 14 Net Capital Expenditures Funded from Operations 15 Net Available for Acquisition and Debt Retirement of System 16 Net Present Value of Net Available (5) 5.00% 17 Total Gross Cash Net Present Value - Sum of All Periods 18 Total Utility System Expenditures 19 Operating Expenses (4) 20 Total System Capital Expenditures (5) 21 Net Available for Acquisition of System 22 Net Present Value of Net Available 5.00% 23 Total Net Cash Present Value - Sum of All Periods 24 Capacity/Connection Charges Applied to Capital Construction (6) 25 Net Present Value of Capacity/Connection Charges 5.00% 26 Addition Of Capacity/Connection Charges from Approved Contracts (7) 27 Total Net Present Value Capacity Charges - Sum of all Periods and Adjustm Capital Deductions: 28 Del Prado Plant Expansion to 7.5 MGD 29 Immediate Pump Station Improvements 30 Telemetry and Plant Computerized and Odor Control Improvements 31 Additional Field Crew and Instrumentation Technician Vehicles 32 Total Capital Deductions 33 Net Present Value of Capital Deductions 34 Total Net Present Value of Capital Deductions - Sum of all Periods Other Deductions: 35 Other Recognized Deductions 36 Financing Charges 2.50% 37 Total of Other Adjustments 38 Total Net Present Value Cash and Capacity/Connection Charges - 39 Sum of All Periods $ 9,685,683 $ 10,031,948 $ 10,364,220 $ 10,675,347 $ 10,986,474 $ 11,271,169 $ 11,540,627 $ 11,810,086 $ 12,079,544 $ 12,335,631 $ 12,548, ,685,683 10,031,948 10,364,220 10,675,347 10,986,474 11,271,169 11,540,627 11,810,086 12,079,544 12,335,631 12,548,806 3,715,731 3,785,452 3,851,661 4,064,194 3,973,783 4,028,275 4,078,953 4,129,780 4,331,986 4,227,940 4,264, , , , , , , , , , , , , , , , , , , , , , ,670 5,384,771 5,637,948 5,881,052 5,957,507 6,336,595 6,545,505 6,743,561 6,941,197 6,987,185 7,326,554 7,484,456 $ 3,305,782 $ 3,296,391 $ 3,274,790 $ 3,159,393 $ 3,200,411 $ 3,148,500 $ 3,089,303 $ 3,028,421 $ 2,903,320 $ 2,899,366 $ 2,820,813 3,715,731 3,785,452 3,851,661 4,064,194 3,973,783 4,028,275 4,078,953 4,129,780 4,331,986 4,227,940 4,264, , , , , , , , , , , ,670 5,384,771 5,637,948 5,881,052 5,957,507 6,336,595 6,545,505 6,743,561 6,941,197 6,987,185 7,326,554 7,484,456 $ 3,305,782 $ 3,296,391 $ 3,274,790 $ 3,159,393 $ 3,200,411 $ 3,148,500 $ 3,089,303 $ 3,028,421 $ 2,903,320 $ 2,899,366 $ 2,820,813 1,455,020 1,327,340 1,260,840 1,141,140 1,141,140 1,042, , , , , ,080 $ 893,256 $ 776,068 $ 702,083 $ 605,171 $ 576,353 $ 501,566 $ 417,972 $ 398,068 $ 379,113 $ 361,060 $ 288,727 $ - $ - $ - $ 38,184,395 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 38,184,395 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 20,250,000 $ - $ - $ - $ - $ - $ - $ -

72 Table 9 Lee County, Florida Preliminary Financial Evaluation - North Fort Myers Utility Inc. Summary of Net Present Value of Utility System Cash Flow Page 3 of 3 DRAFT Line No. Utility System Cash Receipts 1 Water Rate Revenue (1) 2 Wastewater Rate Revenue (2) Other Operating Income (3) 3 Reclaimed Water Revenues 4 Bulk Wastewater Sales Revenues 5 Meter Turn-On/Turn-Off Charges 6 Septic Disposal Charges $ 436,563 $ 436,563 $ 436,563 $ 436,563 $ 436,563 $ 436,563 $ 436,563 $ 436,563 $ 436,563 11,256,363 11,373,695 11,491,026 11,608,357 11,725,689 11,843,020 11,949,157 12,040,368 12,131, , , , , , , , , , , , , , , , , , ,135 43,531 43,531 43,531 43,531 43,531 43,531 43,531 43,531 43, Total Utility System Revenues 8 Interest Income 9 Total Utility Cash Receipts - Operations 10 Direct Utility System Expenditures 11 Operating Expenses (4) 12 Capital Expenditures Funded from Operations (5) 13 Less Capital Expenditures Funded By the Company 14 Net Capital Expenditures Funded from Operations 15 Net Available for Acquisition and Debt Retirement of System 16 Net Present Value of Net Available (5) 5.00% 17 Total Gross Cash Net Present Value - Sum of All Periods 18 Total Utility System Expenditures 19 Operating Expenses (4) 20 Total System Capital Expenditures (5) 21 Net Available for Acquisition of System 22 Net Present Value of Net Available 5.00% 23 Total Net Cash Present Value - Sum of All Periods 24 Capacity/Connection Charges Applied to Capital Construction (6) 25 Net Present Value of Capacity/Connection Charges 5.00% 26 Addition Of Capacity/Connection Charges from Approved Contracts (7) 27 Total Net Present Value Capacity Charges - Sum of all Periods and Adjustm Capital Deductions: 28 Del Prado Plant Expansion to 7.5 MGD 29 Immediate Pump Station Improvements 30 Telemetry and Plant Computerized and Odor Control Improvements 31 Additional Field Crew and Instrumentation Technician Vehicles 32 Total Capital Deductions 33 Net Present Value of Capital Deductions 34 Total Net Present Value of Capital Deductions - Sum of all Periods Other Deductions: 35 Other Recognized Deductions 36 Financing Charges 2.50% 37 Total of Other Adjustments 38 Total Net Present Value Cash and Capacity/Connection Charges - 39 Sum of All Periods $ 12,741,458 $ 12,895,239 $ 13,049,021 $ 13,202,803 $ 13,356,585 $ 13,473,916 $ 13,580,053 $ 13,671,264 $ 13,762,475 12,741,458 12,895,239 13,049,021 13,202,803 13,356,585 13,473,916 13,580,053 13,671,264 13,762,475 4,296,481 4,318,681 4,492,328 4,362,919 4,385,081 4,407,298 4,426,739 4,594,052 4,458, , , , , , , , , , , , , , , , , , ,994 7,627,762 7,743,900 7,708,437 7,975,877 8,091,592 8,172,870 8,246,302 8,157,755 8,372,284 $ 2,737,927 $ 2,647,251 $ 2,509,646 $ 2,473,063 $ 2,389,469 $ 2,298,544 $ 2,208,758 $ 2,080,991 $ 2,034,015 4,296,481 4,318,681 4,492,328 4,362,919 4,385,081 4,407,298 4,426,739 4,594,052 4,458, , , , , , , , , ,994 7,627,762 7,743,900 7,708,437 7,975,877 8,091,592 8,172,870 8,246,302 8,157,755 8,372,284 $ 2,737,927 $ 2,647,251 $ 2,509,646 $ 2,473,063 $ 2,389,469 $ 2,298,544 $ 2,208,758 $ 2,080,991 $ 2,034, , , , , , , , , ,640 $ 274,979 $ 261,884 $ 249,414 $ 237,537 $ 226,226 $ 215,453 $ 179,544 $ 138,424 $ 131,832 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -

73 Table 10 Lee County, Florida Preliminary Financial Evaluation - North Fort Myers Utility Inc. Summary of Net Present Value of Utility System Cash Flow Page 1 of 3 DRAFT Line No Utility System Cash Receipts 1 Water Rate Revenue (1) $ 396,620 $ 400,338 $ 400,338 $ 400,338 $ 400,338 $ 400,338 $ 400,338 $ 400,338 $ 400,338 $ 400,338 $ 400,338 2 Wastewater Rate Revenue (2) 4,262,662 4,394,864 4,612,977 4,886,849 5,230,040 5,571,734 5,980,005 6,387,527 6,766,375 7,131,508 7,493,150 Other Operating Income (3) 3 Reclaimed Water Revenues 8,654 25, , , , , , , , , ,517 4 Bulk Wastewater Sales Revenues 42,784 42, , , , , , , , , ,712 5 Meter Turn-On/Turn-Off Charges 14,510 14,510 14,510 14,510 14,510 14,510 14,510 14,510 14,510 14,510 14,510 6 Septic Disposal Charges 32,636 32,636 32,636 32,636 32,636 32,636 32,636 32,636 32,636 32,636 32,636 7 Total Utility System Revenues $ 4,757,865 $ 4,910,425 $ 5,323,709 $ 5,630,953 $ 6,007,516 $ 6,382,583 $ 6,824,226 $ 7,265,122 $ 7,677,342 $ 8,075,847 $ 8,470,862 8 Interest Income Total Utility Cash Receipts - Operations 4,757,865 4,910,425 5,323,709 5,630,953 6,007,516 6,382,583 6,824,226 7,265,122 7,677,342 8,075,847 8,470, Direct Utility System Expenditures 11 Operating Expenses (4) 2,431,327 2,557,122 3,107,547 3,148,922 3,352,718 3,256,220 3,338,054 3,413,373 3,488,761 3,717,340 3,639, Capital Expenditures Funded from Operations (5) 309, , , , , , , , , , , Less Capital Expenditures Funded By the Company Net Capital Expenditures Funded from Operations 309, , , , , , , , , , , Net Available for Acquisition and Debt Retirement of System 2,016,806 2,035,942 1,878,138 2,128,644 2,282,583 2,735,396 3,069,710 3,409,389 3,721,358 3,866,724 4,314, Net Present Value of Net Available (5) 5.00% $ 2,016,806 $ 2,035,942 $ 1,788,703 $ 1,930,743 $ 1,971,781 $ 2,250,417 $ 2,405,198 $ 2,544,138 $ 2,644,700 $ 2,617,151 $ 2,781, Total Gross Cash Net Present Value - Sum of All Periods $ 70,016, Total Utility System Expenditures 19 Operating Expenses (4) 2,431,327 2,557,122 3,107,547 3,148,922 3,352,718 3,256,220 3,338,054 3,413,373 3,488,761 3,717,340 3,639, Total System Capital Expenditures (5) 309, , , , , , , , , , , Net Available for Acquisition of System 2,016,806 2,035,942 1,878,138 2,128,644 2,282,583 2,735,396 3,069,710 3,409,389 3,721,358 3,866,724 4,314, Net Present Value of Net Available 5.00% $ 2,016,806 $ 2,035,942 $ 1,788,703 $ 1,930,743 $ 1,971,781 $ 2,250,417 $ 2,405,198 $ 2,544,138 $ 2,644,700 $ 2,617,151 $ 2,781, Total Net Cash Present Value - Sum of All Periods $ 67,999, Capacity/Connection Charges Applied to Capital Construction (6) , , , , , , , , , Net Present Value of Capacity/Connection Charges 5.00% $ - $ - $ 131,838 $ 290,862 $ 421,276 $ 381,886 $ 453,756 $ 430,727 $ 343,426 $ 316,757 $ 301, Addition Of Capacity/Connection Charges from Approved Contracts (7) $ 4,427, Total Net Present Value Capacity Charges - Sum of all Periods and Adjustments $ 8,090,399 Capital Deductions: 28 Del Prado Plant Expansion to 7.5 MGD $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 3,324,275 $ - 29 Immediate Pump Station Improvements $ - $ - $ 438,750 $ - $ - $ - $ - $ - $ - $ - $ - 30 Telemetry and Plant Computerized and Odor Control Improvements $ - $ - $ 700,000 $ - $ - $ - $ - $ - $ - $ - $ - 31 Additional Field Crew and Instrumentation Technician Vehicles $ - $ - $ 168,000 $ - $ - $ - $ - $ - $ - $ - $ - 32 Total Capital Deductions $ - $ - $ 1,306,750 $ - $ - $ - $ - $ - $ - $ 3,324,275 $ - 33 Net Present Value of Capital Deductions $ - $ - $ 1,244,524 $ - $ - $ - $ - $ - $ - $ 2,250,000 $ - 34 Total Net Present Value of Capital Deductions - Sum of all Periods $ 23,744,524 Other Deductions: 35 Other Recognized Deductions 0 36 Financing Charges 2.50% $ 1,308, Total of Other Adjustments $ 1,308, Total Net Present Value Cash and Capacity/Connection Charges - 39 Sum of All Periods $ 51,036,787 (1) Amounts shown based on estimated customer growth projections (reference Table 1) and existing County rates for utility service. (2) Amounts shown based on estimated customer growth projections (reference Table 2) and existing County rates for utility service. (3) Amounts shown derived from Table 7. (4) Amounts shown derived from Tables 4 and 5. (5) Amounts shown derived from Table 8. (6) Amount shown reflects estimated future connection fee collections that for purposes of this analysis have been assumed to accrue to the seller for valuation determination. (7) Based on information provided by NFMU, approximately $4,427,706 in connection charges are due to be paid the Company per signed wastewater agreements entered between NFMU and developments desiring to reserve treatment capacity. For purposes of this analysis it has been assumed that such contracted payments would be remitted to NFMU at that point in time when such charges are collected by the County assuming the purchase transaction occurs.

74 Table 10 Lee County, Florida Preliminary Financial Evaluation - North Fort Myers Utility Inc. Summary of Net Present Value of Utility System Cash Flow Page 2 of 3 DRAFT Line No. Utility System Cash Receipts 1 Water Rate Revenue (1) 2 Wastewater Rate Revenue (2) Other Operating Income (3) 3 Reclaimed Water Revenues 4 Bulk Wastewater Sales Revenues 5 Meter Turn-On/Turn-Off Charges 6 Septic Disposal Charges $ 400,338 $ 400,338 $ 400,338 $ 400,338 $ 400,338 $ 400,338 $ 400,338 $ 400,338 $ 400,338 $ 400,338 $ 400,338 7,837,279 8,156,223 8,432,529 8,647,495 8,862,462 9,077,428 9,220,581 9,339,050 9,399,918 9,460,787 9,521, , , , , , , , , , , , , , , , , , , , , , ,332 14,510 14,510 14,510 14,510 14,510 14,510 14,510 14,510 14,510 14,510 14,510 32,636 32,636 32,636 32,636 32,636 32,636 32,636 32,636 32,636 32,636 32,636 7 Total Utility System Revenues 8 Interest Income 9 Total Utility Cash Receipts - Operations 10 Direct Utility System Expenditures 11 Operating Expenses (4) 12 Capital Expenditures Funded from Operations (5) 13 Less Capital Expenditures Funded By the Company 14 Net Capital Expenditures Funded from Operations 15 Net Available for Acquisition and Debt Retirement of System 16 Net Present Value of Net Available (5) 5.00% 17 Total Gross Cash Net Present Value - Sum of All Periods 18 Total Utility System Expenditures 19 Operating Expenses (4) 20 Total System Capital Expenditures (5) 21 Net Available for Acquisition of System 22 Net Present Value of Net Available 5.00% 23 Total Net Cash Present Value - Sum of All Periods 24 Capacity/Connection Charges Applied to Capital Construction (6) 25 Net Present Value of Capacity/Connection Charges 5.00% 26 Addition Of Capacity/Connection Charges from Approved Contracts (7) 27 Total Net Present Value Capacity Charges - Sum of all Periods and Adjustm Capital Deductions: 28 Del Prado Plant Expansion to 7.5 MGD 29 Immediate Pump Station Improvements 30 Telemetry and Plant Computerized and Odor Control Improvements 31 Additional Field Crew and Instrumentation Technician Vehicles 32 Total Capital Deductions 33 Net Present Value of Capital Deductions 34 Total Net Present Value of Capital Deductions - Sum of all Periods Other Deductions: 35 Other Recognized Deductions 36 Financing Charges 2.50% 37 Total of Other Adjustments 38 Total Net Present Value Cash and Capacity/Connection Charges - 39 Sum of All Periods $ 8,848,364 $ 9,200,681 $ 9,510,359 $ 9,758,698 $ 10,007,036 $ 10,255,375 $ 10,431,901 $ 10,583,742 $ 10,677,984 $ 10,772,225 $ 10,866, ,848,364 9,200,681 9,510,359 9,758,698 10,007,036 10,255,375 10,431,901 10,583,742 10,677,984 10,772,225 10,866,466 3,714,077 3,783,815 3,849,986 4,062,395 3,971,860 4,026,282 4,076,775 4,127,367 4,329,217 4,224,845 4,261, , , , , , , , , , , , , , , , , , , , , , ,094 4,593,484 4,852,790 5,074,975 5,092,615 5,412,950 5,588,081 5,699,101 5,786,555 5,668,282 5,856,138 5,903,026 $ 2,820,001 $ 2,837,326 $ 2,825,936 $ 2,700,723 $ 2,733,908 $ 2,687,962 $ 2,610,824 $ 2,524,655 $ 2,355,288 $ 2,317,473 $ 2,224,788 3,714,077 3,783,815 3,849,986 4,062,395 3,971,860 4,026,282 4,076,775 4,127,367 4,329,217 4,224,845 4,261, , , , , , , , , , , ,094 4,593,484 4,852,790 5,074,975 5,092,615 5,412,950 5,588,081 5,699,101 5,786,555 5,668,282 5,856,138 5,903,026 $ 2,820,001 $ 2,837,326 $ 2,825,936 $ 2,700,723 $ 2,733,908 $ 2,687,962 $ 2,610,824 $ 2,524,655 $ 2,355,288 $ 2,317,473 $ 2,224, , ,535 89,535 $ 281,461 $ - $ - $ - $ - $ - $ - $ - $ - $ 35,432 $ 33,745 $ - $ - $ - $ 38,184,395 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 38,184,395 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 20,250,000 $ - $ - $ - $ - $ - $ - $ -

75 Table 10 Lee County, Florida Preliminary Financial Evaluation - North Fort Myers Utility Inc. Summary of Net Present Value of Utility System Cash Flow Page 3 of 3 DRAFT Line No. Utility System Cash Receipts 1 Water Rate Revenue (1) 2 Wastewater Rate Revenue (2) Other Operating Income (3) 3 Reclaimed Water Revenues 4 Bulk Wastewater Sales Revenues 5 Meter Turn-On/Turn-Off Charges 6 Septic Disposal Charges $ 400,338 $ 400,338 $ 400,338 $ 400,338 $ 400,338 $ 400,338 $ 400,338 $ 400,338 $ 400,338 9,582,525 9,643,393 9,704,262 9,765,131 9,826,000 9,886,868 9,947,737 10,008,606 10,069, , , , , , , , , , , , , , , , , , ,522 14,510 14,510 14,510 14,510 14,510 14,510 14,510 14,510 14,510 32,636 32,636 32,636 32,636 32,636 32,636 32,636 32,636 32,636 7 Total Utility System Revenues 8 Interest Income 9 Total Utility Cash Receipts - Operations 10 Direct Utility System Expenditures 11 Operating Expenses (4) 12 Capital Expenditures Funded from Operations (5) 13 Less Capital Expenditures Funded By the Company 14 Net Capital Expenditures Funded from Operations 15 Net Available for Acquisition and Debt Retirement of System 16 Net Present Value of Net Available (5) 5.00% 17 Total Gross Cash Net Present Value - Sum of All Periods 18 Total Utility System Expenditures 19 Operating Expenses (4) 20 Total System Capital Expenditures (5) 21 Net Available for Acquisition of System 22 Net Present Value of Net Available 5.00% 23 Total Net Cash Present Value - Sum of All Periods 24 Capacity/Connection Charges Applied to Capital Construction (6) 25 Net Present Value of Capacity/Connection Charges 5.00% 26 Addition Of Capacity/Connection Charges from Approved Contracts (7) 27 Total Net Present Value Capacity Charges - Sum of all Periods and Adjustm Capital Deductions: 28 Del Prado Plant Expansion to 7.5 MGD 29 Immediate Pump Station Improvements 30 Telemetry and Plant Computerized and Odor Control Improvements 31 Additional Field Crew and Instrumentation Technician Vehicles 32 Total Capital Deductions 33 Net Present Value of Capital Deductions 34 Total Net Present Value of Capital Deductions - Sum of all Periods Other Deductions: 35 Other Recognized Deductions 36 Financing Charges 2.50% 37 Total of Other Adjustments 38 Total Net Present Value Cash and Capacity/Connection Charges - 39 Sum of All Periods $ 10,960,708 $ 11,054,949 $ 11,149,190 $ 11,243,432 $ 11,337,673 $ 11,398,542 $ 11,459,410 $ 11,520,279 $ 11,581,148 10,960,708 11,054,949 11,149,190 11,243,432 11,337,673 11,398,542 11,459,410 11,520,279 11,581,148 4,292,951 4,315,036 4,488,569 4,359,044 4,381,090 4,403,194 4,422,542 4,589,791 4,453, , , , , , , , , , , , , , , , , , ,661 5,954,716 6,015,832 5,925,405 6,137,943 6,198,815 6,228,198 6,260,275 6,144,392 6,331,614 $ 2,137,400 $ 2,056,511 $ 1,929,142 $ 1,903,179 $ 1,830,527 $ 1,751,623 $ 1,676,804 $ 1,567,395 $ 1,538,242 4,292,951 4,315,036 4,488,569 4,359,044 4,381,090 4,403,194 4,422,542 4,589,791 4,453, , , , , , , , , ,661 5,954,716 6,015,832 5,925,405 6,137,943 6,198,815 6,228,198 6,260,275 6,144,392 6,331,614 $ 2,137,400 $ 2,056,511 $ 1,929,142 $ 1,903,179 $ 1,830,527 $ 1,751,623 $ 1,676,804 $ 1,567,395 $ 1,538,242 89,535 89,535 89,535 89,535 89,535 89,535 89,535 89,535 89,535 $ 32,138 $ 30,608 $ 29,150 $ 27,762 $ 26,440 $ 25,181 $ 23,982 $ 22,840 $ 21,752 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -

76 Table 11 Lee County, Florida Preliminary Financial Evaluation - North Fort Myers Utility Inc. Summary of Net Present Value of Utility System Cash Flow Page 1 of 3 DRAFT Line No Utility System Cash Receipts 1 Water Rate Revenue (1) $ 553,126 $ 558,311 $ 558,311 $ 558,311 $ 558,311 $ 558,311 $ 558,311 $ 558,311 $ 558,311 $ 558,311 $ 558,311 2 Wastewater Rate Revenue (2) 5,490,290 5,786,771 6,020,459 6,351,858 6,716,223 7,072,185 7,578,438 8,083,721 8,551,835 9,002,174 9,447,987 Other Operating Income (3) 3 Reclaimed Water Revenues 8,654 25, , , , , , , , , ,517 4 Bulk Wastewater Sales Revenues 42,784 42, , , , , , , , , ,080 5 Meter Turn-On/Turn-Off Charges 14,510 14,510 43,531 43,531 43,531 43,531 43,531 43,531 43,531 43,531 43,531 6 Septic Disposal Charges 32,636 32, Total Utility System Revenues $ 6,141,999 $ 6,460,305 $ 6,898,295 $ 7,266,144 $ 7,666,960 $ 8,059,372 $ 8,602,075 $ 9,143,809 $ 9,648,374 $ 10,135,162 $ 10,617,426 8 Interest Income Total Utility Cash Receipts - Operations 6,141,999 6,460,305 6,898,295 7,266,144 7,666,960 8,059,372 8,602,075 9,143,809 9,648,374 10,135,162 10,617, Direct Utility System Expenditures 11 Operating Expenses (4) 2,431,327 2,557,321 3,107,667 3,149,005 3,352,673 3,256,035 3,337,831 3,413,112 3,488,464 3,717,006 3,639, Capital Expenditures Funded from Operations (5) 378, , , , , , , , , , , Less Capital Expenditures Funded By the Company Net Capital Expenditures Funded from Operations 378, , , , , , , , , , , Net Available for Acquisition and Debt Retirement of System 3,331,733 3,508,130 3,373,875 3,681,993 3,859,100 4,328,530 4,758,001 5,192,524 5,591,179 5,819,289 6,348, Net Present Value of Net Available (5) 5.00% $ 3,331,733 $ 3,508,130 $ 3,213,214 $ 3,339,676 $ 3,333,636 $ 3,561,092 $ 3,728,018 $ 3,874,741 $ 3,973,547 $ 3,938,724 $ 4,092, Total Gross Cash Net Present Value - Sum of All Periods $ 104,288, Total Utility System Expenditures 19 Operating Expenses (4) 2,431,327 2,557,321 3,107,667 3,149,005 3,352,673 3,256,035 3,337,831 3,413,112 3,488,464 3,717,006 3,639, Total System Capital Expenditures (5) 378, , , , , , , , , , , Net Available for Acquisition of System 3,331,733 3,508,130 3,373,875 3,681,993 3,859,100 4,328,530 4,758,001 5,192,524 5,591,179 5,819,289 6,348, Net Present Value of Net Available 5.00% $ 3,331,733 $ 3,508,130 $ 3,213,214 $ 3,339,676 $ 3,333,636 $ 3,561,092 $ 3,728,018 $ 3,874,741 $ 3,973,547 $ 3,938,724 $ 4,092, Total Net Cash Present Value - Sum of All Periods ########### 24 Capacity/Connection Charges Applied to Capital Construction (6) , , , , , , , , , Net Present Value of Capacity/Connection Charges 5.00% $ - $ - $ 60,476 $ 215,986 $ 253,424 $ 241,356 $ 418,430 $ 397,084 $ 311,385 $ 286,242 $ 272, Addition Of Capacity/Connection Charges from Approved Contracts (7) $ 4,427, Total Net Present Value Capacity Charges - Sum of all Periods and Adjustments $ 7,473,900 Capital Deductions: 28 Del Prado Plant Expansion to 7.5 MGD $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 3,324,275 $ - 29 Immediate Pump Station Improvements $ - $ - $ 438,750 $ - $ - $ - $ - $ - $ - $ - $ - 30 Telemetry and Plant Computerized and Odor Control Improvements $ - $ - $ 700,000 $ - $ - $ - $ - $ - $ - $ - $ - 31 Additional Field Crew and Instrumentation Technician Vehicles $ - $ - $ 168,000 $ - $ - $ - $ - $ - $ - $ - $ - 32 Total Capital Deductions $ - $ - $ 1,306,750 $ - $ - $ - $ - $ - $ - $ 3,324,275 $ - 33 Net Present Value of Capital Deductions $ - $ - $ 1,244,524 $ - $ - $ - $ - $ - $ - $ 2,250,000 $ - 34 Total Net Present Value of Capital Deductions - Sum of all Periods $ 23,744,524 Other Deductions: 35 Other Recognized Deductions 0 36 Financing Charges 2.50% $ 2,117, Total of Other Adjustments $ 2,117, Total Net Present Value Cash and Capacity/Connection Charges - 39 Sum of All Periods $ 82,569,171 (1) Amounts shown based on estimated customer growth projections (reference Table 1) and existing County rates for utility service. (2) Amounts shown based on estimated customer growth projections (reference Table 2) and existing County rates for utility service. (3) Amounts shown derived from Table 7. (4) Amounts shown derived from Tables 4 and 5. (5) Amounts shown derived from Table 8. (6) Amount shown reflects estimated future connection fee collections that for purposes of this analysis have been assumed to accrue to the seller for valuation determination. (7) Based on information provided by NFMU, approximately $4,427,706 in connection charges are due to be paid the Company per signed wastewater agreements entered between NFMU and developments desiring to reserve treatment capacity. For purposes of this analysis it has been assumed that such contracted payments would be remitted to NFMU at that point in time when such charges are collected by the County assuming the purchase transaction occurs.

77 Table 11 Lee County, Florida Preliminary Financial Evaluation - North Fort Myers Utility Inc. Summary of Net Present Value of Utility System Cash Flow Page 2 of 3 DRAFT Line No. Utility System Cash Receipts 1 Water Rate Revenue (1) 2 Wastewater Rate Revenue (2) Other Operating Income (3) 3 Reclaimed Water Revenues 4 Bulk Wastewater Sales Revenues 5 Meter Turn-On/Turn-Off Charges 6 Septic Disposal Charges $ 558,311 $ 558,311 $ 558,311 $ 558,311 $ 558,311 $ 558,311 $ 558,311 $ 558,311 $ 558,311 $ 558,311 $ 558,311 9,871,099 10,261,567 10,596,767 10,852,459 11,108,150 11,363,842 11,526,450 11,657,061 11,769,895 11,882,730 11,961, , , , , , , , , , , , , , , , , , , , , , ,555 43,531 43,531 43,531 43,531 43,531 43,531 43,531 43,531 43,531 43,531 43, Total Utility System Revenues 8 Interest Income 9 Total Utility Cash Receipts - Operations 10 Direct Utility System Expenditures 11 Operating Expenses (4) 12 Capital Expenditures Funded from Operations (5) 13 Less Capital Expenditures Funded By the Company 14 Net Capital Expenditures Funded from Operations 15 Net Available for Acquisition and Debt Retirement of System 16 Net Present Value of Net Available (5) 5.00% 17 Total Gross Cash Net Present Value - Sum of All Periods 18 Total Utility System Expenditures 19 Operating Expenses (4) 20 Total System Capital Expenditures (5) 21 Net Available for Acquisition of System 22 Net Present Value of Net Available 5.00% 23 Total Net Cash Present Value - Sum of All Periods 24 Capacity/Connection Charges Applied to Capital Construction (6) 25 Net Present Value of Capacity/Connection Charges 5.00% 26 Addition Of Capacity/Connection Charges from Approved Contracts (7) 27 Total Net Present Value Capacity Charges - Sum of all Periods and Adjustm Capital Deductions: 28 Del Prado Plant Expansion to 7.5 MGD 29 Immediate Pump Station Improvements 30 Telemetry and Plant Computerized and Odor Control Improvements 31 Additional Field Crew and Instrumentation Technician Vehicles 32 Total Capital Deductions 33 Net Present Value of Capital Deductions 34 Total Net Present Value of Capital Deductions - Sum of all Periods Other Deductions: 35 Other Recognized Deductions 36 Financing Charges 2.50% 37 Total of Other Adjustments 38 Total Net Present Value Cash and Capacity/Connection Charges - 39 Sum of All Periods $ 11,076,988 $ 11,503,907 $ 11,875,557 $ 12,167,699 $ 12,459,841 $ 12,751,982 $ 12,951,041 $ 13,118,102 $ 13,267,387 $ 13,416,672 $ 13,532, ,076,988 11,503,907 11,875,557 12,167,699 12,459,841 12,751,982 12,951,041 13,118,102 13,267,387 13,416,672 13,532,021 3,713,668 3,783,369 3,849,502 4,061,874 3,971,303 4,025,687 4,076,143 4,126,698 4,328,602 4,224,284 4,260, , , , , , , , , , , , , , , , , , , , , , ,696 6,704,401 7,033,240 7,312,936 7,370,846 7,731,408 7,946,721 8,077,801 8,178,392 8,110,705 8,349,090 8,414,540 $ 4,115,921 $ 4,112,190 $ 4,072,116 $ 3,908,917 $ 3,904,886 $ 3,822,509 $ 3,700,534 $ 3,568,205 $ 3,370,165 $ 3,304,019 $ 3,171,352 3,713,668 3,783,369 3,849,502 4,061,874 3,971,303 4,025,687 4,076,143 4,126,698 4,328,602 4,224,284 4,260, , , , , , , , , , , ,696 6,704,401 7,033,240 7,312,936 7,370,846 7,731,408 7,946,721 8,077,801 8,178,392 8,110,705 8,349,090 8,414,540 $ 4,115,921 $ 4,112,190 $ 4,072,116 $ 3,908,917 $ 3,904,886 $ 3,822,509 $ 3,700,534 $ 3,568,205 $ 3,370,165 $ 3,304,019 $ 3,171, , ,210 89,535 $ 253,783 $ - $ - $ - $ - $ - $ - $ - $ - $ 61,818 $ 33,745 $ - $ - $ - $ 38,184,395 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 38,184,395 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 20,250,000 $ - $ - $ - $ - $ - $ - $ -

78 Table 11 Lee County, Florida Preliminary Financial Evaluation - North Fort Myers Utility Inc. Summary of Net Present Value of Utility System Cash Flow Page 3 of 3 DRAFT Line No. Utility System Cash Receipts 1 Water Rate Revenue (1) 2 Wastewater Rate Revenue (2) Other Operating Income (3) 3 Reclaimed Water Revenues 4 Bulk Wastewater Sales Revenues 5 Meter Turn-On/Turn-Off Charges 6 Septic Disposal Charges $ 558,311 $ 558,311 $ 558,311 $ 558,311 $ 558,311 $ 558,311 $ 558,311 $ 558,311 $ 558,311 12,040,526 12,119,424 12,198,322 12,277,221 12,356,119 12,435,017 12,513,915 12,592,813 12,671, , , , , , , , , , , , , , , , , , ,135 43,531 43,531 43,531 43,531 43,531 43,531 43,531 43,531 43, Total Utility System Revenues 8 Interest Income 9 Total Utility Cash Receipts - Operations 10 Direct Utility System Expenditures 11 Operating Expenses (4) 12 Capital Expenditures Funded from Operations (5) 13 Less Capital Expenditures Funded By the Company 14 Net Capital Expenditures Funded from Operations 15 Net Available for Acquisition and Debt Retirement of System 16 Net Present Value of Net Available (5) 5.00% 17 Total Gross Cash Net Present Value - Sum of All Periods 18 Total Utility System Expenditures 19 Operating Expenses (4) 20 Total System Capital Expenditures (5) 21 Net Available for Acquisition of System 22 Net Present Value of Net Available 5.00% 23 Total Net Cash Present Value - Sum of All Periods 24 Capacity/Connection Charges Applied to Capital Construction (6) 25 Net Present Value of Capacity/Connection Charges 5.00% 26 Addition Of Capacity/Connection Charges from Approved Contracts (7) 27 Total Net Present Value Capacity Charges - Sum of all Periods and Adjustm Capital Deductions: 28 Del Prado Plant Expansion to 7.5 MGD 29 Immediate Pump Station Improvements 30 Telemetry and Plant Computerized and Odor Control Improvements 31 Additional Field Crew and Instrumentation Technician Vehicles 32 Total Capital Deductions 33 Net Present Value of Capital Deductions 34 Total Net Present Value of Capital Deductions - Sum of all Periods Other Deductions: 35 Other Recognized Deductions 36 Financing Charges 2.50% 37 Total of Other Adjustments 38 Total Net Present Value Cash and Capacity/Connection Charges - 39 Sum of All Periods $ 13,647,369 $ 13,762,718 $ 13,878,066 $ 13,993,414 $ 14,108,763 $ 14,187,661 $ 14,266,559 $ 14,345,457 $ 14,424,355 13,647,369 13,762,718 13,878,066 13,993,414 14,108,763 14,187,661 14,266,559 14,345,457 14,424,355 4,292,391 4,314,476 4,488,008 4,358,483 4,380,528 4,402,631 4,421,980 4,589,228 4,453, , , , , , , , , , , , , , , , , , ,361 8,484,768 8,564,402 8,492,474 8,723,487 8,802,815 8,847,743 8,895,347 8,794,972 8,997,683 $ 3,045,543 $ 2,927,740 $ 2,764,906 $ 2,704,874 $ 2,599,496 $ 2,488,346 $ 2,382,604 $ 2,243,541 $ 2,185,954 4,292,391 4,314,476 4,488,008 4,358,483 4,380,528 4,402,631 4,421,980 4,589,228 4,453, , , , , , , , , ,361 8,484,768 8,564,402 8,492,474 8,723,487 8,802,815 8,847,743 8,895,347 8,794,972 8,997,683 $ 3,045,543 $ 2,927,740 $ 2,764,906 $ 2,704,874 $ 2,599,496 $ 2,488,346 $ 2,382,604 $ 2,243,541 $ 2,185,954 89,535 89,535 89,535 89,535 89,535 89,535 89,535 89,535 89,535 $ 32,138 $ 30,608 $ 29,150 $ 27,762 $ 26,440 $ 25,181 $ 23,982 $ 22,840 $ 21,752 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -

79 Table 12 Lee County, Florida Preliminary Financial Evaluation - North Fort Myers Utility Inc. Summary of Debt Service Capacity From Rates and Comparison to Net Present Value of Utility System Cash Flow - Lee County Rates Line For Fiscal Year For Fiscal Year No. Description System Revenues: 1 Water Rate Revenue $ 436,563 $ 436,563 2 Wastewater Rate Revenue 5,640,811 9,207,178 3 Other Operating Income 115, ,479 4 Total Utility System Revenues $ 6,192,597 $ 10,364,220 5 Interest Income Total System Revenues $ 6,192,597 $ 10,364,220 7 Operating Expenses 2,559,766 3,851,661 8 Net Operating Revenues Before Other Deductions $ 3,632,830 $ 6,512,559 Allowance for Other Deductions: 9 Renewal and Replacement Fund Deposit 309, , Meter Installation Cost General Plant / Vehicle Replacement Allowance 71,839 71, Debt Coverage Allowance for Financing 15.0% 424, , Net Annual Cash Flow for Acquisition / Additional Capital Fundin $ 2,827,271 $ 5,113, Estimated Principal Amount of Bonds Available for Issue $ 42,621,304 $ 77,093,274 Other Funding Sources 15 Cumulative Extension Fees $ 109,060 $ 14,092, Other Funds Total Available Funds For Disbursement $ 42,730,364 $ 91,185,954 Expenditures: 18 Deposit to Project Fund For Capital Deficiencies Bond Issue Costs 2.50% 1,065,533 1,927, Working Capital Deposit Debt Service Reserve Fund Deposit Yes 2,779, Net Available for Purchase $ 38,885,160 $ 89,258, Total Expenditures $ 42,730,364 $ 91,185, Net Present Value of Cash Flow 80,113,025 80,113,025 Estimated Debt Service Payment 25 Years Interest Rate 5.00% 5.00% 27 Annual Debt Service Payment - Interest Only -Yes or N Yes $ 4,005,651 0 $ 5,211,467

80 DRAFT Table 13 Comparable Sales Analysis of Florida Utilities North Fort Myers Utility, Inc. Comparable Sales Analysis - Development of Time-Adjusted Acquisition Prices Time Adjusted Line Year Acquisition Adjustment Purchase No. Name of Utility (Seller) Name of Utility (Buyer) Purchased Price Factor [1] Price 1 Kingsley Service Company Clay County 1992 $ 22,260,000 [2] 9.34% $24,338,342 2 Clay Utilities Co., d/b/a South Broward Utility, Inc. City of Sunrise ,300, % 12,610,370 3 Ortega Utility Company JEA (Duval County) ,180, % 7,441,831 4 AquaSource Utilities, Inc. (Rotonda System) Charlotte County ,300, % 21,040,273 5 IBSCO, Inc. Martin County ,000 [3] 3.65% 720,344 6 Gulf Utility Company Gulf Environmental Services Inc ,000, % 44,568,067 7 Florida Cities Water Company - Poinciana Utilities, Inc. Florida Governmental Utility Authority ,216, % 26,182,538 8 Florida Cities Water Company - Sarasota System Florida Governmental Utility Authority ,493, % 12,972,072 9 Florida Cities Water Company - North/South Ft. Myers Lee County ,859, % 133,794, Jillington Creek Platation (JCP) Utilities JEA ,856, % 19,578, Fisherman's Cove Utilities Martin County ,000, % 1,038, Spruce Creek South Utilities, Inc. Florida Water Services, Inc ,321,236 [4] 3.68% 7,590, Pinelake Village Martin County , % 165, United Water of Florida, Inc. JEA (Duval County) ,000, % 228,869, Regency Utilities Inc. JEA ,718, % 8,065, Decca Utilities Marion County ,915,000 [5] 4.51% 12,451, Florida Public Utilities Company City of Fernandina Beach ,355,070 [6] 4.47% 25,444, Florida Water Services, Inc. - Fox Run, Leliani Heights, and Fisherman's Haven (bundled purchase) Martin County ,350, % 2,455,123 Florida Water Services, Inc. - Beacon Hills, Woodmere, Palm Valley, Remington Forest (bundled purchase) JEA (Duval County) ,000, % 26,118, Florida Water Services Corporation - Palm Coast System City of Palm Coast ,772, % 86,475, Florida Water Services Corporation - Spring Hill System Hernando County ,574, % 37,165, Florida Water Services - Marco Island and Marco Shores Systems (bundled purchase) City of Marco Island ,313,143 [7] 4.47% 89,129, Florida Water Services Corporation - Citrus Florida Governmental Utility Authority ,548, % 17,288, Florida Water Services Corporation - Lehigh Florida Governmental Utility Authority ,596,839 [8] 4.47% 36,144, Realnor Hallandale Inc. City of Bonita Springs , % 522, Florida Water Services Corporation Nassau County ,200, % 17,969, Florida Water Services Corporation City of Groveland ,000, % 3,134, Florida Water Services Corporation Tohopekaliga Water Authority ,070, % 39,773, Florida Water Services Corporation Deltona ,478, % 62,139, Little Sumter Utility Company Village Center Community Development District ,837,006 [9] 4.47% 84,453, Florida Water Services Corporation Marion County ,350, % 23,349, Ocean City Utilities, Inc. Flagler County ,127, % 1,134, Burkim Enterprises, Inc. System Serving Snug Harbor Brevard County ,595, % 1,578, St. Johns Service Company St. Johns County ,800, % 26,251, Sky Acres Enterprises, Inc. / D.B.A Terrace Park Ventures Pasco County , % 10, East Pasco Utilities Pasco County ,850, % 2,977, Forest Hills Utilities Pasco County ,745, % 3,768, Intercoastal Utilities, Inc. St. Johns County ,500, % 24,119, Hudson Utilities Inc. Ni America Operating LLC ,600, % 5,513,013 Footnotes on Following Page

81 DRAFT Table 13 Comparable Sales Analysis of Florida Utilities North Fort Myers Utility, Inc. Comparable Sales Analysis - Development of Time-Adjusted Acquisition Prices Footnotes: [1] Adjustment to reflect inflationary effects upon purchase price less an allowance for depreciation of fixed assets. Inflation was based on construction cost index as published by the Engineering News Record (ENR). Index factors assume the change from June 1st of each year (midyear convention) and were determined as follows: ENR Less Adjusted Construction Percent Depreciation Percent Fiscal Year Cost Index Change Allowance [*] Change % 56.67% 11.04% % 53.33% 9.34% % 50.00% 5.64% % 46.67% 3.27% % 43.33% 4.89% % 40.00% 4.29% % 36.67% 2.52% % 33.33% 3.65% % 30.00% 3.83% % 26.67% 3.68% % 23.33% 4.51% % 20.00% 4.03% ` % 16.67% 4.47% % 13.33% 0.64% % 10.00% -1.05% % 6.67% -2.05% % 3.33% -1.55% % 0.00% 0.00% [*] Assumptions For Depreciation: Fixed Asset Lifespan (years): 30 Annual Deprecation (%): 3.33% [2] Purchase Price includes $11,500, of future Payments agreed to be paid in full upon addition of 525 ERCs from time of sale. [3] Purchase price included the requirement of the Seller to construct an interconnect to connect the purchased assets to the County system. Net purchase price determined as follows: Amount Cash at Closing $ 873,670 Cost of Interconnect Required of Seller (178,670) Net Purchase Price $ 695,000 [4] Purchase price included: i) cash payment at closing; ii) future payments for growth through 2005; and iii) a cash payment once a certain number of ERCs have been connected. Estimated purchase price determined as follows: Amount Notes Cash at Closing $ 5,500,480 Present Value of Futures Payments 1,263,709 Assume 200 ERCs at $1500 per ERC, discounted at 6% Present Value of Future Cash Payment 557,047 At 200 ERCs per year, reach 3,300 ERCs in year 17 Assumed Purchase Price of Utility $ 7,321,236 [5] Marion County ("the County") entered into agreement with Decca to make future payments past closing based on each new additional ERC that is connected to the Utility System. The County is required to pay Decca $500 per ERC (for all system ERCs) and make subsequent reimbursement payments of no less than $300, per annum to an aggregate maximum of $3,000, [6] Purchase price included: i) cash payment at closing; ii) future payments for growth through 2005; and iii) a cash payment once a certain number of ERCs have been connected. Estimated purchase price determined as follows: Amount Notes Cash at Closing $ 18,950,000 Present Value of Futures Payments 2,212,796 Assume 300 ERCs at $1500 per ERC for 6 years, discounted at 6% Present Value of Final Futures Payment 3,192,274 Difference between $7,500,000 and payments to date, discounted at 6% Assumed Purchase Price of Utility $ 24,355,070 [7] Acquisition price does not include amount due from buyer to seller for accounts receivables. Calculation is as follows: Amount Cash at Closing $ 86,613,143 Accounts Receivable (1,300,000) Net Purchase Price $ 85,313,143 [8] Acquisition price does not include amount due from buyer to seller for accounts receivables. Calculation is as follows: Amount Cash at Closing $ 35,433,538 Accounts Receivable (836,699) Net Purchase Price $ 34,596,839 [9] $21,206, of the Acquisition Price went to retiring the LSU Bonds. Also LSU deposited $2,160, to the construction fund when the Series 2003 Bonds were issued. ### The acquisition price is comprised of three components as follows: Utility System $ 318,380 Stabilization of Certain Roadways for Infrastructure 1,400,000 Reliquishment of Existing and Future Service Area Rights 3,156,620 Total $ 4,875,000

82 Table 14 Comparable Sales Analysis of Florida Utilities DRAFT North Fort Myers Utility, Inc. Comparable Sales Analysis - Allocation of Adjusted Purchase Price Adjusted Line System Purchase Net Utility Plant in Service [2] Percent of Total Allocated Purchase Price No. Type Price [1] Wastewater Water Wastewater Water Wastewater Name of Utility (Seller) Name of Purchaser Water Total 1 Kingsley Service Company Clay County W/S 24,338,342 $ 10,409,627 $ 16,511,793 $ 26,921,420 $ 38.67% 61.33% $9,411,637 $14,926,705 2 Clay Utilities Co., d/b/a South Broward Utility, Inc. City of Sunrise W/S 12,610,370 5,628,142 7,118,556 12,746, % 55.85% 5,567,478 7,042,892 3 Ortega Utility Company JEA (Duval County) W/S 7,441,831 1,841,216 2,514,599 4,355, % 57.73% 3,145,662 4,296,169 4 AquaSource Utilities, Inc. (Rotonda System) Charlotte County W/S 21,040,273 6,040,697 4,292,015 10,332, % 41.54% 12,300,144 8,740,130 5 IBSCO, Inc. Martin County W/S 720, , , , % 58.13% 301, ,736 6 Gulf Utility Company Gulf Environmental Services Inc. W/S 44,568,067 14,582,973 12,201,473 26,784, % 45.55% 24,267,312 20,300,754 7 Florida Cities Water Company - Poinciana Utilities, Inc. Florida Governmental Utility Authority W/S 26,182,538 11,487,925 25,698,063 37,185, % 69.11% 8,087,786 18,094,752 8 Florida Cities Water Company - Sarasota System Florida Governmental Utility Authority W/S 12,972,072 3,564,464 9,010,844 12,575, % 71.66% 3,676,285 9,295,787 9 Florida Cities Water Company - North/South Ft. Myers Lee County W/S 133,794,490 48,937,496 29,237,735 78,175, % 37.40% 83,755,351 50,039, Jillington Creek Platation (JCP) Utilities JEA W/S 19,578,353 2,889,354 10,946,421 13,835, % 79.12% 4,087,960 15,490, Fisherman's Cove Utilities Martin County W/S 1,038, , , , % 50.08% 518, , Spruce Creek South Utilities, Inc. Florida Water Services, Inc. W/S 7,590,901 3,803,821 3,776,259 7,580, % 49.82% 3,809,114 3,781, PinelakeVillage [3] MartinCounty W/S 165, , , , % 66.21% 56, , United Water of Florida, Inc. JEA (Duval County) W/S 228,869,600 65,472,778 92,902, ,375, % 58.66% 94,614, ,254, Regency Utilities Inc. JEA W/S 8,065,825 1,578,757 1,002,248 2,581, % 38.83% 4,933,865 3,131, Decca Utilities Marion County W/S 12,451,969 3,028,934 3,664,160 6,693, % 54.75% 5,634,516 6,817, Florida Public Utilities Company City of Fernandina Beach W/ 25,444,554 12,628,461-12,628, % 0.00% 25,444, Florida Water Services, Inc. - Fox Run, Leliani Heights, and Fisherman's Haven (bundled purchase) Martin County W/S 2,455, , ,117 1,552, % 47.94% 1,278,137 1,176, Florida Water Services, Inc. - Beacon Hills, Woodmere, Palm Valley, Remington Forest (bundled purchase) JEA (Duval County) W/S 26,118,333 8,328,753 7,324,916 15,653, % 46.79% 13,897,565 12,220, Florida Water Services Corporation - Palm Coast System City of Palm Coast W/S 86,475,643 40,183,812 42,285,349 82,469, % 51.27% 42,139,581 44,336, Florida Water Services Corporation - Spring Hill System Hernando County W/S 37,165,370 16,266,695 12,752,212 29,018, % 43.94% 20,834,906 16,330, Florida Water Services - Marco Island and Marco Shores Systems (bundled purchase) City of Marco Island W/S 89,129,484 55,824,637 19,636,613 75,461, % 26.02% 65,937,992 23,191, Florida Water Services Corporation - Citrus Florida Governmental Utility Authority W/S 17,288,599 18,562,596 8,715,866 27,278, % 31.95% 11,764,892 5,523, Florida Water Services Corporation - Lehigh Florida Governmental Utility Authority W/S 36,144,470 16,912,279 22,103,854 39,016, % 56.65% 15,668,628 20,475, Realnor Hallandale Inc. City of Bonita Springs S 522, , , % % - 522, Florida Water Services Corporation Nassau County W/S 17,969,413 3,406,231 5,205,212 8,611, % 60.45% 7,106,903 10,862, Florida Water Services Corporation City of Groveland W/S 3,134, , ,712 1,334, % 58.14% 1,311,976 1,822, Florida Water Services Corporation Tohopekaliga Water Authority W/S 39,773,870 7,981,329 11,151,305 19,132, % 58.28% 16,593,659 23,180, Florida Water Services Corporation Deltona W/S 62,139,435 18,023,008 10,516,040 28,539, % 36.85% 39,241,053 22,898, LittleSumter UtilityCompany [4] Village Center Community Development District W/S 84,453,114 13,715,781 18,338,027 32,053, % 57.21% 36,137,488 48,315, Florida Water Services Corporation Marion County W/S 23,349,790 16,702,713 8,655,941 25,358, % 34.13% 15,380,507 7,969, Ocean City Utilities, Inc. Flagler County W/S 1,134, , , , % 22.37% 880, , Burkim Enterprises, Inc. System Serving Snug Harbor Brevard County W/S 1,578, ,850 97, , % 24.36% 1,193, , St. Johns Service Company St. Johns County W/S 26,251,493 6,660,860 10,536,450 17,197, % 61.27% 10,167,203 16,084, Sky Acres Enterprises, Inc. / D.B.A Terrace Park Ventures Pasco County S 10,403-6,357 6, % % - 10, East Pasco Utilities Pasco County W/S 2,977, , , , % 32.45% 2,011, , Forest Hills Utilities Pasco County W/S 3,768, , , , % 55.97% 1,659,422 2,109, Intercoastal Utilities, Inc. St. Johns County W/S 24,119,433 7,233,854 10,102,309 17,336, % 58.27% 10,065,040 14,054, Hudson Utilities Inc. Ni America Operating LLC S 5,513,013-4,683,677 4,683, % % - 5,513,013 Footnotes: [1] Amounts shown derived from Table 13. [2] Based on information published by the respective utilities in the Annual Reports submitted to the regulatory agency and other available financial information. [3] Net Plant Utility calculated based on depreciated replacement cost. [4] $21,206, of the Acquisition Price went to retiring the LSU Bonds. Also LSU deposited $2,160, to the construction fund when the Series 2003 Bonds were issued.

83 Table 15 Comparable Sales Analysis of Florida Utilities DRAFT North Fort Myers Utility, Inc. Comparable Sales Analysis - Development of Purchase Price Per ERC Water System Wastewater System Line Allocated Allocated No. Name of Utility (Seller) Name of Purchaser Price [1] ERCs [2] Price/ERC Price [1] ERCs [2] Price/ERC Implied Price Based on ERCs (Meter Equivalents) Served 1 Kingsley Service Company Clay County $ 9,411,637 16,266 $579 $14,926,705 15, Clay Utilities Co., d/b/a South Broward Utility, Inc. City of Sunrise 5,567,478 2,924 1,904 7,042,892 2,330 3,023 3 Ortega Utility Company JEA (Duval County) 3,145,662 2,465 1,276 4,296,169 2,166 1,983 4 AquaSource Utilities, Inc. (Rotonda System) Charlotte County 12,300,144 3,685 3,338 8,740,130 3,246 2,693 5 IBSCO, Inc. Martin County 301, , ,185 6 Gulf Utility Company Gulf Environmental Services Inc. 24,267,312 8,382 2,895 20,300,754 3,826 5,306 7 Florida Cities Water Company - Poinciana Utilities, Inc. Florida Governmental Utility Authority 8,087,786 6,461 1,252 18,094,752 6,206 2,916 8 Florida Cities Water Company - Sarasota System [3] Florida Governmental Utility Authority 3,676,285 7, ,295,787 11, Florida Cities Water Company - North/South Ft. Myers Lee County 83,755,351 26,737 3,133 50,039,139 13,303 3, Jillington Creek Platation (JCP) Utilities JEA 4,087,960 1,591 2,569 15,490,393 1,382 11, Fisherman's Cove Utilities Martin County 518, , Spruce Creek South Utilities, Inc. Florida Water Services, Inc. 3,809,114 4, ,781,787 3,307 1, Pinelake Village Martin County 56, , United Water of Florida, Inc. JEA (Duval County) 94,614,693 53,929 1, ,254,907 38,820 3, Regency Utilities Inc. JEA 4,933,865 1,627 3,032 3,131,960 1,352 2, Decca Utilities Marion County 5,634,516 3,571 1,578 6,817,453 3,822 1, Florida Public Utilities Company City of Fernandina Beach 25,444,554 8,117 3, Florida Water Services, Inc. - Fox Run, Leliani Heights, and Fisherman's Haven (bundled purchase) Martin County 1,278, ,937 1,176, , Forest (bundled purchase) JEA (Duval County) 13,897,565 6,426 2,163 12,220,768 5,832 2, Florida Water Services Corporation - Palm Coast System City of Palm Coast 42,139,581 27,464 1,534 44,336,062 20,147 2, Florida Water Services Corporation - Spring Hill System Hernando County 20,834,906 34, ,330,463 8,021 2, Florida Water Services - Marco Island and Marco Shores Systems (bundled purchase) City of Marco Island 65,937,992 16,160 4,080 23,191,492 6,109 3, Florida Water Services Corporation - Citrus Florida Governmental Utility Authority 11,764,892 11,648 1,010 5,523,707 6, Florida Water Services Corporation - Lehigh Florida Governmental Utility Authority 15,668,628 11,460 1,367 20,475,843 8,427 2, Realnor Hallandale Inc. City of Bonita Springs , Florida Water Services Corporation Nassau County 7,106,903 2,319 3,065 10,862,510 2,142 5, Florida Water Services Corporation City of Groveland 1,311, ,622 1,822, , Florida Water Services Corporation Tohopekaliga Water Authority 16,593,659 13,149 1,262 23,180,212 8,422 2, Florida Water Services Corporation Deltona 39,241,053 32,614 1,203 22,898,382 5,975 3, Little Sumter Utility Company [4] Village Center Community Development District 36,137,488 10,755 3,360 48,315,627 8,854 5, Florida Water Services Corporation Marion County 15,380,507 9,706 1,585 7,969,283 6,561 1, Ocean City Utilities, Inc. Flagler County 880, , , Burkim Enterprises, Inc. System Serving Snug Harbor Brevard County 1,193, , , St. Johns Service Company St. Johns County 10,167,203 8,337 1,220 16,084,290 7,623 2, Sky Acres Enterprises, Inc. / D.B.A Terrace Park Ventures Pasco County , East Pasco Utilities Pasco County 2,011,294 1,727 1, ,196 1, Forest Hills Utilities Pasco County 1,659,422 2, ,109,422 1,204 1, Intercoastal Utilities, Inc. St. Johns County 10,065,040 6,849 1,470 14,054,394 5,482 2, Hudson Utilities Inc. Ni America Operating LLC ,513,013 2,978 1, Weighted Average Price per ERC 1,737 2, North Fort Myers Utility, Inc. - ERC (meter equivelents) 1,894 12, Implied Purchase Price per Utility System Component $ 3,289,893 $ 34,394, Total Implied Purchase Price - Combined Utility System Component $ 37,684,005 Footnotes: [1] Amounts derived from Table 14. [2] Based on information published by the respective utilities in the Annual Reports submitted to the regulatory agency and other available financial information. [3] The ERC calculations basis was derived by dividing base charge revenues by the base charge rate for each respective class. [4] $21,206, of the Acquisition Price went to retiring the LSU Bonds. Also LSU deposited $2,160, to the construction fund when the Series 2003 Bonds were issued.

84 Table 16 Comparable Sales Analysis of Florida Utilities DRAFT North Fort Myers Utility, Inc. Comparable Sales Analysis - Development of Implied Purchase Price - Net Investment Basis Water System Wastewater System Line Net Net Invest. to Net Net Invest. to No. Name of Utility (Seller) Name of Purchaser Alloc. Price Investment (1) Price Ratio Alloc. Price Investment (1) Price Ratio Implied Price Based on Net Investment 1 Kingsley Service Company Clay County $ 9,411,637 $ 10,409, % $ 14,926,705 $ 16,511, % 2 Clay Utilities Co., d/b/a South Broward Utility, Inc. City of Sunrise 5,567,478 5,628, % 7,042,892 7,118, % 3 Ortega Utility Company JEA (Duval County) 3,145,662 1,841, % 4,296,169 2,514, % 4 AquaSource Utilities, Inc. (Rotonda System) Charlotte County 12,300,144 6,040, % 8,740,130 4,292, % 5 IBSCO, Inc. Martin County 301, , % 418, , % 6 Gulf Utility Company Gulf Environmental Services Inc. 24,267,312 14,582, % 20,300,754 12,201, % 7 Florida Cities Water Company - Poinciana Utilities, Inc. Florida Governmental Utility Authority 8,087,786 11,487, % 18,094,752 25,698, % 8 Florida Cities Water Company - Sarasota System [2] Florida Governmental Utility Authority 3,676,285 3,564, % 9,295,787 9,010, % 9 Florida Cities Water Company - North/South Ft. Myers Lee County 83,755,351 48,937, % 50,039,139 29,237, % 10 Jillington Creek Platation (JCP) Utilities JEA 4,087,960 2,889, % 15,490,393 10,946, % 11 Fisherman's Cove Utilities Martin County 518, , % 519, , % 12 Spruce Creek South Utilities, Inc. Florida Water Services, Inc. 3,809,114 3,803, % 3,781,787 3,776, % 13 Pinelake Village Martin County 56, , % 109, , % 14 United Water of Florida, Inc. JEA (Duval County) 94,614,693 65,472, % 134,254,907 92,902, % 15 Regency Utilities Inc. JEA 4,933,865 1,578, % 3,131,960 1,002, % 16 Decca Utilities Marion County 5,634,516 3,028, % 6,817,453 3,664, % 17 Florida Public Utilities Company City of Fernandina Beach 25,444,554 12,628, % - - N/A Florida Water Services, Inc. - Fox Run, Leliani Heights, and Fisherman's Haven (bundled purchase) Martin County 1,278, , % 1,176, , % Florida Water Services, Inc. - Beacon Hills, Woodmere, Palm Valley, Remington Forest (bundled purchase) JEA (Duval County) 13,897,565 8,328, % 12,220,768 7,324, % 20 Florida Water Services Corporation - Palm Coast System City of Palm Coast 42,139,581 40,183, % 44,336,062 42,285, % 21 Florida Water Services Corporation - Spring Hill System Hernando County 20,834,906 16,266, % 16,330,463 12,752, % 22 Florida Water Services - Marco Island and Marco Shores Systems (bundled purchase) City of Marco Island 65,937,992 55,824, % 23,191,492 19,636, % 23 Florida Water Services Corporation - Citrus Florida Governmental Utility Authority 11,764,892 18,562, % 5,523,707 8,715, % 24 Florida Water Services Corporation - Lehigh Florida Governmental Utility Authority 15,668,628 16,912, % 20,475,843 22,103, % 25 Realnor Hallandale Inc. City of Bonita Springs - - N/A 522, , % 26 Florida Water Services Corporation Nassau County 7,106,903 3,406, % 10,862,510 5,205, % 27 Florida Water Services Corporation City of Groveland 1,311, , % 1,822, , % 28 Florida Water Services Corporation Tohopekaliga Water Authority 16,593,659 7,981, % 23,180,212 11,151, % 29 Florida Water Services Corporation Deltona 39,241,053 18,023, % 22,898,382 10,516, % 30 Little Sumter Utility Company Village Center Community Development District 36,137,488 13,715, % 48,315,627 18,338, % 31 Florida Water Services Corporation Marion County 15,380,507 16,702, % 7,969,283 8,655, % 32 Ocean City Utilities, Inc. Flagler County 880, , % 253, , % 33 Burkim Enterprises, Inc. System Serving Snug Harbor Brevard County 1,193, , % 384,462 97, % 34 St. Johns Service Company St. Johns County 10,167,203 6,660, % 16,084,290 10,536, % 35 Sky Acres Enterprises, Inc. / D.B.A Terrace Park Ventures Pasco County - - N/A 10,403 6, % 36 East Pasco Utilities Pasco County 2,011, , % 966, , % 37 Forest Hills Utilities Pasco County 1,659, , % 2,109, , % 38 Intercoastal Utilities, Inc. St. Johns County 10,065,040 7,233, % 14,054,394 10,102, % 39 Hudson Utilities Inc. Ni America Operating LLC - - N/A 5,513,013 4,683, % 40 Average Net Investment to Price Ratio % % 41 North Fort Myers Utility, Inc. - Net Investment $ 836,241 $ 39,856, Implied Purchase Price per Utility System Component $1,186,588 $55,306, Total Implied Price - Combined Utility System Component $ 56,492,813 Footnotes: [1] Amounts derived from Table 14. [2] The ERC calculations basis was derived by dividing base charge revenues by the base charge rate for each respective class.

85 DRAFT Table 17 Comparable Sales Analysis of Florida Utilities North Fort Myers Utility, Inc. Comparable Sales Analysis - Development of Time-Adjusted Acquisition Prices Time Adjusted Line Year Acquisition Adjustment Purchase No. Name of Utility (Seller) Name of Utility (Buyer) Purchased Price Factor [1] Price 1 Kingsley Service Company Clay County 1992 $ 22,260,000 [2] 9.34% $24,338,342 2 Clay Utilities Co., d/b/a South Broward Utility, Inc. City of Sunrise ,300, % 12,610,370 3 Ortega Utility Company JEA (Duval County) ,180, % 7,441,831 4 AquaSource Utilities, Inc. (Rotonda System) Charlotte County ,300, % 21,040,273 5 IBSCO, Inc. Martin County ,000 [3] 3.65% 720,344 6 Gulf Utility Company Gulf Environmental Services Inc ,000, % 44,568,067 7 Florida Cities Water Company - Poinciana Utilities, Inc. Florida Governmental Utility Authority ,216, % 26,182,538 8 Florida Cities Water Company - Sarasota System Florida Governmental Utility Authority ,493, % 12,972,072 9 Florida Cities Water Company - North/South Ft. Myers Lee County ,859, % 133,794, Jillington Creek Platation (JCP) Utilities JEA ,856, % 19,578, Fisherman's Cove Utilities Martin County ,000, % 1,038, Spruce Creek South Utilities, Inc. Florida Water Services, Inc ,321,236 [4] 3.68% 7,590, Pinelake Village Martin County , % 165, United Water of Florida, Inc. JEA (Duval County) ,000, % 228,869, Regency Utilities Inc. JEA ,718, % 8,065, Decca Utilities Marion County ,915,000 [5] 4.51% 12,451, Florida Public Utilities Company City of Fernandina Beach ,355,070 [6] 4.47% 25,444, Florida Water Services, Inc. - Fox Run, Leliani Heights, and Fisherman's Haven (bundled purchase) Martin County ,350, % 2,455,123 Florida Water Services, Inc. - Beacon Hills, Woodmere, Palm Valley, Remington Forest (bundled purchase) JEA (Duval County) ,000, % 26,118, Florida Water Services Corporation - Palm Coast System City of Palm Coast ,772, % 86,475, Florida Water Services Corporation - Spring Hill System Hernando County ,574, % 37,165, Florida Water Services - Marco Island and Marco Shores Systems (bundled purchase) City of Marco Island ,313,143 [7] 4.47% 89,129, Florida Water Services Corporation - Citrus Florida Governmental Utility Authority ,548, % 17,288, Florida Water Services Corporation - Lehigh Florida Governmental Utility Authority ,596,839 [8] 4.47% 36,144, Realnor Hallandale Inc. City of Bonita Springs , % 522, Florida Water Services Corporation Nassau County ,200, % 17,969, Florida Water Services Corporation City of Groveland ,000, % 3,134, Florida Water Services Corporation Tohopekaliga Water Authority ,070, % 39,773, Florida Water Services Corporation Deltona ,478, % 62,139, Little Sumter Utility Company Village Center Community Development District ,837,006 [9] 4.47% 84,453, Florida Water Services Corporation Marion County ,350, % 23,349, Ocean City Utilities, Inc. Flagler County ,127, % 1,134, Burkim Enterprises, Inc. System Serving Snug Harbor Brevard County ,595, % 1,578, St. Johns Service Company St. Johns County ,800, % 26,251, Sky Acres Enterprises, Inc. / D.B.A Terrace Park Ventures Pasco County , % 10, East Pasco Utilities Pasco County ,850, % 2,977, Forest Hills Utilities Pasco County ,745, % 3,768, Intercoastal Utilities, Inc. St. Johns County ,500, % 24,119, Hudson Utilities Inc. Ni America Operating LLC ,600, % 5,513,013 Footnotes on Following Page

86 DRAFT Table 17 Comparable Sales Analysis of Florida Utilities North Fort Myers Utility, Inc. Comparable Sales Analysis - Development of Time-Adjusted Acquisition Prices Footnotes: [1] Adjustment to reflect inflationary effects upon purchase price less an allowance for depreciation of fixed assets. Inflation was based on construction cost index as published by the Engineering News Record (ENR). Index factors assume the change from June 1st of each year (midyear convention) and were determined as follows: ENR Less Adjusted Construction Percent Depreciation Percent Fiscal Year Cost Index Change Allowance [*] Change % 56.67% 11.04% % 53.33% 9.34% % 50.00% 5.64% % 46.67% 3.27% % 43.33% 4.89% % 40.00% 4.29% % 36.67% 2.52% % 33.33% 3.65% % 30.00% 3.83% % 26.67% 3.68% % 23.33% 4.51% % 20.00% 4.03% ` % 16.67% 4.47% % 13.33% 0.64% % 10.00% -1.05% % 6.67% -2.05% % 3.33% -1.55% % 0.00% 0.00% [*] Assumptions For Depreciation: Fixed Asset Lifespan (years): 30 Annual Deprecation (%): 3.33% [2] Purchase Price includes $11,500, of future Payments agreed to be paid in full upon addition of 525 ERCs from time of sale. [3] Purchase price included the requirement of the Seller to construct an interconnect to connect the purchased assets to the County system. Net purchase price determined as follows: Amount Cash at Closing $ 873,670 Cost of Interconnect Required of Seller (178,670) Net Purchase Price $ 695,000 [4] Purchase price included: i) cash payment at closing; ii) future payments for growth through 2005; and iii) a cash payment once a certain number of ERCs have been connected. Estimated purchase price determined as follows: Amount Notes Cash at Closing $ 5,500,480 Present Value of Futures Payments 1,263,709 Assume 200 ERCs at $1500 per ERC, discounted at 6% Present Value of Future Cash Payment 557,047 At 200 ERCs per year, reach 3,300 ERCs in year 17 Assumed Purchase Price of Utility $ 7,321,236 [5] Marion County ("the County") entered into agreement with Decca to make future payments past closing based on each new additional ERC that is connected to the Utility System. The County is required to pay Decca $500 per ERC (for all system ERCs) and make subsequent reimbursement payments of no less than $300, per annum to an aggregate maximum of $3,000, [6] Purchase price included: i) cash payment at closing; ii) future payments for growth through 2005; and iii) a cash payment once a certain number of ERCs have been connected. Estimated purchase price determined as follows: Amount Notes Cash at Closing $ 18,950,000 Present Value of Futures Payments 2,212,796 Assume 300 ERCs at $1500 per ERC for 6 years, discounted at 6% Present Value of Final Futures Payment 3,192,274 Difference between $7,500,000 and payments to date, discounted at 6% Assumed Purchase Price of Utility $ 24,355,070 [7] Acquisition price does not include amount due from buyer to seller for accounts receivables. Calculation is as follows: Amount Cash at Closing $ 86,613,143 Accounts Receivable (1,300,000) Net Purchase Price $ 85,313,143 [8] Acquisition price does not include amount due from buyer to seller for accounts receivables. Calculation is as follows: Amount Cash at Closing $ 35,433,538 Accounts Receivable (836,699) Net Purchase Price $ 34,596,839 [9] $21,206, of the Acquisition Price went to retiring the LSU Bonds. Also LSU deposited $2,160, to the construction fund when the Series 2003 Bonds were issued. ### The acquisition price is comprised of three components as follows: Utility System $ 318,380 Stabilization of Certain Roadways for Infrastructure 1,400,000 Reliquishment of Existing and Future Service Area Rights 3,156,620 Total $ 4,875,000

87 Table 18 Comparable Sales Analysis of Florida Utilities DRAFT North Fort Myers Utility, Inc. Comparable Sales Analysis - Allocation of Adjusted Purchase Price Adjusted Line System Purchase Net Utility Plant in Service [2] Percent of Total Allocated Purchase Price No. Type Price [1] Wastewater Water Wastewater Water Wastewater Name of Utility (Seller) Name of Purchaser Water Total 1 Kingsley Service Company Clay County W/S 24,338,342 $ 10,409,627 $ 16,511,793 $ 26,921,420 $ 38.67% 61.33% $9,411,637 $14,926,705 2 Clay Utilities Co., d/b/a South Broward Utility, Inc. City of Sunrise W/S 12,610,370 5,628,142 7,118,556 12,746, % 55.85% 5,567,478 7,042,892 3 Ortega Utility Company JEA (Duval County) W/S 7,441,831 1,841,216 2,514,599 4,355, % 57.73% 3,145,662 4,296,169 4 AquaSource Utilities, Inc. (Rotonda System) Charlotte County W/S 21,040,273 6,040,697 4,292,015 10,332, % 41.54% 12,300,144 8,740,130 5 IBSCO, Inc. Martin County W/S 720, , , , % 58.13% 301, ,736 6 Gulf Utility Company Gulf Environmental Services Inc. W/S 44,568,067 14,582,973 12,201,473 26,784, % 45.55% 24,267,312 20,300,754 7 Florida Cities Water Company - Poinciana Utilities, Inc. Florida Governmental Utility Authority W/S 26,182,538 11,487,925 25,698,063 37,185, % 69.11% 8,087,786 18,094,752 8 Florida Cities Water Company - Sarasota System Florida Governmental Utility Authority W/S 12,972,072 3,564,464 9,010,844 12,575, % 71.66% 3,676,285 9,295,787 9 Florida Cities Water Company - North/South Ft. Myers Lee County W/S 133,794,490 48,937,496 29,237,735 78,175, % 37.40% 83,755,351 50,039, Jillington Creek Platation (JCP) Utilities JEA W/S 19,578,353 2,889,354 10,946,421 13,835, % 79.12% 4,087,960 15,490, Fisherman's Cove Utilities Martin County W/S 1,038, , , , % 50.08% 518, , Spruce Creek South Utilities, Inc. Florida Water Services, Inc. W/S 7,590,901 3,803,821 3,776,259 7,580, % 49.82% 3,809,114 3,781, PinelakeVillage [3] MartinCounty W/S 165, , , , % 66.21% 56, , United Water of Florida, Inc. JEA (Duval County) W/S 228,869,600 65,472,778 92,902, ,375, % 58.66% 94,614, ,254, Regency Utilities Inc. JEA W/S 8,065,825 1,578,757 1,002,248 2,581, % 38.83% 4,933,865 3,131, Decca Utilities Marion County W/S 12,451,969 3,028,934 3,664,160 6,693, % 54.75% 5,634,516 6,817, Florida Public Utilities Company City of Fernandina Beach W/ 25,444,554 12,628,461-12,628, % 0.00% 25,444, Florida Water Services, Inc. - Fox Run, Leliani Heights, and Fisherman's Haven (bundled purchase) Martin County W/S 2,455, , ,117 1,552, % 47.94% 1,278,137 1,176, Florida Water Services, Inc. - Beacon Hills, Woodmere, Palm Valley, Remington Forest (bundled purchase) JEA (Duval County) W/S 26,118,333 8,328,753 7,324,916 15,653, % 46.79% 13,897,565 12,220, Florida Water Services Corporation - Palm Coast System City of Palm Coast W/S 86,475,643 40,183,812 42,285,349 82,469, % 51.27% 42,139,581 44,336, Florida Water Services Corporation - Spring Hill System Hernando County W/S 37,165,370 16,266,695 12,752,212 29,018, % 43.94% 20,834,906 16,330, Florida Water Services - Marco Island and Marco Shores Systems (bundled purchase) City of Marco Island W/S 89,129,484 55,824,637 19,636,613 75,461, % 26.02% 65,937,992 23,191, Florida Water Services Corporation - Citrus Florida Governmental Utility Authority W/S 17,288,599 18,562,596 8,715,866 27,278, % 31.95% 11,764,892 5,523, Florida Water Services Corporation - Lehigh Florida Governmental Utility Authority W/S 36,144,470 16,912,279 22,103,854 39,016, % 56.65% 15,668,628 20,475, Realnor Hallandale Inc. City of Bonita Springs S 522, , , % % - 522, Florida Water Services Corporation Nassau County W/S 17,969,413 3,406,231 5,205,212 8,611, % 60.45% 7,106,903 10,862, Florida Water Services Corporation City of Groveland W/S 3,134, , ,712 1,334, % 58.14% 1,311,976 1,822, Florida Water Services Corporation Tohopekaliga Water Authority W/S 39,773,870 7,981,329 11,151,305 19,132, % 58.28% 16,593,659 23,180, Florida Water Services Corporation Deltona W/S 62,139,435 18,023,008 10,516,040 28,539, % 36.85% 39,241,053 22,898, LittleSumter UtilityCompany [4] Village Center Community Development District W/S 84,453,114 13,715,781 18,338,027 32,053, % 57.21% 36,137,488 48,315, Florida Water Services Corporation Marion County W/S 23,349,790 16,702,713 8,655,941 25,358, % 34.13% 15,380,507 7,969, Ocean City Utilities, Inc. Flagler County W/S 1,134, , , , % 22.37% 880, , Burkim Enterprises, Inc. System Serving Snug Harbor Brevard County W/S 1,578, ,850 97, , % 24.36% 1,193, , St. Johns Service Company St. Johns County W/S 26,251,493 6,660,860 10,536,450 17,197, % 61.27% 10,167,203 16,084, Sky Acres Enterprises, Inc. / D.B.A Terrace Park Ventures Pasco County S 10,403-6,357 6, % % - 10, East Pasco Utilities Pasco County W/S 2,977, , , , % 32.45% 2,011, , Forest Hills Utilities Pasco County W/S 3,768, , , , % 55.97% 1,659,422 2,109, Intercoastal Utilities, Inc. St. Johns County W/S 24,119,433 7,233,854 10,102,309 17,336, % 58.27% 10,065,040 14,054, Hudson Utilities Inc. Ni America Operating LLC S 5,513,013-4,683,677 4,683, % % - 5,513,013 Footnotes: [1] Amounts shown derived from Table 17. [2] Based on information published by the respective utilities in the Annual Reports submitted to the regulatory agency and other available financial information. [3] Net Plant Utility calculated based on depreciated replacement cost. [4] $21,206, of the Acquisition Price went to retiring the LSU Bonds. Also LSU deposited $2,160, to the construction fund when the Series 2003 Bonds were issued.

88 Table 19 Comparable Sales Analysis of Florida Utilities DRAFT North Fort Myers Utility, Inc. Comparable Sales Analysis - Development of Purchase Price Per ERC Water System Wastewater System Line Allocated Allocated No. Name of Utility (Seller) Name of Purchaser Price [1] ERCs [2] Price/ERC Price [1] ERCs [2] Price/ERC Implied Price Based on ERCs (Meter Equivalents) Served 1 Kingsley Service Company Clay County $ 9,411,637 16,266 $579 $14,926,705 15, Clay Utilities Co., d/b/a South Broward Utility, Inc. City of Sunrise 5,567,478 2,924 1,904 7,042,892 2,330 3,023 3 Ortega Utility Company JEA (Duval County) 3,145,662 2,465 1,276 4,296,169 2,166 1,983 4 AquaSource Utilities, Inc. (Rotonda System) Charlotte County 12,300,144 3,685 3,338 8,740,130 3,246 2,693 5 IBSCO, Inc. Martin County 301, , ,185 6 Gulf Utility Company Gulf Environmental Services Inc. 24,267,312 8,382 2,895 20,300,754 3,826 5,306 7 Florida Cities Water Company - Poinciana Utilities, Inc. Florida Governmental Utility Authority 8,087,786 6,461 1,252 18,094,752 6,206 2,916 8 Florida Cities Water Company - Sarasota System [3] Florida Governmental Utility Authority 3,676,285 7, ,295,787 11, Florida Cities Water Company - North/South Ft. Myers Lee County 83,755,351 26,737 3,133 50,039,139 13,303 3, Jillington Creek Platation (JCP) Utilities JEA 4,087,960 1,591 2,569 15,490,393 1,382 11, Fisherman's Cove Utilities Martin County 518, , Spruce Creek South Utilities, Inc. Florida Water Services, Inc. 3,809,114 4, ,781,787 3,307 1, Pinelake Village Martin County 56, , United Water of Florida, Inc. JEA (Duval County) 94,614,693 53,929 1, ,254,907 38,820 3, Regency Utilities Inc. JEA 4,933,865 1,627 3,032 3,131,960 1,352 2, Decca Utilities Marion County 5,634,516 3,571 1,578 6,817,453 3,822 1, Florida Public Utilities Company City of Fernandina Beach 25,444,554 8,117 3, Florida Water Services, Inc. - Fox Run, Leliani Heights, and Fisherman's Haven (bundled purchase) Martin County 1,278, ,937 1,176, , Forest (bundled purchase) JEA (Duval County) 13,897,565 6,426 2,163 12,220,768 5,832 2, Florida Water Services Corporation - Palm Coast System City of Palm Coast 42,139,581 27,464 1,534 44,336,062 20,147 2, Florida Water Services Corporation - Spring Hill System Hernando County 20,834,906 34, ,330,463 8,021 2, Florida Water Services - Marco Island and Marco Shores Systems (bundled purchase) City of Marco Island 65,937,992 16,160 4,080 23,191,492 6,109 3, Florida Water Services Corporation - Citrus Florida Governmental Utility Authority 11,764,892 11,648 1,010 5,523,707 6, Florida Water Services Corporation - Lehigh Florida Governmental Utility Authority 15,668,628 11,460 1,367 20,475,843 8,427 2, Realnor Hallandale Inc. City of Bonita Springs , Florida Water Services Corporation Nassau County 7,106,903 2,319 3,065 10,862,510 2,142 5, Florida Water Services Corporation City of Groveland 1,311, ,622 1,822, , Florida Water Services Corporation Tohopekaliga Water Authority 16,593,659 13,149 1,262 23,180,212 8,422 2, Florida Water Services Corporation Deltona 39,241,053 32,614 1,203 22,898,382 5,975 3, Little Sumter Utility Company [4] Village Center Community Development District 36,137,488 10,755 3,360 48,315,627 8,854 5, Florida Water Services Corporation Marion County 15,380,507 9,706 1,585 7,969,283 6,561 1, Ocean City Utilities, Inc. Flagler County 880, , , Burkim Enterprises, Inc. System Serving Snug Harbor Brevard County 1,193, , , St. Johns Service Company St. Johns County 10,167,203 8,337 1,220 16,084,290 7,623 2, Sky Acres Enterprises, Inc. / D.B.A Terrace Park Ventures Pasco County , East Pasco Utilities Pasco County 2,011,294 1,727 1, ,196 1, Forest Hills Utilities Pasco County 1,659,422 2, ,109,422 1,204 1, Intercoastal Utilities, Inc. St. Johns County 10,065,040 6,849 1,470 14,054,394 5,482 2, Hudson Utilities Inc. Ni America Operating LLC ,513,013 2,978 1, Weighted Average Price per ERC 1,737 2, North Fort Myers Utility, Inc. - ERC (meter equivelents) 1,894 26, Implied Purchase Price per Utility System Component $ 3,289,893 $ 70,455, Total Implied Purchase Price - Combined Utility System Component $ 73,744,921 Footnotes: [1] Amounts derived from Table 18. [2] Based on information published by the respective utilities in the Annual Reports submitted to the regulatory agency and other available financial information. [3] The ERC calculations basis was derived by dividing base charge revenues by the base charge rate for each respective class. [4] $21,206, of the Acquisition Price went to retiring the LSU Bonds. Also LSU deposited $2,160, to the construction fund when the Series 2003 Bonds were issued.

89 Table 20 Comparable Sales Analysis of Florida Utilities DRAFT North Fort Myers Utility, Inc. Comparable Sales Analysis - Development of Implied Purchase Price - Net Investment Basis Water System Wastewater System Line Net Net Invest. to Net Net Invest. to No. Name of Utility (Seller) Name of Purchaser Alloc. Price Investment (1) Price Ratio Alloc. Price Investment (1) Price Ratio Implied Price Based on Net Investment 1 Kingsley Service Company Clay County $ 9,411,637 $ 10,409, % $ 14,926,705 $ 16,511, % 2 Clay Utilities Co., d/b/a South Broward Utility, Inc. City of Sunrise 5,567,478 5,628, % 7,042,892 7,118, % 3 Ortega Utility Company JEA (Duval County) 3,145,662 1,841, % 4,296,169 2,514, % 4 AquaSource Utilities, Inc. (Rotonda System) Charlotte County 12,300,144 6,040, % 8,740,130 4,292, % 5 IBSCO, Inc. Martin County 301, , % 418, , % 6 Gulf Utility Company Gulf Environmental Services Inc. 24,267,312 14,582, % 20,300,754 12,201, % 7 Florida Cities Water Company - Poinciana Utilities, Inc. Florida Governmental Utility Authority 8,087,786 11,487, % 18,094,752 25,698, % 8 Florida Cities Water Company - Sarasota System [2] Florida Governmental Utility Authority 3,676,285 3,564, % 9,295,787 9,010, % 9 Florida Cities Water Company - North/South Ft. Myers Lee County 83,755,351 48,937, % 50,039,139 29,237, % 10 Jillington Creek Platation (JCP) Utilities JEA 4,087,960 2,889, % 15,490,393 10,946, % 11 Fisherman's Cove Utilities Martin County 518, , % 519, , % 12 Spruce Creek South Utilities, Inc. Florida Water Services, Inc. 3,809,114 3,803, % 3,781,787 3,776, % 13 Pinelake Village Martin County 56, , % 109, , % 14 United Water of Florida, Inc. JEA (Duval County) 94,614,693 65,472, % 134,254,907 92,902, % 15 Regency Utilities Inc. JEA 4,933,865 1,578, % 3,131,960 1,002, % 16 Decca Utilities Marion County 5,634,516 3,028, % 6,817,453 3,664, % 17 Florida Public Utilities Company City of Fernandina Beach 25,444,554 12,628, % - - N/A Florida Water Services, Inc. - Fox Run, Leliani Heights, and Fisherman's Haven (bundled purchase) Martin County 1,278, , % 1,176, , % Florida Water Services, Inc. - Beacon Hills, Woodmere, Palm Valley, Remington Forest (bundled purchase) JEA (Duval County) 13,897,565 8,328, % 12,220,768 7,324, % 20 Florida Water Services Corporation - Palm Coast System City of Palm Coast 42,139,581 40,183, % 44,336,062 42,285, % 21 Florida Water Services Corporation - Spring Hill System Hernando County 20,834,906 16,266, % 16,330,463 12,752, % 22 Florida Water Services - Marco Island and Marco Shores Systems (bundled purchase) City of Marco Island 65,937,992 55,824, % 23,191,492 19,636, % 23 Florida Water Services Corporation - Citrus Florida Governmental Utility Authority 11,764,892 18,562, % 5,523,707 8,715, % 24 Florida Water Services Corporation - Lehigh Florida Governmental Utility Authority 15,668,628 16,912, % 20,475,843 22,103, % 25 Realnor Hallandale Inc. City of Bonita Springs - - N/A 522, , % 26 Florida Water Services Corporation Nassau County 7,106,903 3,406, % 10,862,510 5,205, % 27 Florida Water Services Corporation City of Groveland 1,311, , % 1,822, , % 28 Florida Water Services Corporation Tohopekaliga Water Authority 16,593,659 7,981, % 23,180,212 11,151, % 29 Florida Water Services Corporation Deltona 39,241,053 18,023, % 22,898,382 10,516, % 30 Little Sumter Utility Company Village Center Community Development District 36,137,488 13,715, % 48,315,627 18,338, % 31 Florida Water Services Corporation Marion County 15,380,507 16,702, % 7,969,283 8,655, % 32 Ocean City Utilities, Inc. Flagler County 880, , % 253, , % 33 Burkim Enterprises, Inc. System Serving Snug Harbor Brevard County 1,193, , % 384,462 97, % 34 St. Johns Service Company St. Johns County 10,167,203 6,660, % 16,084,290 10,536, % 35 Sky Acres Enterprises, Inc. / D.B.A Terrace Park Ventures Pasco County - - N/A 10,403 6, % 36 East Pasco Utilities Pasco County 2,011, , % 966, , % 37 Forest Hills Utilities Pasco County 1,659, , % 2,109, , % 38 Intercoastal Utilities, Inc. St. Johns County 10,065,040 7,233, % 14,054,394 10,102, % 39 Hudson Utilities Inc. Ni America Operating LLC - - N/A 5,513,013 4,683, % 40 Average Net Investment to Price Ratio % % 41 North Fort Myers Utility, Inc. - Net Investment $ 213,112 $ 39,734, Implied Purchase Price per Utility System Component $302,396 $55,136, Total Implied Price - Combined Utility System Component $ 55,438,785 Footnotes: [1] Amounts derived from Table 18. [2] The ERC calculations basis was derived by dividing base charge revenues by the base charge rate for each respective class.

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