C150024 Approval Letter - Laserfiche WebLink

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...;~. . ~" . . ., As mentioned above, water is used by the shareholders for agricultural purposes. The SIC appears to qualify for the CWCB Agricultural Lending rate. UThe SIC has no existing debl. Income to repay the CWCB loan will come from an assessment increaSe~f $13.39 per share. per year. This additional assessment adds only $0.73 to the cost of delivering one acre- fool. The SIC has the legal ability to enforce payment of assessments. - As security for the loan the SIC will pledge revenues from assessments, as well as one payment in a certificate of deposit account to be held by the State Treasurer. Recommendation Staff recommends a loan not to exceed $318,583 to the Sterling Irrigation Company for 90% of the costs to rehabilitate the Company's diversion and headgate structures on the South Plalle River. The recommended term of the loan is 30 years and the lending rate would be that rate approved by the Board for Agricultural borrowers in 1999. As security for the loan, the Sterling Irrigation Company will pledge revenues from assessments as well as a certificate of deposit in amount of one annual payment. Staff further recommends that fmal approval of the loan be conditioned upon acceptance of the project and the associated fmancial obligations by a vote of the shareholders of the Company. Action Taken bv the CWCB 11/24/98 The CWCB approved the staff recommendation, and required that the SIC officially raise its assessments, as outlined in the feasibility study, before the loan contract is signed. As part of the discussion, the CWCB requested the AGO determine whether a Mutual Irrigation Company can use water rights (for which shares have been issued) as collateral for a CWCB loan. cc: Kenneth Gareis, President Sterling Irrigation Company Jack Odor, P.E. Linda Bassi, AGO Allaclunent C:\WP51\Proj-New\Sterlinglrrigation 1 1 98memo L:\boardmem\nov98\24bNov98 Memo updated 11/25/98 3