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<br />Smart Bros. Inc. <br />July 20-21, 2004 <br /> <br />Agenda Item 14a <br /> <br />Collateral - As security for the loan the 5BI will pledge a first lien security interest in real estate, <br />located in the 5E % of Sec. 16, T6N, R53W. The property consists of approximately 160 acres, <br />less a 2-3 acre homesite, with 135 acres irrigated with a pivot sprinkler and one well. The land is <br />currently being used as loan collateral with Premier Farm Credit in Fort Morgan, but will be <br />released, based on discussions with Mike Grauberger, Assistant Vice President, to be used for <br />collateral for the CWCB loan. Based on discussions with Premier Farm Credit, the estimated value <br />of the irrigated land is $1800 per acre. The estimated collateral value would be $243,000 (135 ac. x <br />$1800 per acre.) <br /> <br />During the contract process, supporting documentation of land values, based on the current land <br />use, will be submitted by a Colorado Certified General Appraiser. The collateral will be in <br />compliance with CWCB Loan Policy #5 (Collateral). <br /> <br />Recommendation <br /> <br />Staff recommends a loan not to exceed $242,248 ($239,850 for project costs and $2,398 for the 1 % <br />Loan Service Fee in accordance with CWCB Loan Policy #16), to Smart Brothers, Inc. from the <br />Severance Tax Trust Fund Perpetual Base Account, to enhance and expand an existing <br />groundwaterrecharge project for well augmentation. The recommended terms of the loan are 30 <br />years at 2.5% per annum. Security for the loan will be a first lien on real estate with a total value <br />equal to or greater than the CWCB loan amount, including water rights, or an interest in the project <br />being financed, sufficient to cover the augmentation requirements of the well being provided with <br />the collateral land. <br /> <br />Staff further recommends that final approval of the loan be conditioned upon all other standard <br />contracting provisions of the CWCS. <br /> <br />cc: Carson Smart, Secretary/Treasurer, Smart Brothers, Inc. <br />Brent Nation, P.E., Fort Morgan <br />Linda Bassi, AGO <br /> <br />Attachment <br /> <br />Action Taken bv the CWCS on Julv 21. 2004 <br /> <br />The CWCB approved the Staff Recommendation, with the additional provision as shown in italics <br />above regarding security. <br /> <br />Page 5 of 6 <br />