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<br />\ ~' '" <br /> <br />Stromberger Land & Cattle Company LLC <br />November 25-26, 2002 <br /> <br />Agenda Item 20b <br /> <br />while shown in the weak category, are representative costs of providing pressurized irrigation water <br />to the land. <br /> <br />Table 2. Financial Ratios <br /> <br />Financial Ratio Without With project <br /> the project Future Years <br /> (Aver. 2001-02) <br />Operating Ratio (revenue/expense) <br />weak: less than 100% 134% 132% <br />average: 100% - 120% (strong) (strong) <br />stronQ: Qreater than 120% <br />Debit Service Coverage Ratio <br />(revenues-expenses)/debt service 210% 170% <br />weak: less than 100% (strong) (strong) <br />average: 100% - 125% <br />stronQ: Qreater than 125% <br />Cash Reserves to Current Expense <br />weak: less than 50% 15% 10% <br />average: 50% - 100% (weak) (weak) <br />strona: greater than 100% <br />Annual Operating Cost per Acre-Ft. <br />weak: greater than $20 $28 $24 <br />average: $10 - $20 (weak) (weak) <br />strona: less than $10 . <br /> <br />As security for the loan the SLCC will pledge a security interest in real estate. Premier Farm Credit <br />in Sterling has indicated that SLCC farmland would be valued at $1600-1800 per irrigated acre. <br />Also, Premier Farm Credit has indicated that it would be willing to release or subordinate sufficient <br />land from its loan collateral to cover the CWCB loan. To secure the $414,000 loan, approximately <br />260 acres would be needed as collateral. This collateral would be in compliance with CWCB Loan <br />Policy #5 (Collateral) <br /> <br />Recommendation <br /> <br />Staff recommends a CWCB Small Project Loan not to exceed $414,000 to the Stromberger Land & <br />Cattle Company from the Construction Fund to construct a system of recharge ponds and wells to <br />replace out-of-priority irrigation well depletions. The recommended term of the loan is 20 years and <br />the recommended lending rate is 2.5% per year. Security for the loan will be SLCC real estate with a <br />total collateral value of $414,000. The real estate value will be supported by an opinion of value from <br />a certified appraiser, and all necessary permits and easements must be obtained. <br /> <br />Staff further recommends that final approval of the loan be conditioned upon all other standard <br />contracting provisions of th~ CWCB. <br /> <br />cc: Brad Strom berger, Partner, Stromberger Land & Cattle Company. <br />Linda Bassi, AGO <br /> <br />Attachment <br /> <br />Action Taken bv the CWCS on November 26. 2002 <br />The CWCB approved the Staff Recommendation. <br /> <br />Page 4 of 5 <br />