C150191 Approval letter

• Contract/PO #: C150191
• Contractor Name: Buffalo Farms Water Development, LLC
• Contract Type: Loan
• Water District: 64
• County: Logan
• Loan Projects - Doc Type: Approval Letter

.

Table 2 shows the combined Financial Ratios for the Company and indicates an average ability
to repay the $277,245 CWCB loan.

Table 2. Financial Ratios
Financial Ratio With Amended
the Droiect Droiect
Operating Ratio (revenue/expense) 178% 206%
weak: less than 100% (strong) (strong) I
average: 100% - 120%
strono: oreaterthan 120% I
Debt Service Coverage Ratio 102% 100%
(revenues-expenses )/debt service (average) (average)
weak: less than 100%
average: 100% - 125%
strona: areater than 125%
Cash Reserves to Current Expense 8% 10% I
weak: less than 50% (weak) (weak)
average: 50% - 100%
strong: greater than 100%
Annual Cost per Ac-Ft diverted (8,000 ac-ft) $38 $44 I
weak: greater than $20 (strong) (strong) I
average: $10 - $20 I
strong: less than $10 i

As security for the original loan amount of $195,435 the Company pledged 130 acres of irrigate~
land, including all above ground improvements, at an appraised value of $231,000. In addition, a~l
owners within the Company have personally, jointly and severally guaranteed repayment of thp
~~ I
I
In accordance with CWCB Policy No.5, real property collateral will be required in the amount qf
I
110% of the loan amount for this project. The amended loan amount will be $277,245, whicl1
requires a minimum security amount of $304,970. As additional security for the requested 10~
increase the Company is pledging a first lien interest in real estate, located in Section 26, Townshi
6 North, Range 54 West. The property consists of 5-acres with a 1,500 square foot modular hom ,
located within the augmentation project area. The estimated market value of the property ~s
$80,000. The additional collateral will give the Company a total pledged collateral amount ~f
$311,000 for the project, which exceeds the collateral requirement of CWCB Policy No.5. :
i
I
I
During the contract amendment process, the Company will be required to submit documentation qf
the value of the 5-acre parcel, with improvements, by a Colorado Certified General Appraiser. ~f
the appraised value does not meet or exceed the requirements of Policy No.5, the Company will ble
required to pledge additional collateral. The owner's personal guarantee to repay the loan will sti~l
~~ I
I
i

STAFF RECOMMENDATION: I
I
Staff recommends that the Board approve an increase of $81,810 ($81,000 for project costs ~
$810 for the 1% Loan Service Fee, in accordance with CWCB Loan Policy No. 16) from the
Severance Tax Trust Fund Perpetual Base Account. The additional $81,810 of funding would ~e
for 20-years at the present lending rate of 2.25%. Security for the loan will be collateral iP
accordance with CWCB loan policy #5 (a first lien on real estate with a total value equal to qr
greater than the CWCB loan amount and a personal guarantee by each ofthe owners). I
I
I
I
Staff further recommends that final approval of the loan be conditioned upon all standarq-
I
contracting provisions of the CWCB. i
I
i
I

I

3