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<br />Guenzi Fanns <br />May 24-27,2004 <br /> <br />Agenda Item 21 a <br /> <br />Collateral - As security for the loan the Guenzis will pledge a first lien security interest in real estate. <br />The proposed collateral is as follows: <br /> <br />1) Hettinger Farm Recharge Land - This consists of 100 acres of dryland pasture with the 3 <br />existing recharge ponds. The appraised value of this collateral, based on the Hettinger <br />Farm appraisal by Kirk Lieurance, Certified General Appraiser, of Premier Farm Credit in <br />Fort Morgan, is $112,000 for both the land and the existing recharge system. <br /> <br />2) Bundy Farm - This land consists of 150 acres irrigated in Sections 7 & 8, T7N, R53W. <br />There are 120 acres under pivot sprinkler irrigation and 30 acres flood irrigated. There are 5 <br />existing wells (augmented on an annual basis through LWU.) The estimated value is $1500 <br />per irrigated acre, or a total of $225,000. <br /> <br />The combined collateral value of both properties is estimated to be $337,000. During the contract <br />process, supporting documentation of land values, based on the current land use, will be submitted <br />by a.Colorado Certified General Appraiser. The collateral will be in compliance with CWCB Loan <br />Policy #5 (Collateral). <br /> <br />Recommendation <br /> <br />Staff recommends a loan not to exceed $334,739 ($331,425 for project costs and $3,314 for the 1% <br />Loan Service Fee in accordance with CWCB Loan Policy #16), to Ken, Dave and Johns Guenzi <br />from the Severance Tax Trust Fund Perpetual Base Account, to purchase an existing well <br />augmentation recharge project, and to pay expenses already incurred, and to construct additional <br />recharge facilities. The recommended terms of the loan are 30 years at 2.5% per annum. Security for <br />the loan will be a first lien on real estate with a total value equal to or greater than the CWCB loan <br />amount. <br /> <br />Staff further recommends that final approval of the loan be conditioned upon all other standard <br />contracting provisions of the CWCB, and further recommends the following approval condition: <br /> <br />In the event that NRCS grant funds are obtained for a portion of the project, said grant funds shall <br />be used to reduce the principal amount of the CWCB loan. <br /> <br />cc: John Guenzi, Vice President, Guenzi Farms, Inc. <br />Brent Nation, P.E., Fort Morgan <br />Linda Bassi, AGO <br /> <br />Attachment <br /> <br />Page 5 of 6 <br />