C150300 Approval Letter

• Contract/PO #: C150300
• Contractor Name: Raymond Dairy, Inc.
• Contract Type: Loan
• Water District: 0
• County: Mesa
• Loan Projects - Doc Type: Approval Letter

Raymond Dairy, Inc.
September 9, 2009 (UPDATED September 16, 2009)
Page 4 of 5
Table 2. Financial Summary of Project
Agenda Item 7c
Total Pro'ect Cost $95,000
Initial Loan (100% of Pro'ect Cost)
Other Fundin Assistance $95,000
$32,000
Balance of Borrower's Obli ation $63,000
1% Service Chax e $950
Post-construction Loan Amount - $63,950
Annual Loan Payment Amount (based on post-construction loan
amount) $4,102
Creditworthiness: The Borrower has a loan with Fann Credit Service for $77,700 with payments of
$18,000/year and a maturity date of 2016.
Repayment of the CWCB loan for the Project will come from proceeds from the dairy operation. In
addition, the Borrower will set aside one annual payment as the reserve account prior to
disbursements from the CWCB.
Table 3 shows the Financial Ratios for the corporation.
Table 3. Financial Ratios
Future
Financial Ratio Past Years `,~,~ project
Operating Ratio (revenues/expenses) 103%
(Average) 103%
(Average)
weak: <100% - average: 100% - 120% - strong: >120% $1.86M/1.8M $1.86M/1.8M
Debt Service Coverage Ratio 333%
(Strong) 273%
(Strong)
(revenues-expenses)/debt service $1.86M- $1.86M-
weak: <100% - avera e: 100% - 120% - stron :>120°/ 1.8M/18K 1.8M/22K
Cash Reserves to Current Expenses 2%
(Weak) 2%
(Weak)
weak: <50% - avera e: 50% - 100% - stron : >100°/ $42K /1.8M $42K /1.8M
Annual Operating Cost per Acre-Foot (based on 386 AF) $g <$8/AF
eak: >$20 - avera e: $10 - $20 - stron : <$1 (Strong) (Strong)
$3000/386AF *Note
f th d't h
*Note: The Borrower maintains the ditches on the dairy farm. The annual mamtenance expenditures or e~ c es are
around $2-3K/year. Maintenance costs will decrease as a result of this project but exact amount is unknown.
Collateral - As security for this loan, the Borrower will pledge one parcel of real property appraised
for an amount not less than 110% of the long term loan amount. The proposed property is a 20-acre
parcel of farm land on the northeast corner of the Raymond's land. It has a separate deed from the
remainder of the fann and has no liens against it. This security is in compliance with CWCB
Financial Policy #5 (Collateral).