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<br />'" <br /> <br />, <br /> <br />Stromberger Land & Cattle Company LLC <br />November 25-26, 2002 <br /> <br />Agenda Item 20b <br /> <br />Table 2 shows the Financial Ratios for the SLee and indicates, with the exception of cash . <br />reserves, strong ability to repay the $414,000 ewes loan. Annual operating costs per acre-foot, <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 I' Without With project <br />I. <br /> 1 . the project Future Years <br /> . fAver. 2001.02) <br />Operating Ratio (revenue/expense) I' <br />weak: less than 100% I' 134% 132% <br />average: 100% - 120% (strong) (strong) <br />strona: areater than 120% I. <br />Debit Service Coverage Ratio I' <br />(revenues-expenses)/debt service I. 210% 170% <br />weak: less than 100% I, (strong) (strong) <br />average: 100% - 125% I <br />strona: areater than 125% <br />Cash Reserves to Current Expense I. <br />weak: less than 50% I 15% 10% <br />average: 50% - 100% I (weak) (weak) . <br />strona: areaterthan 100% <br />Annual Operating Cost per Acre-Ft. <br />weak: greater than $20 I $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 CWCS loan, To secure the $414,000 loan, approximately <br />260 acres would be needed as collateral. This collateral would be in compliance with CWCS Loan <br />Policy #5 (Collateral) <br /> <br />. <br /> <br />Recommendation <br /> <br />Staff recommends a CWCS Small Project Loan notito exceed $414,000 to the Stromberger Land &. <br />Cattle Company from the Construction Fund to corjstruct a system of recharge ponds and wells to <br />replace out-of-priority irrigation well depletions. Th~ 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 $414,000. The real estate value will be supported by an opinion of value from <br />a certified appraiser, and all necessary permits and e$sements must be obtained. <br /> <br />Staff further recommends th'at final approval of the loan be conditioned upon all other standard <br />contracting provisions of the CWCS. ' <br /> <br />cc: Brad Stromberger, Partner, Stromberger Land & Cattle Company. <br />Linda Bassi, AGO . <br /> <br />Attachment <br /> <br />. <br /> <br />Page 4 bf5 <br />