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<br />. <br /> <br />. <br /> <br />. <br /> <br />As mentioned above, water is used by the shareholders for agricultural purposes, The SIC appears to <br />qualify for the CWCB Agricultural Lending rate. <br /> <br />The SIC has no existing debt. Income to repay the CWCB loan will come from an assessment increase of <br />$13.39 per share, per year. This additional assessment adds only $0,73 to the cost of delivering one acre- <br />foot. The SIC has the legal ability to enforce payment of assessments. <br /> <br />As security for the loan the SIC will pledge revenues from assessments, as well as one payment in a <br />certificate of deposit account to be held by the State Treasurer. <br /> <br />Recommendation <br />Staff recommends a loan not to exceed $318,583 to the Sterling Irrigation Company for 90% of the costs to <br />rehabilitate the Company's diversion and headgate structures on the South Platte River. The recommended <br />term of the loan is 30 years and the lending rate would be that rate approved by the Board for Agricultural <br />borrowers in 1999. As security for the loan, the Sterling Irrigation Company will pledge revenues from <br />assessments as well as a certificate of deposit in amount of one annual payment. <br /> <br />Staff further recommends that fmal approval of the loan be conditioned upon acceptance of the project and <br />the associated fmancial obligations by a vote of the shareholders of the Company. <br /> <br />cc: Kenneth Gareis, President Sterling Irrigation Company <br />Jack Odor, P,E. <br />Linda Bassi, AGO <br /> <br />Attachment <br /> <br />C:\WPSl\Proj-New\Sterlinglrrigationl198memo <br />L:\boardrnemlnov98\24bNov98 <br /> <br />3 <br />