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<br />Guenzi Farms <br />May 24-27, 2004 <br /> <br />Agenda Item 21crj <br /> <br />Table 1 is a summary of the financial aspects of the project. A CWCB Loan of $331 ,425 would . <br />have an annual payment of $17,419 (including the 10% reserve requirement) at the loan terms of <br />2.5% for 30 years. The loan payment of $17,419 amounts to approximately $8.70 per acre foot of <br />water diverted into recharge. <br /> <br />Table 1. Financial Summa <br /> <br /> <br />$368,250 <br />$331,425 <br />$17,419 <br />$8.70 <br /> <br />Current market value for augmentation water in that portion of the river is approximately $20 per <br />acre-foot. The loan payment will be offset with savings from a reduction in LWU assessments and <br />the revenue generated from the lease of any excess augmentation credits from the project. The <br />Guenzis ability to make loan payments will improve over the period of the CWCB debt retirement <br />because as their loan payment remains the same, LWU assessments and the value of excess <br />augmentation water will continue to increase. <br /> <br />Creditworthiness: In addition to the CWCB loan for $331 ,425, the Guenzis will be obtaining a <br />new loan for $601,000 with Premier Farm Credit in Sterling for the purchase of the Hettinger Farm. <br />With the new loans their total long-term and intermediate term loan debt will be $2,248,026, with <br />annual payments of $268,669. Discussions with Premier Farm Credit, as well as review of <br />financial information, indicate that the Guenzis have a very strong credit history. This is evidenced <br />. .. " ill payoff a $112,000 bridge lo..n <br />with Premier Farm Credit for the recharge portion of the Hettinger Farm purchase. . <br /> <br />Table 2 shows the combined Financial Ratios for the Guenzis (Ken, Dave, and John as individuals, <br />as well as Guenzi, Famns, Inc.) and indicates strong ability overall to repay the $331,425 CWCB <br />loan, as well as the new loan with Premier Farm Credit for purchase of the Hettinger farm. <br /> <br />Table 2. Financial Ratios <br /> <br />Financial Ratio Without With completed <br /> the project project <br /> (Aver. 2000-031 (Future Year) <br />Operating Ratio (revenue/expense) <br />weak: less than 100% 132% 136% <br />average: 100% - 120% (strong) (strong) <br />strono: meater than 120% <br />Debt Service Coverage Ratio <br />(revenues-expenses)/debt service 252% 214% <br />weak: less than 100% (strong) (strong) <br />average: 100% - 125% <br />strano: oreater than 125% <br />Cash Reserves to Currenl Expense <br />weak: less than 50% 27% 21% <br />average: 50% - 100% (weak) (weak) <br />strano: oreater than 100% <br />Annual Operating Cost per Acre-Ft. <br />weak: greater than $20 $20.00 $18.00 <br />average: $10 - $20 (aver.) (aver.) <br />strono: less than $10 <br /> <br />. <br /> <br />Page 4 of6 <br />