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<br />
<br />Excelsior Irrigating Company
<br />September 22-24, 2003
<br />
<br />Consent Agenda Item 4a
<br />
<br />(1) Includes Sept. 1, 2003 payments made.
<br />(2) Original Contract ($230,000/3.75%/30 years) ,was amended December 1,2000.
<br />
<br />Collateral -In addition to a pledge of revenues, collateral for Loan Contract No. C153748 included a
<br />security interest in 2883 shares of EIC owned by Dick Evans, as well as a diversion structure. In
<br />September 1997, the Board agreed to release 1007 'shares as collateral so that those shares could
<br />be sold to AGUA. The Board also approved AGUA's ,loan for the purchase of the 1007 shares, and
<br />further determined that the remaining 1,876 shares pf EIC owned by Dick Evans and the diversion
<br />structure would be adequate collateral for both EIC 19ans. Loan Contract No. C153797 to EIC was
<br />subsequently executed in February 1998.
<br />
<br />.
<br />
<br />Excelsior Irrlaatlna ComDanv
<br />
<br />The EIC is a Colorado Mutual Ditch Company and a Inon-profit corporation. There are 3,333 shares
<br />outstanding for the EIC. Present ownership of shares and proposed ownership with the new loan
<br />are:
<br />
<br />Current
<br />
<br />With Proposed AGUA Loan
<br />
<br />AGUA
<br />Lafarge North America, Inc.
<br />C.R. Evans
<br />TOTAL
<br />
<br />1,007 (30.2%)
<br />450 (13.5%)
<br />1.876 (~6.3%)
<br />3,333
<br />
<br />1792 (53.8%)
<br />450 (13.5%)
<br />1.091 (32.7%)
<br />3,333
<br />
<br />The current EIC officers and their titles are listed below:
<br />
<br />.
<br />
<br />President
<br />Vice-President
<br />Secretary /Treasurer
<br />
<br />Loren Hawkins (AGUA)
<br />C.R. (Dick) Eva~s
<br />Rusty Cochran (LaFarge North America, Inc.)
<br />
<br />Discussion
<br />
<br />AGUA's new loan request for purchase of water rights (785 shares) is similar to its loan authorized
<br />by CWCB in September 1997, by which AGUA purchased 1007 shares of EIC from Mr. Dick Evans.
<br />At that time, CWCB approved a release of 1007 shares from the EIC loan and determined that the
<br />value of the remaining 1,876 shares was sufficient to ~ecure both of EIC's loans.
<br />
<br />i
<br />Appraisal - As part of AGUA's pending loan request, 'an "Update of the Estimated Fair Market Value
<br />of Stock in the Excelsior Ditch Company", prepared :by Blatchley Associates, Inc. of Denver, dated
<br />August 11, 2003, has been submitted to the CWCIll staff. Mr. Ron Blatchley, P .E. prepared the
<br />original appraisal used by CWCB for the 1997 loan to!AGUA. The estimated fair market value of 785
<br />shares of EIC, as of August 11, 2003, is $1,050,000. This represents $1338 per EIC share and
<br />$1494 per acre-foot of historic consumptive use of irrigation water. (AGUA's contract with Mr. Evans
<br />is for $863,500.) The estimated market value is bas~d on comparable sales of water rights decreed
<br />from the Arkansas River, between $1,000 and $1,90,0 per acre-foot, or an average of $1,500 acre-
<br />feet of historic consumptive use of irrigation water.
<br />
<br />Based on the revised appraisal, the remaining 1 ,091 ~hares of EIC being used to secure Loan
<br />Contracts No. C153748 and No. C153797 would hav~ a value of $1,459,758, far in excess of EIC's .
<br />remaining loan amounts of $329,181.41. BecaUSe the EIC loans are over-collateralized, staff
<br />recommends further reduction of the collateral for the ,loans to 500 shares of EIC, plus the diversion
<br />structure. At the current appraised value of $1338 per share, the 500 shares would provide
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