Laserfiche WebLink
<br />Stleb Brothers, Inc. - Well Augmentation Project <br />March 25-26, 2003 <br /> <br />Agenda Item 24b <br /> <br />Table 1. Flnancl~1 Summary <br /> <br />. <br /> <br /> <br />$ 202,000 <br />$151,500 <br />$10,690 <br />$1.78 <br /> <br />Creditworthiness: SBI has no long-term real esta~e or equipment debt. They do maintain a <br />$1.75 million operating Line of Credit at the Wells Fargo Bank in Sterling, which renews annually in <br />June. <br /> <br />Table 2 shows the Financial Ratios for the SBI and i~dicates, with the exception of cash reserves, . <br />strong ability to repay the $151,000 CWCB loan. Annual operating costs per acre-foot, while shown <br />in the weak category, are representative costs of providing pressurized irrigation water to the land. <br /> <br />Table 2. Financial Ratios <br /> <br />Financial Ratio Without With project <br /> ; the project Future Years <br /> . fAver. 2000-01) <br />Operating Ratio (revenue/expense) <br />weak: less than 100% 125% 121% <br />average: 1(jO% - 120% (strong) (strong) <br />strano': oreaterthan 120% <br />Debit Service Coverage Ratio <br />(revenues-expenses)/debt service 3000% . <br />weak: less than 100% N/A (strong) <br />average: 100% - 125% <br />strona:areater than 125% <br />Cash Reserves to Current Expense , <br />weak: less than 50% . <10% <10% <br />average: 50% - 100% (weak) (weak) <br />strano: nreater than.1 00% <br />Annual Operating Cost per Acre-Ft. , <br />weak: greater than $20 , $24 $22 <br />average: $10 - $20 (weak) (weak) <br />strona: less than $10 <br /> <br />. <br /> <br />Collateral - As security for the loan the SBI will pledge a security interest in real estate, 220 acres of <br />sprinkler irrigated farmland owned by Stieb Land COJnpany, LLP, located in Section 26, T9N, <br />R51W. Wells Fargo Bank in Sterling has indicated that the SBlland would be valued at <br />approximately $950 per irrigated acre. At this level the proposed collateral would be sufficient to <br />secure the $151,500 loan. During the contract proqess supporting documentation of land values, <br />based on current land use, will be submitted by a Colorado Certified General Appraiser. The <br />collateral would be in compliance with revised CWC~ Loan Policy #5 (Collateral). <br /> <br />Recommendation <br /> <br />Staff recommends a CWCB Small Project Loan notlo exceed $151,500 to Stieb Brothers, Inc. from <br />the Construction Fund to construct a system of wells and recharge ponds to replace out-of-priority . <br />irrigation well depletions. The recommended term of the loan is 20 years and the recommended <br />lending rate is 2.5% per year. Security for the loan will be SBlreal estate with a total collateral value <br />of $151,500. The real estate value will be suppol1led by documentation from a Colorado Certified <br />General Appraiser, and all necessary permits and ea$ements must be obtained. <br />i <br />Page 4iof 6 <br />