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<br />, <br /> <br />.. <br /> <br />e <br /> <br />e <br /> <br />e <br /> <br />Table 2 shows the combined Financial Ratios for the Company and indicates an average ability <br />to repay the $277,245 CWCB loan. <br /> <br />Table 2. Financial Ratios <br /> <br />Financial Ratio With Amended <br /> the Droiect Droiect <br />Operating Ratio (revenue/expense) 178% 206% <br />weak: less than 100% (strong) (strong) <br />average: 100% -120% <br />strano: nreater than 120% <br />Debt Service Coverage Ratio 102% 100% <br />(revenues-expenses)/debt service (average) (average) <br />weak: less than 100% <br />average: 100% - 125% <br />strono: areater than 125% <br />Cash Reserves to Current Expense 8% 10% <br />weak: less than 50% (weak) (weak) <br />average: 50% - 100% <br />strano: oreaterthan 100% <br />Annual Cost per Ac-Ft diverted (8,000 ac-ft) $38 $44 <br />weak: greater than $20 (strong) (strong) <br />average: $10 - $20 <br />strano: less than $10 <br /> <br />As security for the original loan amount of $195,435 the Company pledged 130 acres of irrigated <br />land, including all above ground improvements, at an appraised value of $231,000. In addition, all <br />owners within the Company have personally, jointly and severally guaranteed repayment of the <br />loan. <br /> <br />In accordance with CWCB Policy No.5, real property collateral will be required in the amount of <br />11 0% of the loan amount for this project. The amended loan amount will be $277,245, which <br />requires a minimum security amount of $304,970. As additional security for the requested loan <br />increase the Company is pledging a first lien interest in real estate, located in Section 26, Township <br />6 North, Range 54 West. The property consists of 5-acres with a 1,500 square foot modular home, <br />located within the augmentation project area. The estimated market value of the property is <br />$80,000. The additional collateral will give the Company a total pledged collateral amount of <br />$311,000 for the project, which exceeds the collateral requirement of CWCB Policy No.5. <br /> <br />During the contract amendment process, the Company will be required to submit documentation of <br />the value of the 5-acre parcel, with improvements, by a Colorado Certified General Appraiser. If <br />the appraised value does not meet or exceed the requirements of Policy No.5, the Company will be <br />required to pledge additional collateral. The owner's personal guarantee to repay the loan will still <br />apply. <br /> <br />STAFF RECOMMENDATION: <br />Staff recommends that the Board approve an increase of $81,810 ($81,000 for project costs and <br />$810 for the 1% Loan Service Fee, in accordance with CWCB Loan Policy No. l6) from the <br />Severance Tax Trust Fund Perpetual Base Account. The additional $81,810 of funding would be <br />for 20-years at the present lending rate of 2.25%. Security for the loan will be collateral in <br />accordance with CWCB loan policy #5 (a first lien on real estate with a total value equal to or <br />greater than the CWCB loan amount and a personal guarantee by each of the owners). <br /> <br />Staff further recommends that fmal approval of the loan be conditioned upon all standard- <br />contracting provisions of the CWCB. <br /> <br /> <br />3 <br />