Bryan Elder MBA PE Senior Water Resource Control Engineer Office of Enforcement Special Investigations Unit State Water Resources Control Board Qualifications BS Chemical Engineering UC Santa Barbara ID: 931275
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Slide1
Financial AnalysisMarble Mountain Ranch, Inc.
Bryan Elder, MBA, PE
Senior Water Resource Control Engineer
Office of Enforcement -
Special Investigations
Unit
State Water Resources Control Board
Slide2Qualifications
BS Chemical Engineering – UC Santa Barbara
MS Civil Engineering – UC Los Angeles
PE – Civil Engineer
MBA – Pepperdine University
Graduate coursework in accounting, finance, asset valuation
US EPA training on economic benefit and ability to pay financial models
Completed >100 economic benefit and >25 ability to pay analyses since 2014
Provide financial training to enforcement staff statewide
Slide3Basis of Ability to Pay
Net Cash Flow
Cash receipts (revenue) – Cash payments (expenses)
Measure of financial health and company value
Net Worth
Assets
Liabilities
Ability to Finance
Slide4Information Reviewed
Tax filings 2013 – 2016 – MMR-16
Ability to Pay Claim Form (December 12, 2016) – MMR-16
Public Records Search (attached to memorandum)
Mr. Cole’s written testimony – MMR-1
KASL Engineering Proposal - MMR-15
Alternative Energy Quotes – MMR-19
Slide5IRS Tax Filing Summary
2013
2014
2015
2016
Gross Income
$437,330
$474,949
$623,213
$749,250Total Business Expenses/Deductions$384,234$473,754$708,217$886,503Total Profit/Loss$53,035$1,195($85,004)($137,253)
Taxable income is not representative of financial health or ability to pay.
Slide6Cash Flow Analysis
Based only on cash expenses incurred
Exclude non-cash expenses
Depreciation & Amortization
2013
2014
2015
2016
Depreciation Expense
$40,120$57,823$186,804$314,341Total Profit/Loss$53,035$1,195($85,004)($137,253)Cash Flow (pre-principal loan payments)$93,155
$59,018
$101,800
$177,088
Slide7Cash Flow Analysis
Add non-deductible cash expenses
2013
2014
2015
2016
Cash Flow (pre-principal loan payments)
$93,155
$59,018
$101,800$177,088Est. Loan PaymentsUNKNOWN$49,920Approx.
Net Cash Flow
UNKNOWN
$127,168
Slide8Net Worth Analysis
Assets
Property
Water/Mineral Rights
Structures
Equipment/Vehicles
Livestock
Accounts Receivables
Cash/Investments
Slide9Net Worth Analysis
Assets
Marble Mountain Ranch properties
$913,000 (2017 Assessed Tax Value)
Market value unknown
Known Assets
$212,054
Cash
$2,000
Slide10Net Worth Analysis
Liabilities
Mortgages
Loans Payable
Accounts Payable
Liens
Slide11Net Worth Analysis
Liabilities
Mortgages
$246,802 (as of 12/2016)
Loans Payable
$148,000 (as of 12/2016)
Slide12Net Worth Analysis
Net Worth = Assets – Liabilities
Net Worth = $1,127,055 - $394,802
Net Worth = $732,253
Slide13Excessive Expenses Analysis
2013
2014
2015
2016
Repairs/Maintenance
$22,972
(5.2%)
$69,473
(14.6%)$58,464(9.4%)$63,699(8.5%)Utilities$31,296(7.2%)$37,522(7.9%)UNKNOWN$38,347*(5.9%)Legal/Professional Services$18,545(4.2%)$21,935(4.6%)
UNKNOWN
$75,342
(10.0%)
Slide14Alternative Analysis
KASL Consulting Engineers
Engineering & survey services - $44,250
Design implementation costs unknown
Alternative energy
$425 – 526,000
Golden West Energy
6 Year Lease - $55,130 per year + $142,000 buyout
Annual increase of ~$21,000 over existing utility expense
7.9% of Gross Revenue (2016)
Slide15Summary
Net Cash Flow (2016) =
$127,168
Net Worth =
$732,253
No indication of excessive expenses
Alternatives feasible (financially)