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<br />,. :1 <br />"t'~ - <br /> <br />, <br />~ <br /> <br />. <br /> <br />STATE O~ COLORADO <br /> <br />- <br /> <br />, <br />, <br /> <br />Colorado Water Conservation Board <br /> <br />Department of Natural Resources <br />721 Centennial Building <br />1313 Sherman Street <br />Denver, Colorado 80203 <br />Phone, (303) 866,3441 <br />FAX: (3031 866-4474 <br /> <br />MEMORANDUM <br /> <br />Roy Romer <br />Governor <br />lames S. Lochhead <br />Executive Oiredor, ONR <br />DariesC. Lile, P.E. <br />Director, ewes <br /> <br />(Updated February 6, 1997) <br /> <br />TO: Colorado Water Conservation Board Members <br /> <br />FROM: John Van Sciver <br /> <br />DATE: January 21, 1997 <br /> <br />SUBJECT: Agenda Item 8g., January 29,30, 1997, Board Meeting-, <br />The Horse Creek Water Users Association <br />Approval of a Construction Fund Loan in maximum amount of $825,000 to <br />Purchase Water Rights, and to pay the costs of setting up and adjudicating <br />an augmentation plan, <br /> <br />BACKGROUND <br /> <br />The Horse Creek Water Users Association (HCWUA) (located in El Paso, Elbert, and Lincoln <br />Counties), has submitted an application for a loan to purchase water rights. They have requested <br />a maximum loan amount of $825K to cover acquisition of the rights and the legal and <br />engineering costs of adjudication, The applicant is requesting a loan to cover 100% of these <br />costs, a loan term of 40 years, and an interest rate be 2%. <br /> <br />The purpose of the water rights would be to provide augmentation water for HCWUA wells in <br />the Horse Creek Basin, Under new rules adopted for the Arkansas River Basin, the consumptive <br />use of all non-exempt wells must be fully augmented, The State Engineers Office will enforce <br />these rules, and without additional water rights, HCWUA wells will not be allowed to pump, <br /> <br />The State Engineer's Office completed the "Horse Creek Basin Study" in March 1989, This <br />study concludes that the wells within the Horse Creek Basin have adversely impacted surface <br />water rights, <br /> <br />The CWCB revised the CWCB Construction Fund Guidelines in November 1996 to allow a loan <br />for the purchase of water rights, when no project exists, The conditions were that the purchase <br />must be to satisfy an existing need or shortage, llnd the purchase price must be supported by an <br />appraisal. <br /> <br />The CWCB "Arkansas River Augmentation Loan Account" was established in 1995 for the <br />purpose of making loans to organizations for the purchase of augmentation water rights to <br />