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. . . ST A TE OF COLORADO Colorado Water Conservation Board Department of Natural Resources 1313 Sherman Street, Room 721 Denver, Colorado 80203 Phone: (303) 866-3441 FAX: (303) 866-4474 www.cwcb.state.co.us MEMORANDUM Bill Owens Governor TO: Colorado Water Conservation Board Members Bruce Johnson, P.E. ~~.~~. Mike Serlet, P.E., Chief ~ J Water Supply Planning an inance Section Dan McAuliffe Deputy Director Russell George Executive Director FROM: Rod Kuharich CWCB Director DATE: November 6, 2006 SUBJECT: Agenda Item 10a, November 13-15, 2006 Board Meeting Water Supply Planning and Finance Section - New Project Loans SECWCD Water Activity Enterprise - Arkansas Valley Conduit Introduction The Southeastern Colorado Water Conservancy District ("District"), acting by and through its Water Activity Enterprise ("Enterprise"), is applying for a $60,000,000 loan from the Severance Tax Trust Fund Perpetual Base Account, to provide the 20% local share for construction of the Arkansas Valley Conduit (A VC), a 138 mile water supply pipeline extending from Pueblo Reservoir to the City of Lamar. The estimated total cost of the project is $300,000,000. Please see the attached Project Data Sheet. BackQround History - The Fryingpan-Arkansas Project was authorized in 1962 by Public Law 87-590 (76 Stat.389), and was constructed between 1964 and 11982. The Project is a trans-mountain diversion system that delivers supplemental water to cities, farmers and ranchers all along the Arkansas River. Two components of the original design were conduits to move water from Pueblo Reservoir to communities in need of clean water for treatment. One of these conduits, the Fountain Valley Conduit, has already been built and has been delivering water to Colorado Springs and its surrounding communities since 1985. The second conduit has not yet been built. The Fryingpan- Arkansas legislation calls for the conduits to be paid for 100% by the communities that will be receiving the water. The large and growing population of Colorado Springs and its surrounding areas, made possible the construction of, and payoff of the Fountain Valley Conduit a reality. However, the lower Arkansas Valley conduit, from Pueblo to Lamar, has never been built because the communities could not afford 100% of the project cost. Process Overview - In 2000, a group of water providers and governmental agencies in Otero County formed a group called the Waterworks Committee. The group was formed to address water issues and began the process of trying to get the Arkansas Valley Conduit built. This effort was successful in bringing the necessary groups together and starting the process of moving the conduit forward. The Waterworks Committee, under the oversight of the Enterprise requested a CWCB grant for $100,000 for 50% of the cost of a Feasibility Study. This grant was approved in January Flood Protection. Water Supply Planning and Finance. Stream and Lake Protection Water Supply Protection. Conservation and Drought Planning