BOARD00061 ‎(2)‎

• Board Meeting Date: 11/13/2006
• Description: CF Section - Construction Fund and Severance Tax Trust Fund Perpetual Base Account New Project Loans - Southeastern Colorado Water Conservancy District Water Activity - Arkansas Valley Conduit Project
• Board Meetings - Doc Type: Memo

Arkansas Valley Conduit
November 13-15, 2006

Agenda Item10a

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revenues, including revenues received from the Arkansas Valley Conduit participants through .
Participant Funding Agreements. .

Staff further recommends that final approval of the loan be conditioned upon all other standard
contracting provisions of the CWCB, as well as the following:

1. Final Feasibilitv Study - Prior to ex~cution of a State loan contract, the project sponsor is
required to complete the feasibility study to the satisfaction of the CWCB Director or his
designee, including institutional an,d financial program details.

2. Participant Fundino Aoreements

a. Prior to execution of a State loan contract, all proposed Participant Funding Agreements
contemplated in the Loan Application & Feasibility Study shall be executed, and copies
submitted to the CWCB. The format of the agreements shall be as agreed upon by the
CWCB and the Enterprise prior to execution with participants.

b. Water Allocation - Participant Funding Agreements shall address water allocation to the
Arkansas Valley Conduit. Based on the annual availability of Fry-Ark Project water, the
District and the Enterprise shall make every attempt to allocated water in such a manner
as to meet the requested demand (6,555 acre feet) of the participants. In average
years, this will require the allocation of a minimum of 776 AF of available return flows to
the project, or an equivalent amount of water from other sources.

3. Conservation Plans - Prior to execution of a State loan contract, all "covered entities" .
participating in the project are required to have a CWCB-approved Water Conservation Plan
in place.

4. Federal Authorization - No State loan contract shall be executed until Federal legislation
amending the original Fry-Ark Project to authorize the 80% federal/20% local cost-share for
the Arkansas Valley Conduit has been approved.

5. Federal Fundino Appropriation - No State loan contract shall be executed until Federal
legislation appropriating construction funds for the Arkansas Valley Conduit has been
approved.

6. CWCB Loan Contract -

a. Time Limit - Provisions pertaining to the time limit for loan approval shall be as
outlined in CWCB Financial Policy #2 (Time Limits), with the following exception:
The moneys appropriated in the CWCB Water Projects Bill shall remain available
for the designated purposes until the project is completed; except that if the
SECWCD Water Activity Enterprise does not enter into a loan contract with the
CWCB within two years after the effective date of the CWCB Water Projects Bill
(May 2007), then the moneys appropriated shall no longer be available for the
designated purposes and shall revert back to the Severance Tax Trust Fund
Perpetual Base Account.

b. Step-up Provision - The contract with SECWCD Water Activity Enterprise, shall
include a "step-up" provision, requiring that if any project participants fail to make
their loan repayment to SECWCD, the Enterprise will cover the shortfall.

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