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<br />~::::::-r-")/') ~ ,.---- <br />~Uf- r:::--r <br /> <br />--1VS <br /> <br />-- <br /> <br />January 17, 2002 <br /> <br />Mr. Fred Walker, President <br />Tunnel Water Company <br />P.O. Box 1584 <br />Ft. Collins, CO 80522 <br /> <br />RE: Tunnel Water Company <br />Loan Interest Rate <br /> <br />Dear Mr. Walker, <br /> <br />I am writing in response to your letter dated January 15, 2002 in which you request time to <br />address the Colorado Water Conservation Board (CWCB) at the January 23-24,2002 meeting, <br />I am sorry to inform you that the agenda for that meeting has been set and we do not have the <br />flexibility to add agenda items at this late date. An alternative might be for you to contact <br />Director Eric Wilkinson from the South Platte drainage basin and ask that he relinquish a <br />portion of the time allotted to his report, We can of course schedule you at the March 14, 2002 <br />meeting in Aurora, <br /> <br />I would like to explain the Board's policy in setting interest rates based on ownership of water. It <br />is the board's contention that municipalities have a greater ability to pay than does the <br />agricultural community, For this reason we charge a significantly higher interest rate to cities <br />and towns. In situations where water company ownership is split between municipal and <br />agricultural borrowers, we apply a weighted average interest rate based on the percentage <br />ownership of each. This is how the rate was set for the Tunnel Water Company, and for all <br />similar situations for the past several years, As a practical matter, it is not possible for the <br />Board to track actual water use, which is why that standard has not been adopted. <br /> <br />You point out a paragraph in the Tunnel Water Company loan contract which establishes the <br />change of "use" of water (instead of "ownership") as a basis for a future increase of interest <br />rate. That paragraph applies only in situations where the loan interest rate is to be increased, <br />not decreased. A written CWCB interest rate policy has been in affect for several years, and <br />clearly identifies ownership as the basis for setting loan rates. <br /> <br />I would be happy to discuss this issue with you directly. <br /> <br />Sincerely, <br /> <br />Rod Kuharich, Director <br />Colorado Water Conservation Board <br /> <br />cc: Mr. Eric Wilkinson, Board Member, Colorado Water Conservation Board <br />Section B (Mike Serlet, Jan lilian, John Van Sciver) <br />Chrono File <br /> <br />C: Proj-New\TunneI101702Llr <br />