C150228 Contract

• Contract/PO #: C150228
• Contractor Name: Riverside Irrigation District
• Contract Type: Loan
• Water District: 0
• County: Morgan
• County: Weld
• Loan Projects - Doc Type: Contract Documents

STATE OF COLORADO

Colorado Water Conservation Board

Department of Natural Resources
1313 Sherman Street, Room 721
Denver, Colorado 80203
Phone: [phone]
FAX: [phone]
www.cwcb.state.co.us

March 3, 2005

Bill Owens
Governor

Mr. Don Chapman, Superintendent
Riverside Irrigation District
125 E. Kiowa
Fort Morgan, CO 80701

Russell George
Executive Director

Rod Kuharich
CWCB Director

RE: Loan Proposal to Purchase GASP Units

Dan McAuliffe
Deputy Director

Dear Don:

As you know we have been discussing and considering your proposal to obtain a CWCB loan to
purchase GASP (Groundwater Appropriators of the South Platte) units, as a means for the District to
regain control of Riverside Reservoir & Land Company water shares. This proposal was outlined in
your December 2004 letter, as well as the supplemental information on the water rights owned by GASP
and the water rights breakdown of a GASP unit. It is our understanding that the GASP membership has
instructed the Board to develop a plan for dissolution of the organization and dispersal of assets.. You
indicated that dispersal ofwater rights would likely be either through auction of individual rights, or as a
pro-rata withdrawal of water shares ("water in lieu of cash") that would allow holders ofthe GASP units
to negotiate trades for the water they desire.

As you are aware, CWCB has done a number ofloans for water rights purchase, in accordance with
State Statute and our Policy # 8 (attached.) The key provisions of this policy are that the purchase
should address an existing need or shortage, and that a written appraisal or opinion of value be provided
by a qualified water rights appraiser prior to disbursal of CWCB funds. The CWCB could participate in
a water rights loan to the District, in accordance with Policy #8, under the following situations: '

1. If the District is able to negotiate and contract with GASP to purchase a specified number of
Riverside shares at a specified purchase price, or

2. Ifthe District is able to purchase a specified number of Riverside shares at auction, with initial
private "bridge financing", followed by permanent loan financing through CWCB.

The purchase of actual GASP units with CWCB loan financing is problematic for us because it would
not result in the purchase of a specific water right. It leaves the actual number of shares that the District
could obtain to an uncertain and complex trading process.

Flood Protection. Water Supply Planning and Finance. Stream and Lake Protection
Water Supply Protection. Conservation and Drought Planning