Laserfiche WebLink
<br /> <br />~~\ ~Jv~ <br /> <br />July I, 1996 <br /> <br />STATE SERVICES BUILDING <br />1525 Shennan Street - 5th Floor <br />Denver(: Colorado 80203 <br />Phone 303) 866-4500 <br />FAX (303) 866-5691 <br />RIECE%V:?') <br /> <br />J U L {} 1 '996 <br /> <br />GALE A. NORTON <br />Attorney General <br /> <br />STEPHEN K. ERKENBRACK <br />Chief Deputy Attorney General <br /> <br />TIMOTHY M. TYMKOVICH <br />Solicitor General <br /> <br />STATE OF COLORADO <br />DEPARTMENT OF LAW <br />OrncE OF TIlE ATTORNEY GENERAL <br /> <br />CON F IDE N T I A L <br /> <br />MEMORANDUM <br /> <br />Colorado Water <br />conservation Board <br /> <br />PRIVILEGED ATTORNEY-CLIENT MEMORANDUM NOT TO BE PLACED <br />IN CENTRAL FILES. ANY CIRCULATION OR DISTRIBUTION TO <br />PERSONS OUTSIDE THE EMPLOY OF THE CLIENT MAY WAIVE THE <br />PRIVILEGE. <br /> <br />FROM: <br /> <br />John Van Sciver <br />CWCB <br /> <br />Linda J. Bassi ~ \~ <br />Assistant Attor~'General <br /> <br />TO: <br /> <br />RE: <br /> <br />Use of Pledge of Revenues With Rate-raise Covenant as <br />Sole Collateral for CWCB Loans <br /> <br />At the CWCB's January 1996 meeting, Tom Peltz, bond counsel <br />for the Town of Lyons, proposed that Lyons pledge its net revenues <br />with a rate-raise covenant to secure its loan. The Board approved <br />the loan and the proposed collateral arrangement. Mr. Peltz also <br />represents the Town of Johnstown and has proposed a similar <br />collateral arrangement for its CWCB loan. (The Board approved <br />Johnstown's loan without any discussion of the collateral). Mr. <br />Peltz sent me sample language from revenue bond financing contracts <br />he has worked on that includes provisions concerning a net revenues <br />pledge, the establishment of a reserve account, a covenant to raise <br />rates if such rates are insufficient to make the loan payments, and <br />a remedies clause that includes the remedies of mandamus, specific <br />performance and injunctive relief for default on the loan. <br /> <br />CWCB loan contracts already require borrowers to pledge <br />revenues, to establish a debt reserve fund, and to promise to raise <br />water rates if those rates are insufficient to repay the loan. <br />Also, any legal or equitable remedy is available to the CWCB under <br />the terms of its loan contracts. <br /> <br />In his proposal to the Board, Mr. Peltz stressed the remedy of <br />mandamus, which would result in the court ordering the borrower to <br />raise its rates. Mandamus is "an extraordinary remedy which may <br />