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.':'. /. ' ST ATE 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 Memorandum Bill Ritter, Jr. Governor TO: Colorado Water Conservation Board Members Harris D. Sherman Executive Director FROM: Vaughn McWilliams, C~~tr c Manager V N\ Mike Serlet, P ,E., Chief ~ff Water Supply Planning a a Finance Section Rod Kuharich CWCB Director Dan McAuliffe Deputy Director DATE: May 11, 2007 SUBJECT: Consent Agenda Item Ib, May 22-23, 2007, Board Meeting Water Supply Planning and Finance - Changes to Existing Loans- Lazy 0 Ranch Homeowners' Association - Collateral Change " . Introduction At the November 2006 meeting, the Board approved a loan to the Lazy 0 Ranch Homeowners' Association (LORHOA) in the amount of$152,258 for construction ofa secondary water system to provide outside irrigation water to 21 home sites within the ranch. The recommended collateral for the loan was a pledge of LORHOA's annual revenue assessments and the project itself. Discussion The LORHOA covered the engineering and construction costs ofthe project with a bridge loan obtained from Community Banks of Colorado, whic:tI is a line of credit secured by a pledge of the annual revenue assessments. It was the intent of the LORHOA to pay off this bridge loan with the CWCB loan, but during the contracting process it was determined that the LORHOA desires to keep the line of credit with Community Banks open for future operating expenses. Community Banks is not willing to provide parity to the CWCB in the annual revenue assessments as collateral for the CWCB loan, which is necessary to comply with Board Policy # 5 (Collateral). Therefore, the LORHOA has agreed to provide a portion of its senior water rights as alternative collateral for the CWCB loan. . 1