FS0018X Approval Letter

• Contract/PO #: FS0018X
• Contractor Name: Sterling, City of
• Contract Type: Loan
• Water District: 0
• County: Logan
• Loan Projects - Doc Type: Approval Letter

Colorado Water Conservation Board
Department of Natural Resources
721 Centennial Building
1 31 3 Sherman Street
Denver, Colorado 80203
Phone: [phone]
FAX: [phone]

STATE OF COLOMDO

.

Bill Owens
Governor

February 12, 1999

Greg E. Walcher
Executive Director, DNR

Mr. Randall Gustafson
City Manager
City of Sterling
421 North 4th Street
Sterling, Colorado 80751

Peter H. Evans
Acting Director, CWCB

Re: Pawnee Creek Flood Control Project

Dear Mr. Gustafson:

I am writing to confirm that at the January 27, 1999 meeting of the Colorado Water Conservation
Board, the Board recommended an increase in the City of Sterling's Construction Fund
authorization of$685,000 for the Pawnee Creek Flood Control Project. For this additional
increment of funding, the term of the loan is for up to 20 years and the approved lending rate is
3.50 percent.

The Board's action on the $685,000 loan request will be included in the 1999 CWCB legislation
(SB 99-173) and is subject to authorization by the General Assembly. If authorized by the
General Assembly, the total Construction Fund authorization for this project will amount to
$1,235,000.

As security for the loan, it-is expected that the City will pledge revenues from that portion of the
City's sales tax that is set aside for drainage and flood control purposes as well as funds in the
amount of two annual loan payments that the City will deposit to a separate account that the City
will assign to the CWCB. Additionally, the City will be required to maintain a debt service
reserve fund in the amount of one annual loan payment.

The Board's approval ofthe increase in the City's loan authorization was made subject to the
following conditions:

1. prior to entering into a loan contract with the CWCB, the City will hold an election,
in compliance with the requirements of Amendment One to obtain voter approval for
incurring debt with the CWCB, and

2. the feasibility study for the Pawnee Creek Flood Control Project will be amended to
meet the requirements ofthe CWCB Construction Fund Guidelines.