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g <br />STATE OF COLORADO <br />Colorado Water Conservation Board <br />Department of Natural Resources <br />1313 Sherman Street, Room 721 <br />Denver, Colorado 80203 <br />Phone: (303) 866-3441 <br />FAX: (303) 866-4474 <br />www. cwcb. s tate . co. us <br />January 31, 2006 <br />Mr. Oran White, President <br />Marcos Valley Beaver Ditch Company <br />P.O. Box 308 <br />Marcos, CO 81328 <br />RE: Marcos Valley Beaver Ditch Pipeline Project Loan Increase <br />Dear Mr. White: <br />Bill Owens <br />Governor <br />Russell George <br />Executive Director <br />Rod Kuharich <br />CWCB Director <br />Rick Brown <br />Acting Deputy <br />Director <br />I am pleased to inform you that on January 25, 2006 the Colorado Water Conservation Board (CWCB) <br />approved your increase to the Company's existing loan. We understand that the loan will be used to <br />install a new pipeline to increase ditch efficiency and reduce salinity impacts on the downstream rivers <br />including the Colorado River. <br />The Board approved an initial loan not to exceed $913,798 ($904,750 for project costs and $9,048 for <br />the 1% Loan Service Fee). The Board also approved apost-construction loan not to exceed $235,236 <br />($226,188 for project costs and $9,048 for the 1% Loan Service Fee) with loan terms of 2.5% per <br />annum for 30 years. I have attached a copy of the updated Board memo that includes a section "Action <br />taken by the CWCB on January 25, 2006". <br />When the Board approves a loan there remain several conditions: <br />a) A Feasibili ,~ Study Kirk Russell has reviewed the study titled "The Marcos Valley <br />Beaver Ditch Pipeline Project -Revised Feasibility Study -December 2005. " If <br />necessary, modifications maybe requested by Mr. Russell via phone/fax or email in the <br />next couple weeks. The report, in combination with the CWCB board memo dated <br />January 17, 2006 will meet the requirements of the CWCB Construction Fund <br />Guidelines for feasibility studies. <br />b) An amended contract must be in place before funds can be advanced. Chad Henderson <br />will initiate the loan contract amendment process for this project. Once the contract is <br />finalized and all conditions regarding reserve funds are met, the Company may request <br />loan funds to cover eligible project expenses. You can contact Chad Henderson at 303- <br />866-3462. <br />Flood Protection • Water Supply Planning and Finance • Stream and Lake Protection <br />Water Supply Protection • Conservation and Drought Planning <br />