PROJ02064

• Contract/PO #: C150234
• Contractor Name: Headgate 396 Lateral Corporation
• Contract Type: Loan
• Water District: 72
• County: Mesa
• Loan Projects - Doc Type: Approval Letter

STATE OF COLORADO

.

Colorado Water Conservation Board

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

November 14,2006

Bill Owens
Governor

Dave McDonald, President
Headgate 396 Lateral Corporation
2125 IlI2 Road
Grand Junction, CO 81505

Russell George
Executive Director

Rod Kuharich
CWCB Director

Dan McAuliffe
Deputy Director

RE: 396 Lateral Piping Project

Dear Mr. McDonald:

I am pleased to inform you that on November 13,2006 the Colorado Water Conservation Board
(CWCB) approved your loan request. We understand that the loan will be used to pay for the
installation of pipe in the 396 Lateral ditch alignment.

The Board approved an initial loan not to exceed $232,300 ($230,000 for project costs and $2,300 for
the 1 % Loan SerVice Fee). The Board also approved a post-construction loan not to exceed $136,300
($134,000 for the remaining balance of construction costs and $2,300 for the 1 % Loan Service Fee)
with loan terms of2.5% per annum for 30 years. I have attached a copy ofthe updated Board memo
that includes the Board's approval of the Staff Recommendations.

When the Board approves a loan there remain several conditions:

a) Feasibility Study: Kirk Russell has reviewed the study titled "Feasibility Study of
Piping Lateral 396, August 2006". Modifications maybe requested by Mr. Russell via
phone/fax or email in the next couple days. The approved study, in combination with the
CWCB Board Memo revised November 14, 2006, will meet the requirements of the
CWCB Construction Fund Guidelines for loan feasibility studies,

b) Contracting: An approved contract must be in place before funds can be advanced.
Vaughn McWilliams will initiate the loan contracting process for this proj ect. Once the
contract is finalized the Company may request loan funds to cover eligible project
expenses, You can contact Vaughn at [phone] regarding the requirements.

c) Design/Construction: You must adhere to the CWCB Design and Construction
Administration Procedures. Tim Feehan will contact you regarding the requirements
concerning construction. Tim will make construction site visits, which will be the basis
of pay estimates for disbursement of your loan funds, You can contact Tim at his office
at [phone] or cell phone [phone],

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