C153701 Approval Letter

• Contract/PO #: C153701
• Contractor Name: Fort Morgan, City of & Fort Morgan Water Works and Distribution Enterprise
• Contract Type: Loan
• Water District: 1
• County: Weld
• Bill Number: SB94-029
• Loan Projects - Doc Type: Approval Letter

,---
i>

'il

-

Colorado Water Conservation Board

Department of Natural Resources

721 Centennial Building
1313 Sherman Street
Denver, Colorado 80203
Phone: [phone]
FAX: [phone]

STATE OF COLOMDO

I)

MEMORANDUM

Roy Romer
Governor

To:

Colorado Water Conservation Board
. .~~
BIll Green, P.E. I
Project Planning and Construction

James S. Lochhead
Executive Director, DNR

Daries C. Lile, PE.
Director, CWCB

From:

Date: November 14, 1997

Sub: Agenda Item 17.g., November 24-25, 1997 Board Meeting - Water
Project Construction Loan Program - Requests for Approval on Loans
For New Projects - City of Fort Morgan - Request for Parity

e

At the July 1997 Board meeting, the Board authorized the Director to execute a consent
to a parity lien on the City's water system revenues for the interim bonds, conditioned
upon the City being in substantial compliance with its 1995 loan contract with the CWCB,
the City providing a parity certificate from its CPA demonstrating that the water rates
charged by the City's water enterprise are or will be sufficient to cover operation and
maintenance expenses, existing debt and the proposed interim bonds; and upon the City
obtaining a letter of credit backing the interim bond issue from a commercial bank
acceptable to the CWCR

The City has obtained a letter of credit from the State Street Bank and Trust Company to
back the interim bond issue. In preparation for its December 4 closing on the interim
bonds, the City has submitted a draft parity certificate to staff, which staff approved in
form and the City is finalizing. The City also has submitted the Consent to Parity form
(attached to this memo) to staff for the Director's signature. By the Director's signature
of the consent form as drafted, the CWCB would consent to the issuance, on a parity with
the CWCB's existing lien on the water revenues, of the interim bonds and additional parity
~onds issued by the Colorado Water Resources and Power Development Authority
" DA") and USDA Rural Development ("RD"). The CWRPDA has executed the
. I" same form, consenting to the interim bonds and additional parity bonds issued by the
d11f CWCB and RD.

Additionally, the CWCB would be consenting to a reimbursement agreement entered into
by the City's water enterprise with the State Street Bank, which provides that, in the event
that the City or its enterprise draws upon the letter of credit to meet its obligations under
the interim bonds, the City will be obligated to repay any such funds withdrawn to the
State Street Bank, and the State Street Bank's lien on the water revenues would be on a
_ parity with the CWCB' s lien on those revenues. The City Council adopted a resolution

.--...