19a ‎(3)‎

• Board Meeting Date: 5/21/2008
• Description: CF Section - Changes to Existing Loans - Tom Hill - McElroy Dam Rehabilitation Project
• Board Meetings - Doc Type: Memo

STATE OF COLORADO
Colorado Water Conservation Board
Departme nt of Natural Resources
1313 Sherm a n Str e et, Roo m 721
Denver , Color a do 8020 3
Phone: ( 303) 866- 3441
Fax: ( 303) 866- 44 74
www.c w cb.state. c o.us
Þ·´´ η¬ ¬ » ® Ö®ò
Ù±ª»®² ±®
TO: Colorado Water Conservation Board Mem b ers
Ø¿®®·­ Üò ͸ »®³¿²
ÜÒÎ Û¨»½«¬ ·ª»
Ü·®»½¬±®
FROM: Vaughn McW illiam s , Contract Man a ger
Mike Serlet, P.E., Chief
Ö» ²²· º» ® Ôò Ù · ³¾ » ´
ÝÉÝ Þ Ü·® » ½¬± ®
Water Supply Planning and Finance Section
Ü¿² Ó½ ß « ´´·º»
ÝÉÝ Þ Ü»° « ¬§
DATE: May 13, 2008
Ü·®»½¬±®

Agenda Item No. 19a, May 20-21, 2008, Board Meeting
SUBJECT:
Water Supply, Planning and Fina nce – Chan ges to Existing Loans
Tom Hill – McElroy Dam Rehabilitation Project
Introductio n
At the November 2006 board m eeting, the Co lorado W a ter Conservation Board (CWCB)
approved a loan to Tom Hill in the amount of $862,540 from the Severan ce Tax Trust Fund
Perpetual Base Account. The $862,540 loan was fo r the rehabilitation of the McElroy Reservoir
Da m on the Gore Pass Ranch (Ranch). The loan is secured by land and water rights associated
with the Gore Pass Ranch.
In a letter dated April 11, 2008, Mr. Hill and h i s wife Linda requested that the CW CB
subordinate its interest in th e Gore P a ss Ranch so that the Hills could sell a conservation
easem ent on the Ranch to the Colorado Di vision of W ildlife (D OW ) for $3,750,000. The
conserva tion easem ent will p r ese r ve in perpetu ity the Gore Pas s Ranch in its curren t state f o r
agricu ltu ral use, and the reque sted subordination would ensure that the C W CB’s lien on the
ranch is also subject to the conserv a tion easem ent.
Staf f Rec o m m endati o n
Staff recomm ends that the Board approve subordi nating the CWCB’s interest in the Ranch to the
DOW ’ s conservation ea sem e nt, and to inc r ease the co llate r al f o r the loan with 1) a f i r s t-pos itio n
lien on the Gore Pass Ranch, inc l ud ing its wa ter ri ghts ; 2) a f i rst-pos itio n lien on the Hills’ 40 -
acre Olathe property; and 3) a lien on any future property that the Hills p u rchase to d e f e r taxes
from the sale of the conservation easem ent. In addition, staff recomm ends as a condition of
approval that the Hills agree to continue to m a rk et the Gore Pass Ranch for sale in good faith.
Finally, staff recomm ends am ending the term s of the loan from 30 years at 2.5% per annum to
10 years at 2.0% per annum , as permitted by Financial Policy #7 (Inte res t Rates).
Water Su pply Pr otection • Wat ers hed Prot ection & Flood Mitigatio n • S t rea m & La k e Protection • Wate r Supply Plannin g & Finance
Water Conservati o n & Drought Pla nning • In tra s ta te Wa ter M a na g e ment & Dev e lo p m e n t