25a

• Board Meeting Date: 11/19/2008
• Description: CF Section - Changes to Existing Loans - Southeastern Colorado Water Conservancy District - Arkansas Valley Conduit Project
• Board Meetings - Doc Type: Memo

Southeastern Colorado Water Conservancy District Agenda Item 25a
November 10 , 2008
Page 2 of 2

Backgro und

The Fryingpan - Arkansas Project was authorized in 1962 , and wa s constructed between 1964 and
1982. The Project is a trans - mountain diversion system that delivers supplemental water to cities,
farmers and ranchers all along the Arkansas River. O rigina l ly the Fry - Ark Project included two
conduits to move water from Pueblo Reservoir to communities in need of clean water. The Fountain
Valley Pipeline was built and deliver s water to the Colorado Springs area . The second conduit is the
Arkansas V alley Condu it. The Fryingpan - Arkansas legislation calls for the C onduit to be paid for
by the communities receiving the water. The large and growing population of Colorado Springs and
its surrounding areas, made possible the construction, and funding of the Fountain Valley Pipeline a
reality. However, the lower Arkansas Valley C onduit, from Pueblo to Lamar, has never been built
because the communities could not afford the project.

In 2000, a group of water providers and governmental agencies in Otero County formed a group
called the Waterworks Committee. The group was formed to address water issues and began the
process of trying to get the Conduit built. A study was performed and confirmed the Conduit could
be built if Federal financial assistance could be provided. Waterworks asked the SECWCD to
assume the responsibility of moving the conduit process forward . The SECWCD agreed and is
working with water providers of the lower Arkansas Valley . An Arkansas Valley Conduit Advisory
Committee was formed in 2003 and has be en leading the efforts to construct the Conduit .

Project Update

The SECWCD obtained a State and Tribal Assistance Grant (STAG) of $1,041,818 (requiring a
45% match) and a grant from the W ater Supply Reserve Account for $ 200,000 to continue
engineering wo rk necessary to prepare for the environmental compliance phase of the Project . The
S TAG work is planned for November 2008 t hrough January 2011.

Senate Bill S. 2974 , which changes the original Fry - Ark authorization from a 100% local funding
of the Conduit to a 65/35 Federal/Local cost share and authorizes the Bureau of Reclamation to
construct the Conduit, has recently received a favorable mention fr o m the U . S . Senate Energy and
Natural Resources Committee. The bill also includes provisions to use current a nd future
miscellaneous Fry - Ark project revenues towards the repayment of Conduit pro ject costs.

The SECWCD was informed that S. 2974 is being included in the omnibus legislative package
being prepared by the Chairman of the Senate Energy Committee. Actio n on the bill is hopeful
before the end of the year or early in the next Congressional session. The SECWCD has stated that
.

Attachment:

1) Original Loan Approval Conditions (As approved by the CWCB in November 2006)
2) Letter from Jim Broderick, SECWCD Executive Director - requesting the time extension
3) 2009 Projects Bill - language change