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~- <br />STATE OF COLORADO <br />Colorado Water Conservation Soard <br />Department of Natural Resources <br />1313 Sherman Street, Room 721 <br />Denver, Colorado 80203 <br />Phone: (303) 866-3441 <br />FAX: (303) 86611474 <br />www.cwcb.state.co.us <br />November 28, 2006 Biu Owens <br />Governor <br />Russell George <br />Mr. James Broderick, General Manager Executive Director <br />Southeastern Colorado Water Conservancy District -Water Activity Enterprise Rod xuharich <br />31717 United Avenue CWCB Director <br />Pueblo, Colorado 81001 <br />Dan McAuliffe <br />Deputy Director <br />RE: Loan for the Arkansas Valley Conduit <br />Dear Jim: <br />I am pleased to inform you that on November 13, 2006 the Colorado Water Conservation Board <br />(CWCB) recommended your loan to the General Assembly for approval. Your loan request will be <br />included in the 2007 Water Project Construction Bill. Loan funds will be authorized in Spring 2007, <br />once the Governor has signed the bill. We understand that the loan will be used to provide the 20% <br />local share for construction of the Arkansas Valley Conduit, a 138 mile water supply pipeline <br />extending from Pueblo Reservoir to the City of Lamar. <br />The Board approved a loan in a maximum amount $60,600,000 (including the 1% loan service charge) <br />with loan terms of 3.25% per annum for 30 years. I have attached a copy of the updated Board memo <br />that includes a section "Action taken by the CWCB on November 13, 2006. I call your attention to the <br />approval conditions, in particular those added by the Board, the modifications to Condition #4 and the <br />addition of Conditions #6c, and #9. <br />When the Board approves a loan there typically remain several conditions: <br />a) A FeasibilitYStud iy s required. Bruce Johnson has reviewed the study titled <br />"Feasibility of the Arkansas Palley Conduit -August 2006. " As you are aware, <br />CWCB considers this to be a preliminary feasibility study, as it is not possible to <br />answer a number of significant questions related to the project at this time. No <br />further action is required of you on this item at this time, prior to consideration by the <br />General Assembly. However, prior to execution of a State loan contract, the <br />Enterprise will be required to complete the feasibility study to the satisfaction of the <br />CWCB Director. This will include those project, institutional and financial program <br />details discussed on page 4 of the CWCB Board Memo dated November 6, 2006, in <br />accordance with CWCB Water Project Loan Program Guidelines for feasibility studies. <br />Flood Protection • Water Supply Planning and Finance • Stream and Lake Protection <br />Water Supply Protection • Conservation and Drought Planning <br />