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STATE OF COLORADO <br />Colorado Water Conservation Board <br />Department of Natural Resources <br />1313 Sherman Street, Room 721 <br />Denver, Colorado 80203 <br />Phone: (303) 866-3441 <br />FAX: (303) 866-4474 <br />www.cwcb.state.co.us <br />MEMORANDUM B''~~~ <br />(Updated November 28, 2006) Governor <br /> Russell George <br />TO: Colorado Water Conservation Board Members Executive Director <br /> Rod Kuharich <br />FROM: Bruce Johnson, P.E. cwcsDirector <br />Mike Serlet, P.E., Chief Dan McAuliffe <br />Water Supply Planning an Finance Section Deputy Director <br />DATE: November 6, 2006 <br />SUBJECT: Agenda Item 10a, November 13-15, 2006 Board Meeting <br />Water Suppty Planning and Finance Section -New Project Loans <br />SECWCD Water Activity Enterprise -Arkansas Valley Conduit <br />Introduction <br />The Southeastern Colorado Water Conservancy District ("District"), acting by and through its Water <br />Activity Enterprise ("Enterprise"), is applying fora $60,000,000 loan from the Severance Tax Trust <br />Fund Perpetual Base Account, to provide the 20% local share for construction of the Arkansas Valley <br />Conduit (AVC), a 138 mile water supply pipeline extending from Pueblo Reservoir to the City of Lamar. <br />The estimated total cost of the project is $300,000,000. Please see the attached Project Data Sheet. <br />Background <br />History -The Fryingpan-Arkansas Project was authorized in 1962 by Public Law 87-590 (76 <br />Stat.389), and was constructed between 1964 and 11982. The Project is atrans-mountain <br />diversion system that delivers supplemental water to cities; farmers and ranchers all along the <br />Arkansas River. Two components of the original design were conduits to move water from Pueblo <br />Reservoir to communities in need of clean water for treatment. One of these conduits, the Fountain <br />Valley Conduit, has already been built and has been delivering water to Colorado Springs and its <br />surrounding communities since 1985. The second conduit has not yet been built. The Fryingpan- <br />Arkansas legislation calls for the conduits to be paid for 100% by the communities that will be <br />receiving the water. The large and growing population of Colorado Springs and its surrounding <br />areas, made possible the construction of, and payoff of the Fountain Valley Conduit a reality. <br />However, the lower Arkansas Valley conduit, from Pueblo to Lamar, has never been built because <br />the communities could not afford 100% of the project cost, <br />Process Overview - In 2000, a group of water providers and governmental agencies in Otero <br />County formed a group called the Waterworks Committee. The group was formed to address water <br />issues and began the process of trying to get the Arkansas Valley Conduit built. This effort was <br />successful in bringing the necessary groups together and starting the process of moving the conduit <br />forward. The Waterworks Committee, under the oversight of the Enterprise requested a CWCB <br />Flood Protection • Water Supply Planning and Finance • Stream and Lake Protection <br />Water Supply Protection • Conservation and Drought Plaruling <br />