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Arkansas Valley Conduit <br />November 13-15, 2006 <br />Agenda Item10a <br />revenues, including revenues received from the Arkansas Valley Conduit participants through <br />Participant Funding Agreements. <br />Staff further recommends that final approval of the loan be conditioned upon all other standard <br />contracting provisions of the CWCB, as well as the following: <br />1. Final Feasibility Study -Prior to execution of a State loan contract, the project sponsor is <br />required to complete the feasibility study to the satisfaction of the CWCB Director or his <br />designee, including institutional and financial program details. <br />2. Participant Funding Agreements <br />a. Prior to execution of a State loan contract, all proposed Participant Funding Agreements <br />contemplated in the Loan Application & Feasibility Study shall be executed, and copies <br />submitted to the CWCB. The format of the agreements shall be as agreed upon by the <br />CWCB and the Enterprise prior to execution with participants. <br />b. Water Allocation -Participant Funding Agreements shall address water allocation to the <br />Arkansas Valley Conduit. Based on the annual availability of Fry-Ark Project water, the <br />District and the Enterprise shall make every attempt to allocated water in such a manner <br />as to meet the requested demand (6,555 acre feet) of the participants. In average <br />years, this will require the allocation of a minimum of 776 AF of available return flows to <br />the project, or an equivalent amount of water from other sources. <br />3. Conservation Plans - Prior to execution of a State loan contract, all "covered entities" <br />participating in the project are required to have aCWCB-approved Water Conservation Plan <br />in place. <br />4. Federal Authorization - No State loan contract shall be executed until Federal legislation to <br />authorize the federal/local cost-share for the Arkansas Valley Conduit has been approved. <br />5. Federal Funding Appropriation - No State loan contract shall be executed until Federal <br />legislation appropriating construction funds for the Arkansas Valley Conduit has been <br />approved. <br />6. CWCB Loan Contract - <br />a. Time Limit -Provisions pertaining to the time limit for loan approval shall be as <br />outlined in CWCB Financial Policy #2 (Time Limits), with the following exception: <br />The moneys appropriated in the CWCB Water Projects Bill shall remain available <br />for the designated purposes until the project is completed; except that if the <br />SECWCD Water Activity Enterprise does not enter into a loan contract with the <br />CWCB within two years after the effective date of the CWCB Water Projects Bill <br />(May 2007), then the moneys appropriated shall no longer be available for the <br />designated purposes and shall revert back to the Severance Tax Trust Fund <br />Perpetual Base Account. <br />b. Step-up Provision -The contract with SECWCD Water Activity Enterprise, shall <br />include a "step-up" provision, requiring that if any project participants fail to make <br />their loan repayment to SECWCD, the Enterprise will cover the shortfall. <br />Page 10 of 12 <br />