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3. Formation of nonprofit corporations to qualify as co- <br />sponsors - If this approach is adopted, the paradox Valley Canal and <br />Reservoir Company would act as the sponsor of the project and the non- <br />profit corporations would act as co- sponsors. Those ditches that are now <br />individually owned or owned as partnerships would have to form mutual <br />ditch companies or some other type of nonprofit corporation to qualify as <br />co- sponsors. It should be pointed out that it is not now known what work <br />will have to be accomplished on ditches and ditch heads. This will be <br />determined at a later date. It may be the case that on some ditches no <br />work will have to be done in order to follow the work plan. <br />In discussing these matters, it was a consensus of opinion that <br />this was probably the simplest and most desirable approach. <br />Before the Soil Conservation Service can proceed with the pre- <br />liminary plan for this project, a letter of intent must be given, which <br />sets forth which one of the above plans the sponsors plan to follow in <br />financing the project. <br />It was pointed out that at the annual meeting of the company, <br />it should be understood that regardless of which approach is adopted to <br />finance the project, agreements will have to be drafted among the parties <br />so as to pay for any loan. <br />DHH:mm <br />Memo -3- November 18, 1964 <br />