C150159 Amended Approval Letter - Laserfiche WebLink

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4rphan Welis c�i' Wiggins LLC: -- (IlC Forgiveness Juiy t, 201 I Page 3 crf 4 Ageoda Itcm 27 • In. 2009 OWW sells assets paici far with CWCB loan funds, but not sec,ur.ed by [he loan contract, to cover the $140,Q0� in �ngineerin�; and le�;al fees. • From 2009 to present CWCH and OWW hav� been workin�; tog�ther to develop a solutian to address OWW's situation and outstanding debt. Discussion The past eight years for OWW has been a time consuming, expensive, and an emotionai endeavor, with Iess than desirable results, �s articulated in Mr. �iruntz's attaclied Ietter. CWCB in 20Q3 assumed the risk of providing loan funds to construct an. augmentation project without first having aat approved water court augmenta.tion plan. It is di.fficult, however, ta forecast an.y water court outcome and in most cases fundin.g is needed in advance to finance nec;cssary campon.ents of the borrawer's overall application process. Far the past 2 years OWW l�as actively tried to sell its au�nentation project in an effort to pay of#' its debt wvith CWCB. It appears that negotiatians with pc�tential buyers are corraplicated by OWW's contractual arrangement with CVVCB and the potential for 4WVil not being able to meet its obligation. I3uyers are waiting to see if QWW defaulis, allowing CWCB to assume ownership and sell the asset at a reduced aa�aounc. Yt has nat been staf�'s position tc� niove in the direction of default, but ta work with UVVW irt developing a long term soluiion tJ7at works in the best interest of bath parties. It is OWW's current pasition to adhere to the terms of its loan contract with CWCB, make their required an.nual payment of $SO,Q74.65, and to re-evaluate its positian under a revised set c�f cot�ditions a��d parameters in the future. It's OWW's opinion that rts ability to obtain an approved augmentation plan will improve, �ased on the lag time that ha.s occurred si�ice its wel.ls have been turn.ed af..f.. CWCB's collatera! positi.on on the original loan consists onty �f reeorded easements necessaxy tc� complete xhe work (i.e. pipeIine, recharge pon.ds, weIls, etc.). 'T'herefore, it is staf�'opinion that it is in the best interest af CWCB to work with OWW, given our current collateral position and the curreni economic en��i:ronmen.t. I:n. forgivi.ng �Sb,872.44 in II)C, CWCF� wi.11 receive 10 shares of Riverside i'rivate Reservoir Rights and 1 share �!' Jackson Private R�;sei�vair Ri�hts as additionai collaterai, val.ued at $�80,000 ($42kishare Riverside and $60KJshare Jaekson). This all�ws CWCI3 tc� svbstantial�y strengtheta its calla#er.al position, while OWVV commits to pay $95,739.28 in IDC and make its annua) payment of $50,074.65. I:� OW W cioes not meet its amealded eontxactual obligatian, CWC`B is i�i a rnuch t�etter �osition ta recc�up its investm.ent in the Project. Staf�'views the request by OWW to reduee iI)C; as an isc�lated, unique case, subject to the review and approval c�f'the I3oard, which cioes not grant any existi.�i� or future bozxower this co�asiderati.on.