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\� (hphan Welis of 1A+iggins LI...0 — LfX' Forgiveness Iuly L, 20! 1 Page 2 of 4 Staff Recommendation u Agenda Itcm 27 Staff recc�mmends that the Board approvc a reductian in IDC f�r Orphan Wells of Wiggin's LLC, f'ram $152,611.�2 to $95,739.28. $95,20S.Sb of the TDC due will be rolled i.nto OWW's loan, brin�;ing its ti.nal loan balance to $1,048,077.00, which includes a 1% loan service fee, at an interest rate af 2.S°1o, aznortized over. 30 years. UWW r�viil pay the remaining IDC balance of $533.73 directly to CWCB. Additionally, OWW agrees to amend its loan contract with CWCB to include ten shares of Riverside Private Reservoir Rights and one share c�f Jackson Lake Priva#e Reservoir Rights, as callateral and to provide copies of all executed easeme��ts associated with the project. Backgroand In November of 2003 OWV� was cornprised of 31 separate a��ricultural aperators, 45 wells and 4,50Q acres of irrigated tarmland. Tliese lands received irrigation waier only from junior welis, and were not within the servic� area of an exrtsting agricuitural ditch system. Depletions from the 45 wells must be replaced during times wlien tl�ere is a cali an the river by senior ciownstream water righfis. The Ciroundwater Appropriators of the South Platte (GASP) used to cover these depletions, but has sin.c� dissolved, therefore requiring the 31 operators to find alternate means to cover iheir well depletions. In 2003, the va.rious operators form.ed an Limited Liabiiity Company (LLC), registered in the State of Coloradq under �he narne of Orphan VVells of Wi�i��s, LLG. The company developed a recharge/well augmentation pta�a to generate credits to oi�'set the depletions fro;n the 45 wells. The plan involved the construction of oiie recharge well, orte augtnentafiaon weil, five miles of pipeline, and vaxious recharge sites, at an estimated total cast of $ l,] 53,000. 'I'he pian was reviewed and appraved. for a construction loan by CWCT3 at its Novemb�:r 2�03 I3oard Meeting. The fotlowing is a brief surnmary of the events that liave taken place since ioan approval: • During 2004 UWW completes pipeline and the instaltation of two weils, one at ihe river and. the c�th�r at the end of'the pipeline. • Durin�; 2005 t.hru 20(�6 4WW attempts to address objectiorYS to its augmentation plan and to purchasE: and/c�r lease additionat �eni�r water. •(n eariy Z(l07 fJW�V decides to reduce its number of inembers from 3l to 1$ and ta reduce i.is irri�;ated farrnla�zd by 50%, tl�erefore placing itself in a better positian tc� h.ave its au�;mentati�n plan appr.oved in water cc�urt. OVVW water caurt applicatian was amendea in 20�7 ta reflect this change. • Fn March af 2007, .Tudge Kline ruled that OWW was nc�t 3iable for past depletions of members removed fronn the amended application. • Maxch 20Q7 to Uctc�ber 2Q08, OW� spends an additional $140,U00 in �.�ngineering and l�gal fees to prepare for #rial, schedule� for ()ctgber af 2008. � On Octaber 1, 2008, Judge Kline revers�s I�is decision a�id requires QWW to cover past depletions of inembers that had drop�red under the amended applicati�n. This re-ruling corlaps�s (7�VW's abil.ity to meet i�.s deptetians with the water availal�Ie uncier. its propased augm�ntation plan.