C150233 Approval Letter 5/18/12

• Contract/PO #: C150233
• Contractor Name: Tom Hill
• Contract Type: Loan
• County: Grand
• Loan Projects - Doc Type: Approval Letter

STATE OF COLORADO
Colorado Water Conservation Board
Department of Natural Resources
1313 Sherman Street, Room 721
Denver, Colorado 80203
Phone: [phone]
Fax: [phone]
www. cwcb. state. co.us
TO: Colorado Water Conservation Board Members
FROM: Kirk Russell, P.E., Chief
Finance Section
DATE: May 4, 2012 (UPDATED May 18, 2012)
SUBJECT: Agenda Item 26a, May 15-16,2012 Board Meeting
Finance Section — Changes to Existing Loans
Tom Hill — McElroy Dam Rehabilitation Project
Introduction
John W. Hickenlooper
Governor
Mike King
DNR Executive Director
Jennifer L. Gimbel
CWCB Director
In November 2006 the CWCB approved a 30 -year loan to Tom Hill, a rancher in Grand County, for
$862,540 from the Severance Tax Trust Fund Perpetual Base Account. The loan was used to breach
and rehabilitate the McElroy Reservoir Dam which provides irrigation water to the Hill's Gore Pass
Ranch. The loan was secured by land and water rights associated with the Gore Pass Ranch. The
original Board approval has needed several modifications. A description of important events over
the past five years is provided in the memo along with a table of an Approximate Timeline.
In April the Hills made a partial payment of $40,000 towards the loan. Staff will ask the Board to
consider .a restructuring of the loan to improve the Hills ability to repay the loan until the Gore Pass
Ranch is sold. I
Staff Recommendation (Board Approved as Recommended on May 16, 2012)
Staff recommends the Board approve a loan amendment to restructure Loan Contract No. C 150233
from its current 10 year term to a term of 27 years at the agricultural rate of 2.50% per annum for
the remaining principal balance of $715,942.01. Security for the loan shall not change and is in
compliance with CWCB. Financial Policy #5.
Background
The McElroy Reservoir (Reservoir) has been owned and operated by Tom and Linda Hill for the
last 30 years. The Reservoir is located on State Land Board property and is authorized by a 10 -year
renewable lease terminating June 2016. The Hills use the water stored in the Reservoir to irrigate
hay on the 2,588 acre Gore Pass Ranch. The Ranch is located upstream of Wolford Mountain
Reservoir and diverts water from McElroy Creek.
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