C150332 Approval Letter 3/23/12

• Contract/PO #: CT2015-033
• Contract/PO #: C150332
• Contractor Name: Terrace Irrigation Company
• Contract Type: Loan
• Water District: 3
• County: Conejos
• Loan Projects - Doc Type: Approval Letter

STATE OF COLORADO
Colorado Water Conservation Board
Department of Natural Resources
1313 Sherman Sheet, Room 721
Denver, Colorado 80203
Phone: [phone]
Fax: [phone]
www.cwcb.state.co.us
TO: Colorado Water Conservation Board Members
FROM: Ryan Edwards, P.E., Project Manager Wl _
Kirk Russell, P.E., Chief
l�e�
Finance Section q-
DATE: March 9, 2012 (Updated March 23, 2012)
John W. Hickenlooper
Governor
Mike King
DNR Executive Director
Jennifer L. Gimbel
CWCB Director
SUBJECT: Agenda Item 16a, March 20 -21, 2012 Board Meeting
Finance Section/Water Supply Planning
Terrace Irrigation Company — Spillway Replacement Project
Water Project Loan — Construction Fund
Introduction
The Terrace Irrigation Company (Company) is applying for a loan for the Spillway Replacement
Project (Project). The purpose of the Project is to remove a seven -foot gauge height restriction
imposed by the State Engineer's Office (SEO). The total Project cost is estimated to be $4,500,000.
The Company has requested a loan for $1,000,000, a Water Supply Reserve Account (WSRA) grant
for $1,500,000, and a Summitville Natural Resource Damage (NRD) grant for $2,000,000 to fund
the construction of the Project. In conjunction with the new loan request, the Company is also
seeking a consolidation of the balance on its three existing CWCB loans in consideration for
2,000AF of instream flow storage rights in Terrace Reservoir. The existing loans have a combined
principal balance of $1,724,721. See attached Project Data Sheet for a location map and project
summary.
Staff Recommendation (Board approved recommendation on March 20, 2012)
Staff recommends the Board approve a loan, from the Construction Fund, not to exceed $2,751,968
($2,724,721 for project costs and $27,247 for the 1% Loan Service Fee) to the Terrace Irrigation
Company for the Spillway Replacement Project. The loan terms shall be 30 years at the agricultural
restricted reservoir interest rate of 1.75% per annum. Security for the loan shall be in compliance
with CWCB Financial Policy #5.
Staff further recommends the contract include a condition stating: Should the Project fail to reach
substantial completion before expiration of the contract the Project will initiate repayment at an
interest rate of 4.15 % in lieu of 1.75 %.
Interstate & Federal • Watershed & Flood Protection • Stream & Lake Protection • Finance
Water Information • Water Conservation & Drought Planning • Water Supply Planning