ALP 6

Board Meeting Minutes
August 16, 2012
Page 3
of the EIAF grant, the Board requested that Mr. Kuhn introduce Resolution No. 12 -30, to approve a direct
DWRF loan to the Town of Stratton and execution of a Loan Agreement and other necessary documents
therefor, subject to the teens and conditions as stated in Exhibit A: 1) compliance with the three
mandatory TMF requirements in the letter dated August 2, 2012; 2) the Town shall institute an increase in
user rates sufficient to meet the Authority's existing and future rate covenants prior to loan execution; and
3) the Town must provide documentation acceptable to Authority staff to demonstrate that it is meeting its
existing operations and maintenance reserve covenants prior to loan execution. Upon discussion, the
Board added a fourth condition, that the Town must provide documentation acceptable to Authority staff
to demonstrate compliance with all terms and conditions and covenants in its existing WPCRF loan prior
to execution.
Motion by: Greg Fisher
2 11d by Ann Nichols
Vote: Motion carried
Project and Matching Account Updates
Keith McLaughlin reported that since the previous Board meeting, Fitch had upgraded AIG's rating to
BBB+ (Stable Outlook) from BBB (Positive Outlook). AIG's S &P rating remained at A- but the outlook
was lowered from Stable to Negative. Moody's rating of AIG remained unchanged at Baal, Stable. The
Authority has six repurchase agreements with AIG with a principal balance of more than $50 million.
HSBC's S &P outlook was lowered from Stable to Negative, but the Authority's only repurchase
agreement with HSBC matured on September 2, 2012. Mr. McLaughlin reviewed the status of' all
repurchase agreements and stated that a settlement agreement had been reached with GE Capital (Trinity)
for approximately $30 million, of which the Authority would receive approximately $36,477. A motion
was made to authorize the Authority to participate in the settlement agreement.
Motion by: Ty Wattenberg
2" d by: Frank Kugel
Vote: Motion carried
Status of Projects
Cassey Eyestone reported that there were no DWRF Planning and Design Grants left for 2012. For the
December meeting, applications are anticipated from Crested Butte South Metropolitan District and
Timbers Water and Sanitation District. Ms. Eyestone stated that the Town of Ordway may return in
December with a smaller project. Mr. McLaughlin had visited the Town of Ordway to provide assistance
wherever possible. The Board requested a Program Review Committee session to address loans in
distress.
Water Pollution Control Revolving Fund
ARRA Funding Update — Keith McLaughlin reported that the ARRA Capitalization Grant had been frilly
spent and should be closed in October.
Town of Olney Springs, Resolution No. 12 -41 and Resolution. No. 12 -57
Cassey Eyestone introduced Carl McClure, Board member from the Town of Olney Springs. Ms.
Eyestone reported that the Town of Olney Springs had withdrawn its application from the August Board
meeting due to the need to change the loan pledge from a water and sewer pledge to a sewer only pledge.
The Town is creating a separate sewer enterprise to resolve the issue, and the proposed loan will be
secured by sewer system revenue. Ms. Eyestone presented the request from the Town of Olney Springs
for a WPCRF Disadvantaged Communities direct loan in the amount of $573,000, of which $250,000 will
be in the form of Principal Forgiveness, and a $250,000 wastewater GAP grant. The Town was awarded
a $10,000 Planning and Design Grant and a CDB Grant of $600,000 in May 2011, to cover the remaining
total project cost of $1,433,000. The project consists of modifying the existing lagoon system into a two
cell, lined stabilization lagoon system followed by a pair of constructed wetlands. The project also
includes the removal and disposal of biosolids as well as existing structures, piping and manholes. The