C150327 Deferral Approval Letter

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Big Elk Meadows Association January 17, 2014 (Updated January 29, 2014) Page 2 of 3 Background Agenda Item 17a The Association has one CWCB loan as shown in Table 1. This loan was for improvements to Meadow Lake Dam, two monitoring stations, and Ish Reservoir improvements. The Project was substantially completed on February 1, 2013. Table 1: CWCB Loan Contract Summary Loan Contract Contract Current Maturity Annual Collateral Contract Date Amount Balance Date Payment C150327 2/15i2012 $272,700 $272,700 2043 $16,741.47 Land (40-acre parcel) During the September 2013 flood, measured rainfall in and around Big Elk Meadows exceeded the 1,000-year Average Recurrence Interval for rainfall. Flow along the West Fork of the Little Thompson reached historic levels and resulted in the destruction of all five dams (including Meadow Lake Dam); both loan funded flow monitoring stations; the community's access road (CR- 47); the majority of interior roads; and the water, power, and telephone services. Flood damage was extensive enough to require evacuation of the community via military helicopters. Power was restored on November 8 and CR-47 opened for general access on December 13. Residences in the community are not able to return full time until the water service is restored, currently planned for July 2014. To repair the dams and monitoring stations the Association has requested an emergency loan from the CWCB (See Agenda Item 16b of this Board Meeting) and has also sought CWCB/Northern grant funds. The Association is working with FEMA to determine eligibility for reimbursements. FEMA has indicated repairs to the water system and dams are eligible for federal assistance but not roadways and general site cleanup. Discussion The Board has the statutory authority under § 37-60-120 (3), C.R.S. (2013), to adjust the interest rate, extend the repayment period, or defer one or more annual payments provided that the applicant has demonstrated it has encountered significant and unexpected financial difficulties, and it has been duly diligent in its efforts to comply with the repayment provisions of its contract with the Board. Financial Difficulties: The September 2013 flood event brought significant and unexpected financial difficulties to the Association. Repairs to the five dams and two measurement structures alone are estimated at $1,900,000. It is estimated that other repairs will approach $2 million. These repairs will be funded through CWCB and SBA emergency loans, FEMA reimbursements, and special assessments. Diligent Efforts to Repay: Interest during construction (IDC) was paid promptly upon project completion keeping the loan in good standing. The first annual loan payment is due on February 1, 2014. The Authority was prepared to make an on-time payment before the September 2013 flood event. Interest Rate and Repayment Period: The Association requests CWCB to adjust the interest rate during the deferral period from 4.5% to 0%. After the deferral period the interest rate will revert to 4.5%. The request for 0% interest rate during deferment is in line with CWCB's emergency loan program created to help repair diversion structures and dams along the river corridor in response to this flood event. Those emergency loans include three years of no payments and 0% interest. The