Central Colorado Approval Letter

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Central Colorado Water Conservancy District Agenda Item 29e May 9,2014(Updated May 23,2014) Page 3 of 7 Background The District is located in the South Platte River basin between Denver and Fort Morgan including Beebe Draw, and the lower portions of the Box Elder Creek and Lost Creek drainages. Its service area covers portions of several cities including: Thornton, Brighton, Greeley and Fort Morgan; as well as numerous smaller rural communities that include: Fort Lupton, Platteville, Gilcrest, LaSalle, Kersey, Hudson, and Wiggins. In total, approximately 210,000 acres of irrigated agricultural lands are served by the District. The Groundwater Management Subdistrict(GMS), formed in 1973, and the Well Augmentation Subdistrict(WAS), formed in 2004, are two subdistricts within the District. The subdistricts are separate legal entities with distinct legal boundaries. Collectively,the subdistricts provide augmentation water for approximately 1,400 wells. On an annual basis, GMS and WAS issues a quota to member wells if augmentation water supplies cannot fully meet the contracted demand. The quota is the percentage of a well's contracted amount that it is allowed to pump for the year. The GMS quota has averaged 30% since 2005.The WAS quota was 0%between 2005 and 2012, but was able to issue a 5% quota in 2013. The GMS and WAS quotas for 2014 has been set at 45% and 20%, respectively. Loan Feasibility Study Ed Armbruster, P.E. with White Sands Water Engineers, Inc., prepared the Loan Feasibility Study titled"Central Colorado Water Conservancy District Participation in the Chatfield Reallocation Project," dated March 2014. The study was prepared in accordance with CWCB guidelines and includes an alternative analysis, cost estimates, and financial statements. The feasibility study relies on the FR/EIS prepared by the Corps, and the Fish, Wildlife and Recreation Mitigation Plan (FWRMP)prepared by the Reallocation Participants in accordance with C.R.S. 37-60-122.2. Borrower—Central Colorado Water Conservancy District The District was established in 1965 under the provisions of the 1937 Water Conservancy Act of the State of Colorado with the principal purpose of providing for the conservation of water resources for the greatest beneficial use of water within the District's boundaries. The primary sources of income for the District are tax revenues and assessments paid by GMS and WAS for use of the District's water rights and infrastructure. The District is controlled by a 15-member board. The same board also controls GMS and WAS. In November 2012, voters authorized the District to incur debt for its participation in the Reallocation. Water Rights The District maintains a vast water rights portfolio including 41 water right decrees and 5 pending water right decrees. GMS and WAS have decreed augmentation plans in Case No. 02CW335 and 03CW099, respectively. Combined, GMS and WAS have contracts to provide up to 87,000 AF of augmentation water. The District owns 22,300 AF of a conditional right for storage in Chatfield in Case No. 83CW184. CHATFIELD REALLOCATION DESCRIPTION THE GOAL OF THE REALLOCATION IS TO HELP ENABLE WATER PROVIDERS SUPPLY WATER TO LOCAL USERS IN RESPONSE TO RAPIDLY INCREASING DEMAND. THE STATEWIDE WATER SUPPLY INITIATIVE 2010 REPORT(SWSI 2010)HAS IDENTIFIED THE PROJECTED GAP IN MUNICIPAL&INDUSTRIAL(M&I) AND SELF-SUPPLIED INDUSTRIAL(SSI)USE IN THE METRO BASIN ALONE WILL BE BETWEEN 180,000 AND 280,000 AF PER YEAR BY THE YEAR 2050.THE CHATFIELD REALLOCATION PROJECT IS IDENTIFIED IN SWSI 2010 AS AN IDENTIFIED PROJECT AND PROCESS(IPP) FOR THE METRO AND SOUTH PLATTE BASINS. WITH THE COMPLETION OF ALL METRO BASIN IPPs,THE M&I AND SSI GAP