CT2017-913 Approval Letter

• Contract/PO #: CT2017-913
• Contractor Name: Union Well Augmentation Group
• Contract Type: Loan
• Loan Projects - Doc Type: Approval Letter

DNR COLORADO 1313 Sherman Street John Hickenlooper, Governor
Denver, CO 80203
CO Colorado Water Robert Randall, Interim DNR
Conservation Board P [phone] Executive Director
Department of Natural Resources F(303)866-4474
James Eklund, CWCB Director
TO: Colorado Water Conservation Board Members
FROM: Jonathan Hernandez, P.E., Project Manager
Kirk Russell, P.E., Finance Section Chief ,-
DATE: May 18-19, 2016 Board Meeting (Updated May 20, 2016)
AGENDA ITEM: 21b. Water Project Loans
Union Well Augmentation Group - Union Reservoir Water Rights Purchase
Introduction
The Union Well Augmentation Group, Ltd. (Augmentation Group) is applying for a loan for the Union
Reservoir Water Rights Purchase (Project). The Augmentation Group runs an augmentation plan for
Union Ditch Company (Ditch Company) shareholders who wish to utilize their wells for supplemental
irrigation water. The purpose of the Project is to enable the Augmentation Group to provide additional
augmentation water to its shareholders by purchasing shares in the Union Reservoir Company (Reservoir
Company) for use in the augmentation plan. The total Project cost is estimated to be $273,000. The
Augmentation Group is requesting a loan from CWCB for approximately 90% of the Project Cost. See
attached Project Data Sheet for a location map and Project summary.
Staff Recommendation (Board approved Staff Recommendation on May 18, 2016 as modified below)
Staff recommends the Board approve a loan not to exceed $248,157 ($245,700 for Project costs and
$2,457 for the 1% service fee) to the Union Well Augmentation Group for costs related to the Union
Reservoir Water Rights Purchase from the Severancc Tax Perpetual Base Fund Construction Fund. The
loan terms shall be 20 years at a reduced agricultural interest rate of 1.45% per annum. Security for
the loan shall be in compliance with CWCB Financial Policy#5.
Staff additionally recommends the following contract condition:
a) The Augmentation Group will use the water rights purchased with the CWCB loan funds to
provide augmentation water for the irrigation of crops. If the water is no longer being used
for agricultural purposes CWCB may adjust the interest rate accordingly. The parties shall
amend this contract including a revised Promissory Note, to effect said change in interest
rate.
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Water Project Loans a Grants •Water Modeling • Conservation &Drought Planning •Water Supply Planning v) o,
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