Windy Gap Approval Letter

• Contract/PO #: CT2018-2382
• Contractor Name: Northern Colorado Water Conservancy District
• Contract Type: Loan
• Loan Projects - Doc Type: Approval Letter

41/4 D N R COLORADO 1313 Sherman Street John Hickenlooper, Governor
CO Colorado Water Denver, CO 80203
Robert Randall, DNR Executive Director
Conservation Board P [phone]
Department of Natural Resources F(303)866-4474 James Eklund, CWCB Director
TO: Colorado Water Conservation Board Members
FROM: Kirk Russell, P.E., Finance Section Chief
Anna Mauss, P.E., Marketing Manager
DATE: November 16-17, 2016 Board Meeting (Updated November 17, 2016)
AGENDA ITEM: 9d. Large Water Project Financing Authorization
(1) Northern Colorado Water Conservancy Municipal Sub District - Windy Gap
Firming Project
Introduction
The Windy Gap Firming Project is a regional water project with 13 participants to improve the
reliability of water supplies from the Windy Gap Project. Built between 1981 and 1985, the Windy Gap
Project diverts water from the Colorado River. That water is pumped to Lake Granby and is delivered
through the Colorado-Big Thompson system. During wet periods when Lake Granby is full, the Windy
Gap Pump Plant cannot operate due to the lack of reservoir storage for Windy Gap Project water and in
dry periods it cannot divert water from the Colorado River due to its junior water rights. The Windy
Gap Firming Project includes the construction of a new 90,000 acre-foot reservoir called Chimney
Hollow, to be located east of the continental divide, southwest of Loveland and just west of Carter
Lake. The current cost estimate of the project is approximately $400 million. The CWCB currently does
not have the funding capacity to finance the entire project, so staff is working with the participants
and other funding entities to evaluate pooled financing options. See attached Project Data Sheet for a
location map and project summary.
Staff Recommendation (Board approved Staff Recommendation on November 16, 2016)
Staff recommends the Board request the General Assembly authorize up to $90 million in loans to the
participants in the Windy Gap Firming Project in the 2017 CWCB Projects Bill.
Additional Conditions:
Prior to execution of a loan contract, the borrower must submit a loan application and loan feasibility
study for review by CWCB staff and for approval by the Board.
Background
Windy Gap Firming Project participants include: Broomfield, Central Weld County Water District, Erie,
Evans, Fort Lupton, Greeley, Lafayette, Little Thompson Water District, Longmont, Louisville,
Loveland, Platte River Power Authority, and Superior. It is anticipated that the Municipal Subdistrict of
the Northern Colorado Water Conservancy District, acting by and through its Windy Gap Firming Project
Water Activity Enterprise, will be the borrower on a pooled financing. The primary financing will
possibly come from the sale of a revenue bond issued by the Colorado Water Resources and Power
Development Authority (CWRPDA). The bond would be secured by a senior lien on payments from
participants involved in the pooled financing. CWCB would provide a subordinate loan secured by a
junior lien on the payments of participants.
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Interstate Compact Compliance • Watershed Protection • Flood Planning a Mitigation • Stream a Lake Protection 1 c''
Water Project Loans a Grants •Water Modeling • Conservation a Drought Planning • Water Supply Planning * *'