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AGREEMENT TO RESTRUCTURE COLORADO WATER CONSERVATION
<br /> BOARD DRY GULCH RESERVOIR LOAN CONTRACT NUMBER C150261
<br /> THIS AGREEMENT is entered into as of the last date any party signs this
<br /> Agreement, by and between the State of Colorado, acting by and through the
<br /> Department of Natural Resources, Colorado Water Conservation Board ("CWCB"),
<br /> and the Pagosa Area Water and Sanitation District ("PAWSD"), a political
<br /> subdivision of the State of Colorado and a quasi-municipal corporation, and the San
<br /> Juan Water Conservancy District ("SJWCD"), a political subdivision of the State of
<br /> Colorado and a quasi-municipal corporation. CWCB, PAWSD, and SJWCD shall
<br /> collectively be referred to herein as"Parties".
<br /> 1. Recitals.
<br /> WHEREAS, substantial time and effort was done to evaluate the long term
<br /> water needs of southwest Colorado, and in particular, Archuleta County, by
<br /> Southwestern Water Conservation District initially, and then by PAWSD and
<br /> SJWCD. A 1989 supply and demand study concluded water storage for
<br /> approximately 12,000 acre feet of water was needed for future growth through 2040.
<br /> Of the potential sites reviewed, the Dry Gulch location was determined to be the
<br /> best prospect; and
<br /> WHEREAS, in 2002, after a severe drought, coupled with massive wildfires,
<br /> PAWSD and SJWCD started working toward developing a water storage facility at
<br /> the Dry Gulch location, including acquisition of the site, permitting, cost estimates,
<br /> engineering, etc. ("the Project"); and
<br /> WHEREAS, the CWCB approved a grant (Contract No. C150408) to SJWCD
<br /> for one million dollars ($1,000,000.00) ("the Grant") to be used in the purchase of
<br /> land for the Project. The CWCB later approved a loan (Contract No. C150261) to
<br /> PAWSD for$11,217,000 ("the Loan") to finance the purchase of land for the Project;
<br /> and
<br /> WHEREAS, PAWSD and SJWCD purchased the Running Iron Ranch for the
<br /> sum of$10,219,363, which utilized the full amount of the Grant and $9,219,363 of
<br /> the Loan. Running Iron Ranch consists of approximately 660 acres along with
<br /> water rights represented by shares of stock in the Park Ditch Company and
<br /> encumbered by leases, including as described in the documents recorded at
<br /> reception numbers: 20800088, 20800089, 20800090, 20800091, 20800092, 20800093,
<br /> 20800094, 20800097, 20800101, 20800102 in Archuleta County, Colorado
<br /> (hereinafter collectively referred to as"Running Iron Ranch"). No further purchases
<br /> of land were made for the Project; and
<br /> WHEREAS, PAWSD elected to close out the Loan in September 2012. On
<br /> April 30, 2013, the CWCB approved Amendment No. 1 to the Loan, which modified
<br /> APPENDIX A
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