CT2017-2880 Attorney Opinion Letter

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Colorado Water Conservation Board Town of Firestone, Colorado March 15, 2017 Page 2 Revenue on a parity with the Parity Indebtedness, if any, hereafter issued. No filings or recordings are required under the Colorado Uniform Commercial Code in order to create a lien on the Pledged Revenue, and all actions have been taken as required by Section 11-57-208, Colorado Revised Statutes. 3. The Loan Documents have been duly authorized, executed and delivered by authorized officers of the Borrower and, assuming in the case of the Loan Contract and the Security Agreement, that the CWCB has all the requisite power and authority to authorize, execute and deliver, and has duly authorized, executed and delivered the Loan Contract and the Security Agreement, the Loan Documents constitute legal, valid and binding obligations of the Borrower enforceable in accordance with their respective terms. 4. There are no provisions of the Colorado Constitution or any other state or applicable and binding local law that prevent the Loan Documents from binding the Borrower; the execution and delivery of the Loan Documents are not subject to the limitations of Article X, Section 20 of the Colorado Constitution ("TABOR") because the Borrower constitutes an enterprise under TABOR as of the date hereof. The performance of the obligations of the Borrower under the Loan Documents is not subject to the limitations of TABOR as long as the Borrower continues to qualify as an enterprise under TABOR. If the Borrower ceases to qualify as an enterprise under TABOR, the Loan Documents will continue to constitute legal, valid and binding obligations of the Borrower enforceable in accordance with their respective terms subject to the revenue and spending limitations of TABOR; provided, however, that if the Borrower at any time ceases to qualify as an enterprise under TABOR, (a) the Borrower may impose any increased fees, rates and charges of the water system without voter approval; (b) all revenues of the Borrower used to pay Loan Payments are to be included in the Town fiscal year spending limit under Section 7(d) of TABOR, except that creation of bonded debt increases fiscal year spending by the amount of debt service so funded and debt service changes and reductions are exceptions to, and not part of, the Town revenue and spending base and limits; and (c) if the Town is required to reduce spending in order to comply with its fiscal year spending limit under Section 7(b) of TABOR, the Tow will first be required to reduce spending for purposes for which it does not have an obligation under law or by contract prior to reducing spending required to comply with the other covenants contained in the Loan Documents. The opinions expressed in this opinion letter are subject to the following: The obligations of the Borrower pursuant to the Loan Documents are limited by bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting creditors' rights generally, and by equitable principles, whether considered at law or in equity.