CT2017-3213 Notice of Claim of Lein or Security Interest

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DEERE & AULT January 31, 2017 Colorado Water Conservation Board Finance Section Attn: Jonathan Hernandez,P.E. 1313 Sherman St., Room 718 Denver, CO 80203 Re: St. Vrain and Left Hand Water Conservancy District—C-BT Units as Collateral Dear Mr. Hernandez: As you are aware,the CWCB Board approved the St. Vrain and Left Hand Water Conservancy District's (District) Construction Fund loan request, including the District's commitment to provide up to 71 Colorado-Big Thompson (C-BT)Project units it owns as collateral. This letter is provided to provide a basis for valuing those C-BT units. We receive a monthly report from Stratecon, Inc. reflecting C-BT transactions approximately one month in arears. The monthly report describes the acquirers, the suppliers,the acquirer's use (typically municipal),the prior use,the number of units in each transaction and the terms of the transactions. Often the terms are "Transfer for Taps",but there are nearly always transactions for cash. Generally,we have seen the value of C-BT units increase over time, sometimes dramatically, as fewer and fewer become available for purchase. The table below shows the sales transacted during the past six months for which sales information is available (July through December, 2016). Description July,2016 August September October November December Number of C-BT Units Transacted(with 5 106 290 93 229 111 values reported) Range of Cash Sale $25,000- $26,000- $26,000- $26,000- $26,000- $26,000 Values(per unit $26,500 $26,200 $27,356 $26,500 $26,500 Weighted Average $25,900 $26,011 $27,301 $26,473 $26,306 $26,000 Cash Value(per unit Note: The bulk of the September,2016 transactions(276 units)were part of an auction of land and water. The$27,356 per unit sales price is as reported by Hall and Hall Auctions. Based on the recent sales, I believe it is reasonable to value the C-BT units at $26,000 per unit. Considering the CWCB policy of requiring collateral at 110 percent of the debt amount, collateralizing 27 of the District's C-BT units ($702,000) would be more than sufficient for the District's approved loan of$619,130 (including the 1% service fee). 600 S.Airport Road,Building A,Suite 205 Longmont,CO 80503 Phone: 303-651-1468• Fax: 303-651-1469