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~ \ e Contract number CI53318 has had no break in its repayment schedule. Contracts CI53386 and CI53478 have both been current in their repayments since 1994. Discussion The Board has the statutory authority under Section 37-60-120 (3), CRS to make loan deferments provided the borrower has encountered significant and unexpected financial difficulties, and that it has been duly diligent in its efforts to comply with the repayment provisions of its contract with the Board. The District's current request for a loan deferral results in two of the District's loan contracts with the CWCB having had three one-year loan payment deferral requests in the past 13 years. While the circumstances surrounding the deferrals legitimately are hardships to the District, and the continued efficient operations of the Reservoir is critical to Compact compliance, it seems that the problem with the outlet tunnel capacity may be a future recurring problem. Unless the Reservoir's outlet hydraulics problems can be permanently solved, future similar repair expenditures may be expected. e In order to maintain the long-term integrity of the loans, it is the staff recommendation that the Board grant the District's deferral request'. The deferral would be approved on the condition that the deferred interest payments be added to the current loan balances, and the resulting new balances be re-amortized over the remaining lives of the loans. This re-financing of the loans allows them to be repaid at approximately the same payoff date and still allow the District relief from its current fmancial hardship. Staff has also suggested to the District that a consolidation,' of the two loans, combined with a project to correct the outlet tunnel restrictions may provide a long term financial solution to this problem. The District may be encouraged to apply for a feasibility study grant from the recently created (SB 99-173) Construction Fund Feasibility Study Small Grant Account at the January Board meeting. Recommendation The staff recommends the Board adopt a resolution to approve the San Luis Valley Irrigation District's request for financial relief by granting a one-year, 100% deferment of their December 1999 contract loan payment in the amoUnt of $30,660.37, and their August 2000 contract loan payment in the amount of $30,014.20. The deferred interest amount of each loan will be added to its respective current loan balance that will then be re-amortized over the loan's remaining life. The deferrals wilf be based on the Board's finding that the District has encountered significant and unexpected financial difficulties, and that it has been duly diligent in its efforts to comply with the repayment provisions of its contracts with the Board. e