BOARD00235

• Board Meeting Date: 7/23/2002
• Description: CF Section - Changes in Existing Loans Arkansas Groundwater Users Association - Loan Payment Deferral Request
• Board Meetings - Doc Type: Memo

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AGUA must file an application for change of water right and obtain a decree approving the use of
the water right for augmentation purposes. Given the unanticipated legal and engineering costs ..
associated with obtaining the decree (estimated at between $100,000 to $150,000), and the financial ,.,
impact of this year's drought on the shareholders, AGUA does not feel they will be able to meet
their CWCB loan financial responsibilities for the i next several years. AGUA therefore has
requested a deferment of their $25,550.33 loan paym~nt for contract #CI53808, due April 1, 2002
and to continue through April I, 2005.

AGUA currently has two loans in payback with the CWCB as shown below:

Loan
Number

Date of
Contract

Current
Terms Balance

Annual
Pavrnent

Due
Date

Principal

CI53800
CI53808

10/23/97
2/24/98

$25,000
$590,590

3% 10 yrs $11,319
3%-40 yrs $566,380

$3,082.27
$25,550.33

Dec. 15
April I

AGUA is current in their loan contract payments.

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 Board's Financial Policy #10 (attached) clearly provides guidance in ..
the resolution of this request. ,.,

In order to maintain the long-term integrity of the loan, it is the staff recommendation that the
Board grant AGUA's deferral request. At AGUA's request, the deferral would be approved on the
condition that the deferred interest payment be added! to the current loan balance, and the resulting
new balance be re-amortized over the remaining terrp of the loan. This re-financing of the loan
allows it to be repaid and still allow AGUA relief fro~ its current financial hardship.

Recommendation

The staff recommends the Board adopt a resolution to approve the Arkansas Groundwater
Users Association's request for financial relief by granting a four-year, 100% deferment of their
April 1, 2002-05 contract #C153808 loan payment 'in the amount of $25,550.33. The deferred
interest amount of the loan will be added to the curre):tt loan balance that will then be re-amortized
over the loan's remaining life. The deferral is 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.

Flood Protection. Water Project Planning and Financing. Stream and Lake Protection
Water Supply Protection. Conservation Planning

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