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<br />present lack of economically viable demands for water in western <br />Colorado. In this context, it raises the issue of the extent to <br />which new projects should be constructed in anticipation, but not <br />the certainty, of future demands developing. Second, the <br />project, because it lies on and is surrounded by privately owned <br />lands, raises the issue of private gains being reaped from a <br />public investment. Third, and as a corollary, there is the issue <br />of public access to and use of a newly created recreational <br />resource, the construction of which would be financed with public <br />funds. <br /> <br />After deliberating about these issues at some length, the <br />Board concluded that the project should be favorably recommended <br />to the General Assembly in order that important issues of first <br />impression could receive the legislature's attention. However, <br />as specified below, the Board is of the opinion that the project, <br />if authorized, should be subject to several conditions. <br /> <br />These conditions are designed to protect the proposed state <br />(CWCB) investment, reflect the public's interest in the <br />recreational resource to be created, and obtain for the state any <br />returri on a potentially high risk investment which may be <br />realized through appreciation in land values. The latter <br />condition is patterned after the equity ventures frequently <br />employed in the private sector, in which investors in high risk <br />enterprises seek not only a return of the capital they have put <br />at risk, but also a portion of the profits realized if the <br />venture proves fruitful. <br /> <br />Recommendation <br /> <br />The Board recommends that the General Assembly authorize <br />$6,000,000 for the project, repayable over 40 years in annual <br />installments of $407,960, provided that monies for the project <br />shall not be made available until the following conditions have <br />been met by the Upper Yampa Water Conservancy District: <br /> <br />1. Repayment of the Board's investment shall be guaranteed <br />with the District's ad valorem taxes and revenues from <br />the sale of project water, contracts for such. sales to <br />be executed to the Board's satisfaction prior to the <br />initiation of construction on the project. <br /> <br />2. Any lands and water rights to be purchased by the <br />District for the project shall be appraised by an <br />independent appraiser or appraisers of the Board's <br />choice and the amounts to be paid by the District for <br />such lands and water rights shall be subject to the <br />Board's prior approval. <br /> <br />-4- <br />