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<br />, <br /> <br /> <br />," <br /> <br />KEN SAt.I\ZAR <br />Attorney General <br />BARBARA MCDoNNELL <br />Chief Deputy Attorney General <br />MICHAEL E. McLA(;HLAN <br />Solicitor Genel1l1 ' <br /> <br />STATE OF COLORADO <br />DEPARTMENT OF LAW ' <br /> <br />STATE'SEIIVICEIi BUILUING <br />152S Sherman Street - Sth Ploor <br />oenverf Colorado 80203 <br />I'Il0ne 303) 866-4500 <br />FAX 303) 866-5691 <br /> <br />OFFICE OF THE ATTORNEY GENERAL <br /> <br />August 24, 1999 <br /> <br />Greg Walcher, Executive Director <br />Colorado Department oflllatural Resources <br />1313 ShermlU1 St., 7th Floor <br />Denver, CO 80203 <br /> <br />RE: Colorado Water Conservation Board Construction Fund Loan Program <br /> <br />Dear Greg: <br /> <br />Over the last several weeks, concerns have been raised that the Colorado Water Conservation Board has <br />made loans from the Construction Fund that violated the statute that governs the CWCB. These concerns have been <br />based upon cenain findings in the Report of the State Auditor on the CWCB Construction Fund Loan Program dated <br />September 1998 ("Audit"). The Audit, in part, questioned whether Article 60 of Title 37, C.R.S. authorizes loans that <br />finlU1ce the purchase of water rights or existing wells. Based upon a review of the applicable law, I have concluded <br />thatthe CWCS acted lawfully in making those loans. This conclusion does not address the rationale forthe loans <br />but rather CWCS's legal authority to grant them. <br /> <br />The General Assembly created the CWCB to aid in the protection and development of the waters of the State <br />of Colorado. One of the CWCS '10 primary duties is to secLlre the maximum utilization of waters of the State, <br />inclUding Colorado's compact entitlements. ~ 37-60-106(1), C.R.s.. (1998). s.ection 37-60-119(J), C.R.s. (1998) <br />authorizes the CWCB to loan mone)' to enable the construction, rehabilitation, en largement or improvement of water <br />supply facilities that, in the CWCS's opinion, will conserve, etlect more efficient use of, develop, or protect the <br />water resources and supplies of the State of Colorado. The stated purpose ofsLlch loans is "to promote the general <br />welfare and safety ofthe citizens of this state and to protect the allocation of interstate waters to the state. . ~.n ~ 37- <br />60-119(1), C.R.S. (1998). This section also authorizes 10lU1s for flood control and hydroelectric energy facilities. ' <br /> <br />The ewcs recommends loans to the General Assembly each year in the Construction Fund Bill. which <br />identifies proposed borrowers and briefly describes the projects that the proposed loans will Imance. The General <br />Assembly and the Governor have approved CWCB loans forthe purchase of wells and water rights by enacting <br />Construction Fund Bills that specifically and expressly authorized SLlch loans. The four loans questioned in the <br />Audit are as follows: <br /> <br />Aristocrat Ranchettes Water Project, Tnc. .-- Purchase Water Shares (S.B. 96-153). (This loan to a non-profit <br />corporation financed the purChase of apprOXimately 50 acre-foot units of Colorado-Big Thompson Project water <br />'to provide water to a prefabricated home development, the Aristocrat Ranchette Subdivision located in Weld <br />County, solving Aristocrat's problem of a dwindling wster supply from Laramie-Fox Hills wells.) <br /> <br />Morgan County Quality Water District --- NCWCD Pipeline project changed to refinance the purchase of the Hay <br />Gulch Wells (S.B. 96"153, amending H.B. 95-1155). (This loan to a water district located in Morgan and <br />