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<br />I. <br /> <br />Williams, Turner & Holmes, P.c. <br /> <br />"1 <br /> <br />ATTORNEYS AT lAW <br /> <br />e <br /> <br />February 17, 2000 <br /> <br />Anthon~' W. Williams <br /> <br />).0. Snodgrass <br /> <br />SlnanM.Cortc: <br /> <br />Linda Bassi <br />Office of the Attorney General <br />Natural Resources Section <br />1525 Shennan Street, 5th Floor <br />Denver, CO 80203 <br /> <br />- <br />-.," <br /> <br />William D. Pr:akken <br /> <br />David}. Turn.:c' <br /> <br />Mark A. Hc:rmundstad. <br /> <br />James M. Colosky. Poc. <br /> <br />Kimen M. KUl'3rh~ <br /> <br />Re: CWCB Loans to Ute Water Activity Enterprise (an enterprise of the <br />Ute Water Conservancy District. <br /> <br />Thomas K. 5no~rass <br /> <br />OfCOIl/U~l:. <br /> <br />Dear Linda: <br /> <br />Berndt C. Holme:!' <br /> <br />This letter will confirm our recent telephone conversations concerning the <br />following proposed contracts (the "Contracts"): <br /> <br />All Anom~ <br />Admined in Colorado <br /> <br />I. <br /> <br />Contract Amendment No.3 between the Colorado Water Conservation Board <br />("CWCB") and the Ute Water Conservancy District and the Ute Water <br />Activity Enterprise (collectively "Ute Water"), in the amount of$2,600,OOO, <br />Contract Encumbrance No. C153670B. <br /> <br />_'AI'O Adm;,,,d in U~h <br /> <br />2, Loan Contract between Ute Water and CWCB for $7 million, Contract <br />Encumbrance No. C150026. <br /> <br />The above referenced Contracts require that Ute Water grant deeds of trust <br />on certain collateral described in those documents. The Contracts also require certain <br />opinions from "Red Book Bond Counsel". As you are aware, Ute Water's bond <br />counsel is Tom Peltz at Kutak Rock in Denver. <br /> <br />In a recent telephone conversation, you, Mr. Peltz and I discussed the <br />requirements in the Contracts that Ute Water execute and deliver a deed of trust on <br />certain property to CWCB. In our conversation, Mr. Peltz raised the concern that <br />such a provision is contrary to Colorado law, including without limitation, the <br />holding of McNichols v, Denver, 123 Colo. 132, 230 P.2d 591 (1950), and the <br />provisions of Article XI of the Colorado Constitution. <br /> <br />GRAND JUr-<CTION OFFICE <br />200 N.6th Street <br />P.O. Box 338 <br />Grand Junction. Colorado <br />81502-0338 <br />Phone 970f242-6262 <br />Fu 970124\.3026 <br />wthco@aol.com <br /> <br />The loans anticipated by the Contracts referred to above will be secured by <br />a pledge of revenues from Ute Water. We believe that such a pledge ofrevenues <br />from a public entity should be sufficient security for the loans from CWCB. <br />Accordingly, to avoid the concerns raised by Mr, Peltz, Ute Water requests that the <br /> <br />_ <br /> <br />MOAB OFFICE <br />94 East Grand AV1:nue <br />Moab, Utah 84532-2830 <br />Phone: 435(259.4381 <br />