BOARD01811

• Board Meeting Date: 5/11/1998
• Description: Rio Grande Basin Issues - Closed Basin Project Issues
• Board Meetings - Doc Type: Memo

Peter Evans, Acting Director
Colorado Water Conservation Board
November 16, 1998
Page 4

loan to the Horse Creek group was all they could afford even at the
favorable interest rate obtained. Second, under any method of
analysis, a total of $900,000 compensation to Box Springs was the
lowest value that could legitimately be assigned to the replacement
value of the water rights detrimented by well development.

Purpose of Grant/Loan Reduction. The Settlement Agreement
contemplates a grant of $350,000, of which $200,000 would be
payable to the shareholders of Box Springs to enable them to
replace the water supply depleted by wells, and $150,000 to HCWUA
to offset the costs of HCWUA's existing CWCB loan. Therefore, the
HCWUA portion of the grant could be in the form of a loan reduction
rather than a one time payment, and the effect on the State budget
of that portion would be spread out over a number of years. The
Box Springs' shareholders' portion could take the form of a one
time payment to meet their need to acquire replacement sources of
water. Conceivably, the Box springs portion could take the form
of a commitment by CWCB to make a series of monthly payments
sufficient to cover for example a 5 year purchase contract. By way
of example, at an interest rate of 9 per cent, this would call for
monthly payments of about $7265.00.

Conclusion:
and is necessary
'Basin issues.

This grant will complete the settlement process
to achieve a just resolution of the Horse Creek

Representatives from both the Horse Creek group and Box
Springs will be present at the Board's November meeting to answer
any questions that the Board may have.

Very truly yours,

KRASSA, MADSEN & MILLER, LLC

By

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RFK:sak

Enclosure

cc: Kay Markus, Secretary, Box Springs
Carl Stogsdill, Horse Creek
Jack Pfost, Horse Creek

Krass., Madsen 4< MiUer, UC