BOARD02472

• Board Meeting Date: 3/10/1998
• Description: CF Section - Amended Authorizations - Eagle Park Reservoir Co. - Amendment to Existing Authorization
• Board Meetings - Doc Type: Memo

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Colorado Water Conservation Board
Department of Natural Resources
721 Centennial Building
131 3 Sherman Street
Denver, Colorado 80203
Phone, 13031 866.3441
FA)(, [phone]

STATE OF COLORADO

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Roy Romer
Governor

MEMORANDUM

j<lmes S. lochhe<ld
Executive Director, DNR
DariesC lile, PE.
Director, (WeB

TO:
FROM:

Colorado Water Co~vation Board Members

Bill Green, p.E.13
Project Planning and Construction

DATE:
SUBJECT:

March 3, 1998

Added Agenda Item 23a., March 10-11, 1998 Board Meeting - Water
Project Construction Loan Program - Amended Authorizations _
Eagle Park Reservoir Co. - Amendment to Existing Authorization

Introduction
The Board will be asked to approve an amendment to HB 98-1189, this year's legislation,
to revise a portion of the authorization for the Eagle Park Reservoir loan in last year's
legislation.

Backl!round
A total of $8.0 million in financing was authorized in SB 96-153 and in SB 97-008
to the Eagle Park Reservoir Company for the acquisition of Eagle Park Reservoir from
Climax Molybdenum Company. The Eagle Park Reservoir Company is currently
negotiating a purchase agreement with Climax Molybdenum and hopes to conclude those
negotiations in the next three or four months.

Discussion
SB 97-008 authorized up to $4.0 million of the Eagle Park financing from the Perpetual
Base Account of the Severance Tax Trust Fund. (The rest of the financing will come from
the Construction Fund.) The problem is that the wording in SB 97-008 also ties the
Severance Tax financing to the fiscal year which ends on Ju~e3Q, 1998.

While the Eagle Park Reservoir Company is hopeful that it will have concluded an
agreement with Climax Molybdenum by that time, there are a number of conditions in the
purchase agreement which could result in a closing date after June 30th. In short, we may ,_, j
not be able to meet a June 30, 1998 deadline for disbursing the money and may risk ....
losing the $4.0 million in funding unless the wording in SB 97-008 is changed. 'j

A copy of a letter from Mike Browning of Porzak Browning & Johnson, the attorneys fQr-..:~ ~ f
the Eagle Park Reservoir Company, requesting the amendment is attached. y.. <>i J / I /f
-0 J't-<: \,
Recommendation t / .
Staff recommends that Section 16. of SB 97-008 be amended to read as follows; (J Je:(

Section 16. Appropriation. In addition to any other appropriation, there is t:;>
hereby appropriated, out of any moneys in the severance tax trust fund perpetual
base account pursuant to section 30-29-109 (1) (a) (I), Colorado Revised Statutes, to
the department of natural resources, for allocation to the water conservation board,