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<br />The Board approved a $2,550,000 loan to the East Dillon Water District for the District's <br />purchase of water rights and other assets at the November 2001 meeting. The legislature <br />authorized the loan in HB02-1153. The memo presented to the Board identified the <br />collateral as a pledge of the District's revenues backed by a rate covenant and the water <br />rights and other assets to be acquired by the loan proceeds. Contract negotiations between <br />CWCB staff and the District's attorneys identified several complications associated with <br />the CWCB encumbering the District's real property with a deed of trust, including the <br />prospect of numerous amendments. The District requested that the CWCB reconsider the <br />collateral needed to secure their loan. The staff reviewed CWCB Policy No.5 and <br />concluded that a pledge of district revenues would be adequate collateral for the loan, and <br />the CWCB Director concurred with this conclusion. <br />