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<br />, . <br /> <br />. <br /> <br />. <br /> <br />David W. Walker <br />July 22, 1991 <br />Page Four <br /> <br />Interpreting the Contract Amendmentss as set forth above is <br />not in any way inconsistent with the statutes applicable to CWCB. <br />The relevant statutory provision relating to the security that CWCB <br />must take on a project is set forth in ~37-60-l20, C.R.S. Pursuant <br />to that provision, ownership of a subject project is only one of <br />several alternate types of security that CWCB can take to secure a <br />loan. As an alternative to ownership and control of the project, <br />CWCB can take a security interest in property to assure repayment <br />of the_ loan. This is what CWCB did when Fruita passed its <br />ordinance pledging future sales tax revenues. Thus, the <br />substitution of the sales tax revenues for ownership and control of <br />the water system is consistent with the statutes governing CWCB. <br /> <br />Accordingly, upon review of the original Contracts between <br />CWCB and Fruita, the Amendments to those Contracts, and applicable <br />law, we are of the opinion that Fruita's future sales tax revenues <br />have been substituted for the Fruita water system as collateral for <br />the two loans from CWCB to Fruita. Therefore, as a result of this <br />substitution of collateral, CWCB has no further right, title, or <br />interest in Fruita's water system, and Fruita can convey this water <br />system to Ute Water free and clear of any claims of CWCB. <br /> <br />We would appreciate it if you would review this matter, and <br />let us know whether you concur with our conclusions. Specifically, <br />we would like to obtain a letter from CWCB indicating whether it <br />agrees with our interpretation of the Contracts and Contract <br />Amendments, and further indicating whether CWCB claims any right, <br />title, or interest in and to any portion of Fruita's water system. <br />If CWCB does continue to claim an interest in Fruita I s water <br />system, please indicate to us the basis for that claim. <br /> <br />Thank you for your attention to this matter. We look forward <br />to receiving a response from you in the near future. <br /> <br />Very truly yours, <br /> <br />WILLIAMS, TURNER & HOLMES, P.C. <br /> <br />11/Q L c(lk'vryv~~1-t <br /> <br />Mark A. Hermundstad <br /> <br />MAH/sr <br /> <br />xc: Lawrence Aubert <br />Robert Engelke <br />