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<br />David Walker, CWCB <br />March 3, 1888 <br />Page Two <br /> <br />the terms of this merger, Fruita is required to convey title to <br />our water system to the Ute district and the Ute is required to <br />serve our customers and pay Fruita under the same terms and <br />conditions as we pay back our loans with the Water Board. Since <br />our loans with the Water Board are secured by title to our water <br />system, the Ute is concerned that our deferrals might interfere <br />with their acquiring title to the water system. For this reason <br />they have not kept up on their payments to us and therein lies <br />the problem. <br /> <br />There is a solution to this problem. It lies in the <br />provisions of our contracts with the Water Board which permit, <br />with board approval, the substitution of collateral on our <br />loans. In this case we would propose, as we have in other <br />correspondence, exchanging our future sales tax collections as <br />collateral rather than title to the water pipe buried under our <br />streets. <br /> <br />It is my impression that this plan has Water Board staffs' <br />endorsement, a favorable response from the Attorney General's <br />office and the support of the Ute Water District. In this way the <br />Water Board has better collateral on the loans, the Ute has the <br />water system and we have our deferrals. <br /> <br />This is what we need! This is what our proposal is all <br />about. If the Board would approve the exchange of collateral we <br />would be available to complete the process at your earliest <br />convenience. Again, thank you very much for all your help. <br /> <br />Sincerely, <br /> <br />:f~fC~ <br /> <br />City Manager <br /> <br />cc: Ute Water Conservancy District <br />