C153827 Contract

• Contract/PO #: C153827
• Contractor Name: Julesburg Irrigation District
• Contract Type: Loan
• Water District: 64
• County: Logan
• Bill Number: EIA
• Loan Projects - Doc Type: Contract Documents

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December 10, 1998
(Supercedes memos on same subject dated September II, 1998 and revised October 16, 1998)

MEMORANDUM

TO : Peter Evans and Bill Stanton
From: John Van Sciver
Subject: Approval of Collateral

Ref:

Julesburg Irrigation District
Loan to rehabilitate the Harmony # I Diversion

The purpose of this memo is to define and reconunend the collateral to be used for the above loan.

This project loan was approved by the CWCB September 22, 1997. A copy of the updated memo is attached. The
Board approved collateral for this loan as "..a collateral interest in the stream of income derived from District
iucome, and other property olvalue at least equal to the loan amount."

The District owns the Julesburg Reservoir and the land on which it is located. I have personally been to the reservoir
many times. It lies on the Logan-Sedgwick County line, about 2 miles north of the South Platte River. Lands
irrigated with reservoir water are to the east, in Sedgwick County.

The reservoir has a value of approximately $20 million; based on 20,000 acre-feet of storage and a cost of$I,OOO
per acre-foot to construct storage facilities. The reservoir has a surface area of approximately 1,500 acres, and the
District is offering the land that nnderlies the reservoir ~s collateral for this loan. I have estimated this land to have a
value of$ I ,000 per acre, which is the value assigned to irrigated farmland in Sedgwick County. (On October 16,
1998 I spoke with Bob Johnson, Sedgwick County Assessor; phone [phone]. Mr. Johnson said that irrigated
agricultural land under the District has been selling recently for $1,000 to $1,200 per acre. Using a land value of
$1,000, the reservoir site has a value of$1.5 million.)

On September II, 1998 I spoke to Larry Frame, Superit1tendent of the Julesburg Irrigation District. Larry confirmed
the value of the Julesburg Reservoir, and said the land that underlies it could be used as collateral for this loan. This
same collateral is used for our existing loan with the District in amount of $386, 000 to rehabilitate the outlet on the
reservoir. The above referenced loan is for an amount of $590,000, so we would have 2 loans in total amount of
$976,750 secured by a first interest in the Julesburg Reservoir site (value $1.5 million.)

Jan Illian needs to confirm the collateral for this loan to proceed with the contract. The contract has been drafted and
will be sent to the District for signing next week.

I reconunend you approve collateral as a security interest in the stream of income derived from District income, and
a deed of trust in the Julesburg Reservoir site.

~ove this recommendation.
I need mo n 0 tiOl~::::~~rove this recommendation.

Peter Evans, Acting Director
CWCB

Attach: Owners and Encumbrances Statement, 11/16/98

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