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<br />. <br /> <br />I <br /> <br />CARLSON, HAMMOND & PADDOCK <br />ATTORN E:Y5 AT LAW <br /> <br />PAU LA C. PH ILLIPS <br />MONTGOMERY WRAY WITTEN <br />TOO J. SMITH <br /> <br />August 4, 1987 <br /> <br />~ ~';";"; '~~7pr <br /> <br />AUG s :1.987 <br />COLORA <br />CONSERVA~O WATER <br />ION BOARD <br /> <br />JOHN UNOEM CARLSON <br />MARY MEAD HAMMOND <br />WILLIAM A. PADDOCK <br /> <br />1700 LINCOLN SiREET, SUITE 2750 <br />DENVER, COL-DRADO 80203 <br /> <br />Colorado Water Conservation Board <br />Attention: Frank Akers <br />l3l3 Sherman Street <br />Denver, Colorado 80203 <br /> <br />Re: Santa Maria Reservoir Company <br /> <br />Dear Mr. Akers: <br /> <br />This letter is to provide the opinion required by the <br />Colorado Water Conservation Board in connection with the <br />proposed contract between the Colorado Water Conservation Board <br />(the "Board") and the Santa Maria Reservoir Company (the <br />"Company"). The contract provides for a loan of funds from the <br />Board to the Company, a Colorado mutual reservoir company, <br />organized pursuant to C.R.S. ~7-42-l0l, for the purpose of <br />determining the cause of, and remedial measures for, seepage at <br />the Santa Maria and Continental Reservoirs. Those reservoirs <br />are owned and operated by the company for the purpose of storing <br />and delivering water of the Company to its shareholders. <br /> <br />The contract provides for the Company to obtain a feasi- <br />bility report documenting the causes and remedial measures for <br />excessive seepage at the Santa Maria and Continental Dams at a <br />total cost not to exceed $67,200.00. The costs of the report <br />will be advanced by the Board. Of this amount, the sum of <br />$33,600.00 shall be repaid by the Company over ten years at 5% <br />per annum, irrespective of the findings of the feasibility <br />report funded by the contract. The contract further provides <br />for the Company to repay the Board the sum of $43,512.00 (which <br />includes principal and interest), if construction of the project <br />is initiated within ten years of the date of the contract, in <br />ten equal annual installments. <br /> <br />We have reviewed (a) Colorado statutes governing mutual <br />reservoir companies, including C.R.S. ~7-42-101 et~; (b) the <br />Articles of Incorporation and the Bylaws of the Santa Maria <br />Reservoir Company; (c) Minute$ of the annual meeting of the <br />Santa Maria Reservoir Company held on December 3, 1985; (d) the <br />Minutes of the meeting of the Board of Directors of the Santa <br />Maria Reservoir Company held on December 15, 1986; (e) the <br />Minutes of the meeting of the Board of Directors of the Santa <br />Maria Reservoir Company held on July 30, 1987; (f) the proposed <br />contract between the Colorado Water Conservation Board and the <br />Santa Maria Reservoir Company; (g) the proposed contract for <br />