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<br />. <br /> <br />STATE ~COLORI\DO <br /> <br />- <br /> <br />Colorado Water Conservation Board <br />Department of Natural Resources <br />721 Centennial Building <br />'313 Sherman Street <br />Denver, Colorado 80203 <br />Phone: (3031 866-3441 <br />FAX: (3031 866-4474 <br /> <br />Bill Owens <br />Governor <br /> <br />Greg E. Walcher <br />Executive Director, DNR <br /> <br />February 17,1999 <br /> <br />Peter H. Evans <br />Acti.ng Director, eWeB <br /> <br />Mr. Thomas Alvey, President <br />Leroux Creek Water Users Association <br />11653100 Road <br />Hotchkiss, Colorado 81419 <br /> <br />Re: Carl Smith Dam Project <br /> <br />Dear Mr. Alvey: <br /> <br />I am writing to confirm that, at the January 27, 1999 meeting of the Colorado Water <br />Conservation Board, the Board recommended a Construction Fund loan of$I,250,000, not to <br />exceed 90 percent of actual project costs, to the Leroux Creek Water Users Association for the <br />rehabilitation ofthe Carl Smith Dam. The term of the loan is for up to 30 years and the approved <br />lending rate is 3.75 percent. <br /> <br />The Board's action on the $1,250,000 loan request will be included in the 1999 CWCB <br />legislation (SB 99-173) and is subject to authorization by the General Assembly. If authorized by <br />the General Assembly, the proceeds for this loan should be available in mid-1999. <br /> <br />It is expected that total Construction Fund disbursements for the Carl Smith Dam Project will not <br />exceed $1,250,000 and that any moneys drawn on the $300,000 emergency loan for Carl Smith <br />Dam, as approved by the Board in July 1998, will be repaid by the use of funds from the <br />$1,250,000 loan. <br /> <br />As security for the loan, it is expected that the Company will pledge revenues from assessments <br />as well as the Carl Smith Dam and Reservoir and water rights. The Board also required that, <br />prior to the execution of a loan contract: <br /> <br />1. the Company's shareholders approve the loan, the pledge of revenues and the conveyance <br />of a security interest in the Carl Smith Dam site and water rights to the CWCB and, <br /> <br />2. the Association will obtain liability insurance for all of its reservoirs. <br /> <br />Please coordinate with Jan Illian of this office on all matters related to contracting. She will be <br />responsible for drafting and processing of contract documents. No funds may be disbursed until a <br />fully executed contract is in place. <br />