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AGENCY NAME: Water Conservation Board AGENCY NUMBER: POA {)IO 3..3 ROUTING NUMBER: 97 POA $300,000 LOAN CONTRACT & PROMISSORY NOTE THIS CONTRACT, made this ~ ~ dayo' 1997, by and between the State of Colorado for the use and benefit of the De rtment of Nat al Resources, Colorado Water Conservation Board (CWCB), hereinafter referred to as the STATE, and the CONSOLIDATED EXTENSION CANAL COMPANY, hereinafter referred to as the BORROWER and/or CONTRACTOR. FACTUAL RECITALS A. Authority exists in the law, and funds have been budgeted, appropriated and otherwise made available and a sufficient unencumbered balance thereof remains available for payment in Fund Number 424, Organization YYYY, Appropriation EIA, GBL C747, Program WTRC, Object Code 5110, Reporting Category 3747, Contract Encumbrance Number C153747. B. Required approval, clearance, and coordination have been accomplished from and with appropriate agencies. C. Pursuant to the provisions of SS 37-60-119 and 37-60-120, 15 CRS. (1990 and Supp. 1996), the STATE is authorized to loan money for the constnuction of water projects for the benefit of the people of the STATE, provided that the borrower assures repayment of that money. D. In accordance with S 37-60-122.6, C.R.S. (Supp. 1996), the STATE is authorized to loan money from the Emergency Infrastructure Account for projects which it determines are necessary to avoid unreasonable risk of injury or damage to human health or well-being or to properly or crops when the CWCB also determines that the emergency condition is not the result of negligence in the operation or maintenance of the infrastructure and that the viability or success of the emergency project is not dependent upon further appropriations or loans. E. The BORROWER is a duly constituted Colorado ditch and reservoir company govemed by SS 7-42-101, et sea., C.R.S. (1990 and Supp. 1996), located in Bent County, State of Colorado. F. Part of the BORROWER'S water delivery system consists of a 1,000 foot siphon constructed of wood stave pipe and located on the Purgatoire River. In August 1996 a major portion of the siphon failed, resulting in approximately 70% of the BORROWER'S irrigation water escaping to the river. By October 1996 the hole in the siphon had enlarged to the point where no water can be delivered through the siphon. The BORROWER must complete needed repairs to the siphon by March 15, 1997, to allow full irrigation diversions in 1997. G. The BORROWER applied to the STATE for an emergency loan to be used to finance the costs of replacing at least 600 feet of the siphon's wood stave pipe with concrete pipe, hereinafter referred to as the PROJECT. H. A feasibility study conducted by the U.S. Natural Resources Conservation Service ("NRCS") and by the Public Service Company of Colorado (owner of 53% of the Company's stock), which is incorporated herein by reference, was reviewed by the STATE and, based upon this feasibility study, the STATE determined the PROJECT to be technically and financially feasible. The Consolidated Extension Canal Company Page 1 of 11 Loan Contract