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prepared by CWCB staff and DISTRICT staff. all of which are incorporated herein by reference, and, based upon the feasibility report as updated and upon the EIS. the STATE-determined the PROJECT to be technically and financially feasible. 8. At its November 1998 meeting, the CWCB approved an additional loan to the BORROWER in the amount of up to $9,600.000 from the CWCB Construction Fund and/or the Severance Tax Trust Fund Perpetual Base Account, at an interest rate of 4.75% per annum for a term of thirty (30) years, to finance PROJECT costs. The CWCB conditioned the loan upon the BORROWER raising its water rates prior to entering into the loan contract. On April 14, 1999, the BORROWER approved a motion raising its water rates effective July 1, 1999. 9. Pursuant to 1999 Colo. Sess. Laws, Ch. 218, Section 2. the Colorado General Assembiy authorized the CWCB to loan to the DISTRICT, acting by and through the BORROWER, $7,000,000 from the Severance Tax Trust Fund Perpetual Base Account, hereinafter referred to as AUTHORIZED LOAN AMOUNT, at an interest rate of 4.75% per annum for a term of thirty (30) years for financing PROJECT costs. The General Assembly also authorized the CWCB to loan to the DISTRICT, acting by and through the BORROWER, an additional $2.600,000 from the Construction Fund for the PROJECT, which loan will be made by an amendment to the 1995 Contract. 10. The STATE acknowledges and understands that the repayment of the funds loaned, including interest thereon, will come from revenues pledged for the repayment thereof from water system revenues and that this obligation does not constitute a debt of the DISTRICT within the meaning of any constitutional or statutory limitations. 11. The STATE, the DISTRICT and the BORROWER acknowledge and understand that the BORROWER has pledged its water system revenues to repay its Water Revenue Refunding Bonds, Series 1995 and Series 1997, and to repay existing loans from the STATE. 12. The STATE now desires. by this contract, to loan money to the BORROWER for this PROJECT upon mutually agreeable terms and conditions, subject to the availability offunding for that purpose. Now THEREFORE. in consideration of the mutual and dependent covenants contained herein, the parties agree as follows: A. The BORROWER agrees as follows: 1. Construction Fund Program Procedures. The fOllowing items are procedures the BORROWER shall follow during the construction phase of the PROJECT. . a. The BORROWER shall employ an engineer, registered in the State of Colorado, hereinafter referred to as the CONSULTANT. to prepare plans and specifications for the PROJECT. b. The agreement between the BORROWER and the CONSULTANT and the plans and specifications must be submitted to the CWCB staff for verification of compliance with the terms of this contract prior to bid opening. Any modifications to the plans and specifications must be approved in writing by the CWCB staff. c. For plans and specifications for all jurisdictional dams and reservoirs, as defined by S 37-87- 105, C.R.S. (1999), the BORROWER shall provide a letter of approval from the State Engineer's Office prior to construction. d. CWCB staff must be present at bid opening and must approve the award of the construction contract. e. The BORROWER shall contract for the construction of the work with responSible and capable firms, hereinafter referred to as CONSTRUCTION FIRMS, which CONSTRUCTION FIRMS shall bea Ute Water Activity Enterprise and Ute Water Conservancy District Page 2 of 13