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<br />r <br />e <br /> <br />Anthon~' W. Wiltiam.\ <br /> <br />J.D. Snodgrass <br /> <br />William D. Prakken <br /> <br />David J. Turner' <br /> <br />Mark A. Hc:rmundsrad" <br /> <br />Susan M.Corle <br /> <br />Jamc:s M. Colosky, p.c. <br /> <br />KJmen M. Kuram' <br /> <br />Thomas K. Snodgrass <br /> <br />OfCI1I01UI: <br /> <br />Berndt C. Holmes <br /> <br />AlIAn()ft\~ <br />Admitted in Color:ldo <br /> <br />. "Also Admirted in Utah <br /> <br />GRAND JUr-omON OFFICE <br />200 N. 6(h Street <br />P.O. Box 338 <br />Gr.1nd luno:tion. Colol'3.do <br />81502*03)8 <br />Phone 970/242.6262 <br />Fu. 970/241-3026 <br />wthco@wl.com <br /> <br />. <br /> <br />MOAB OFFICE <br />94 East Grand Avenuc: <br />Moab. Utah 84532-2830 <br />Phone 435f2S9.43Rl <br /> <br />wIlams, Turner & Holm~P.C. <br /> <br />ATTORNEYS AT LAW <br /> <br />i ~. <br /> <br />February 17,2000 <br /> <br />Linda Bassi <br />Office of the Attorney General <br />Natural Resources Section <br />1525 Sherman Street, 5th Floor <br />Denver, CO 80203 <br /> <br />- <br />-,,' <br /> <br />Re: <br /> <br />CWCB Loans to Ute Water Activity Enterprise (an enterprise of the <br />Ute Water Conservancy District. <br /> <br />Dear Linda: <br /> <br />This letter will confirm our recent telephone conversations concerning the <br />following proposed contracts (the "Contracts"): <br /> <br />1. <br /> <br />Contract Amendment No.3 between the Colorado Water Conservation Board <br />("CWCB") and the Ute Water Conservancy District and the Ute Water <br />Activity Enterprise (collectively "Ute Water"), in the amount of$2,600,000, <br />Contract Encumbrance No. C153670B. <br /> <br />2. Loan Contract between Ute Water and CWCB for $7 million, Contract <br />Encumbrance No. C150026. <br /> <br />The above referenced Contracts require that Ute Water grant deeds of trust <br />on certain collateral described in those documents. The Contracts also require certain <br />opinions from "Red Book Bond Counsel". As you are aware, Ute Water's bond <br />counsel is Tom Peltz at Kutak Rock in Denver. <br /> <br />In a recent telephone conversation, you, Mr. Peltz and I discussed the <br />requirements in the Contracts that Ute Water execute and deliver a deed of trust on <br />certain property to CWCB. In our conversation, Mr. Peltz raised the concern that <br />such a provision is contrary to Colorado law, including without limitation, the <br />holding of McNichols v. Denver, 123 Colo. 132, 230 P.2d 591 (1950), and the <br />provisions of Article XI of the Colorado Constitution. <br /> <br />The loans anticipated by the Contracts referred to above will be secured by <br />a pledge of revenues from Ute Water. We believe that such a pledge ofrevenues <br />from a public entity should be sufficient security for the loans from CWCB. <br />Accordingly, to avoid the concerns raised by Mr. Peltz, Ute Water requests that the <br />