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" ' Agenda Item 16b. May 12, 1998 (Updated June 19, 1998) Page 2 The CRPOA has made an offer to Kiowa Resources to purchase 50 shares of Fulton Ditch water at a price of about $4500 per share. This price represents fair market value for these shares. Regardless of the water rights ultimately purchased, a written opinion of value will be provided by the Borrower as a condition of obtaining the CWCB loan. During a property owner meeting held February 14, 1998, the CRPOA voted to purchase water rights, and they have been actively pursuing that goal. The price of water shares is rising, and the CRPOA felt it necessary to acquire the shares as soon as possible. If they were to delay the purchase until June 1999, adequate water rights may not be available, and the price of the water could be prohibitive. Either event would constitute a hardship. For these reasons, the loan may be made from the Small Project Loan Account. The CRPOA is a residential subdivision in unincorporated Adams County surrounded by land annexed to Commerce City. Commerce City had a median household income less than 80% of the statewide average in 1990. The City of Brighton, located about 6 miles to the north, had a median household income of 90% of the statewide average in 1990. Homes in the Columbine Ranches Subdivision range from small ranch style houses to large modem homes. Although the surrounding communities indicate a low-income rate might apply, housing within the subdivision is more typical of that found in standard income communities. The CRPOA has requested a 10- year loan. For these reasons, staff is recommending a 4.5 % per annum loan, for a duration of 10 years. (This is equivalent to the "Standard Income" municipal rate for a 10-year loan, as approved by the CWCB in November 1997.) COLLATERAL The CRPOA will establish an annual assessment for each lot to repay the CWCB loan. The CWCB will take a security interest in this stream of revenue. The CRPOA will own the water rights acquired for augmentation of their well. These water rights will be collateral for the loan. STAFF RECOMMENDA nON The staff recommends: 1. That the Board finds that delay in the rehabilitation of their existing irrigation well, or delay in the purchase of water rights to augment that well, would cause undue hardship for the residents, qualifying the Columbine Ranches Property Owners Association for a loan from the Small Project Loan Account, and