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<br />. <br /> <br />ST~ OF COLORADO <br /> <br />o <br /> <br />Colorado Water Conservation Board <br />Department of Natural Resources <br /> <br />721 Stale r.-n'.-nnn1 Building <br />1313 SheI!It3I1 Street <br />Denver. eo_ 80203 <br />Phone (303) 866-3441 <br />FAX (303) 866-4474 . <br /> <br />Roy Romer <br />Govemor <br /> <br />MEMORANDUM <br /> <br />J=es 5.1"""""'" <br />ExecmiveDU.aor.DN<. <br />Darles C. LiIe. P.E. <br />Di=. CWCB . <br /> <br />TO: <br /> <br />Colorado Water Conservation Board Members <br /> <br />FROM: <br /> <br /> <br />and Construction Section <br /> <br />DATE: <br /> <br />SUBJECT: <br /> <br />Agenda Item 7.c.i, July 8-9, 1996 Board Meeting- <br />Water Project Construction loan Program - <br />lone Cabin Ditch and Reservoir Company <br /> <br />Backaround <br /> <br />lone Cabin Ditch and Reservoir Company (Lone Cabin) entered into Contract #C153517 with <br />CWCB on July 15, 1988 (amended June 28, 1989). The loan amount was $92,700 with <br />terms of 5% interest for 40 years for an annlJal payment of $5.402.56. <br /> <br />At the January 1994 meeting, Lone Cabin requested that the interest rate on the contract be <br />reduced from 5 % to 3 % due to financial difficulties aggravated by problems associated with <br />another property of which they are part owners. Due to a misunderstanding of the statutes, <br />the staff recommended that this request be approved, and the Board approved the Staff <br />recommendation. (See Board agenda items 7 .a.12 of January 19, 1994, and 23 of November <br />6-7,1995.) <br /> <br />It was discovered during the contract amendment process that the CWCB did not have the <br />statutory authority to reduce the interest ratE;. <br /> <br />Discussion <br /> <br />At the November 1995 meeting, the Board approved a recommendation to request approval <br />from the General Assembly to reduce the interest rate on an existing loan. <br /> <br />Section 11 of Senate Bill 96-153 amends the ~tatutes to allow the Board to adjust the interest <br />rate for any project" ...if, in the Board's opinion, the entity requesting such adjustment, <br />extension, and deferment demonstrates that it has encountered significant and unexpected <br />financial difficulties.... " <br /> <br />Recommendation <br /> <br />The Staff recommends that the Board approve reducing the interest rate on Contract <br />#C153517 between Lone Cabin and CWCB to 3 % per annum on the remaining balance of the <br />loan amount. <br /> <br />W:\BOAROMEM\JUL Y96\ 7 .c.i <br />