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<br />ST A TE OF COLORADO <br /> <br />Colorado Water Conservation Board <br /> <br />Department of Natural Resources <br />1313 Sherman Street, Room 721 <br />Denver, Colorado 80203 <br />Phone: (303) 866-3441 <br />FPlX: (303)866-4474 <br /> <br /> <br />Memorandum <br /> <br />Bill Ritter, Jr. <br />Governor <br /> <br />TO: <br /> <br />Colorado Water Conservation Board Members <br /> <br />Harris D. Sherman <br />Executive Director <br /> <br />FROM: <br /> <br />Vaughn Mc Williams, C~~tr~9 ~anager V M <br />Mike Serlet, P.E., Chief /f/J <br />Water Supply Planning a a Finance Section <br /> <br />Rod Kuharich <br />CWCB Director <br /> <br />Dan McAuliffe <br />Deputy Director <br /> <br />DATE: May 11, 2007 <br /> <br />SUBJECT: Consent Agenda Item 1 b, May 22-23, 2007, Board Meeting <br />Water Supply Planning and Finance - Changes to Existing Loans- <br />Lazy 0 Ranch Homeowners' Association - Collateral Change <br /> <br />Introduction <br /> <br />At the November 2006 meeting, the Board approved a loan to the Lazy 0 Ranch <br />Homeowners' Association (LORHOA) in the amount of $152,258 for construction of a <br />secondary water system to provide outside irrigation water to 21 home sites within the <br />ranch. The recommended collateral for the loan was a pledge of LORHOA's annual <br />revenue assessments and the project itself. <br /> <br />Discussion <br /> <br />The LORHOA covered the engineering and construction costs of the project with a <br />bridge loan obtained from Community Banks of Colorado, which is a line of credit <br />secured by a pledge of the annual revenue assessments. It was the intent of the <br />LORHOA to pay off this bridge loan with the CWCB loan, but during the contracting <br />process it was determined that the LORHOA desires to keep the line of credit with <br />Community Banks open for future operating expenses. Community Banks is not willing <br />to provide parity to the CWCB in the annual revenue assessments as collateral for the <br />CWCB loan, which is necessary to comply with Board Policy # 5 (Collateral). <br />Therefore, the LORROA has agreed to provide a portion of its senior water rights as <br />alternative collateral for the CWCB loan. <br /> <br />1 <br />