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(5) Similarities or Differences with the Clinton Ditch and Reservoir Company <br /> It is proposed by the applicants that the contract with the Board would be structured in a manner <br /> very similar to the Board's present contract with the Clinton Ditch& Reservoir Company. The <br /> Board made a Construction Fund loan of about $4.7 million in August 1992 to allow the Clinton <br /> Ditch& Reservoir Company to acquire Clinton Gulch Reservoir. <br /> The shareholders of the Clinton Ditch & Reservoir Company are both municipalities and ski <br /> corporations in Summit County. The loan contract and two promissory notes (a "Municipal Note" and <br /> a "Ski Area Note")were executed by the Company. The loan was secured by shares of stock owned <br /> by the shareholders of the Company, each of whom executed separate security agreements, deeds of <br /> trust and stock assignments. <br /> Two shareholders of the Company, Summit County and the Town of Silverthome, did not pledge their <br /> shares of stock as security for the loan. Presumably, these shareholders provided their own funds for <br /> their portions of the Clinton Reservoir Project because they did not participate in the loan from the <br /> CWCB. The shareholders that did pledge their shares of stock are the Town of Breckenridge, the <br /> Town of Dillon and four ski corporations. <br /> We were unable to locate any documentation for the Clinton loan that would allow us to make a direct <br /> financial comparison of the two projects. However, information submitted previously by the <br /> applicants included a total project cost of$8.9 million which would tend to indicate that Construction <br /> Fund financing amounted to about 53 percent of project costs. <br /> DISCUSSION <br /> The applicants maintain that their funding request of$8.5 million is for less than 75 percent of the <br /> total project cost taking into account Vail Associates' $3.0 million acquisition of the initial 500 <br /> acre-feet of firm yield. As discussed at the November 1996 Board meeting, Vail Associates is <br /> unwilling to pledge this portion of their ownership. If we accept the collateral analysis outlined <br /> here, however, that may not be significant for the Board's collateral position on the loan. <br /> The question is whether the Board is being asked to fund 75 percent of the total project costs or <br /> 100 percent of the applicants $8.5 million request. After considerable deliberation, we believe the <br /> latter is true. The applicants bring to the project assorted water rights that ensure the 1,500 acre- <br /> feet of firm yield but are not using any significant amount of their own funds to pay the cost of <br /> acquiring the reservoir. <br /> We therefore will recommend a Construction Fund loan for the Eagle Park Reservoir Project <br /> which allows the applicants some credit for the value of contributed water rights and for studies <br /> and investigations which have been undertaken but at the same time requires some direct financial <br /> participation by the applicants in the purchase of the Eagle Park Reservoir and that the <br /> v' 4 <br />