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.,,.., <br />Discussion <br />The staff feels that the pro�am has provided a valuable resource that encourages reconnaissance and <br />feasibility planning by local water suppiy entities. The pro�am provides an incentive for water users <br />to evaluate their project ideas and to discover the financial opportunities available through the <br />Construction Fund loan program. <br />It is proposed by staff to expand the program to include other types of feasibility study investigations <br />in addirion to evaluation of dam sites so that the funds would be available for the full range of projects <br />supported by the Construction Fund. <br />The staff has been relying on the about �40,000 from the Operational Account of the Severance Tax <br />Trust Fund to conduct similar studies. However, these funds are to be used in energy impacted areas <br />and need to be scheduled almost 18 months in advance. <br />It is sugaested that $200,000 from the Construction Fund could be transferred into an account for the <br />purpose of making small grants to assist water users evaluate the technical and financial feasibility of <br />proposed projects in accordance with the CWCB Guidelines. Staff could adrninister the proposed <br />account with the following limitations and reporting requirements: <br />• Grant amount limited to a maximum of $5,000 per entity. <br />• The entity should contribute up to 50% of the total study cost. <br />• A Plan of Study prepared by the applicant and approved by staffwill be <br />required for each grant request. <br />• Only CWCB Director approval on purchase order required for a grant. <br />• The staff will periodically advise the Board on the status of all �ants. <br />Creation of a Feasibility Study Small Grant Account is consistent with the achievement of certain <br />objecrives under Goal 2 in the Boazd's Lon� Ran�e Plan and 1998 Performance Audit <br />Recommendation Number 6 to unprove methods for ensuring the feasibility of a project prior to loan <br />approvaL <br />Recommendation <br />I recommend the Board direct the staff to work with the 1999 Construction Fund bill sponsors <br />to include a section in the bill for the creation of a Feasibility Study Small Grant Account in the <br />Construction Fund, and to direct the State Treasurer to transfer $200,000 from unreserved cash in the <br />fund into the account. <br />L:\BOARDMEM\IYOV98\27b - FSSGA.doc <br />