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Talking Points Construction Fund and Perpetual Base Account Merger Impact of Capping Mineral Leasing Act Revenue Mineral Leasing Act (MLA) revenues are more than double current investment income and interest earning from loans ($12M) A cap on MLA revenue will constrain the future growth of the Construction Fund and its ability to fund DNR operations, interstate litigation and non-reimbursable investments (Construction Fund grants) Perpetual Base Account (PBA) Use The PBA account can only be used for loans. Severance Tax, investment income and interest earning "revolve" once in the Account. Since 1996, the PBA has grown to roughly equal the equity of the Construction Fund, which has been in existence since 1972 ($250M). Construction Fund (CF) The CF is a revolving fund. The CF is the only source revenue for operations and grants. The use of the CF use is prioritized, loans receiving the highest priority. The amount of money available for operations and grants is dependent on the CF meeting its target growth rate of 3.4 percent (based on the Engineering New Record "inflation" rate). The CF has come very close to empty on several occasions -most recently the Fund balance was as low as $800h. Benefits of Merger The CWCB currently manages the Funds separately and keep two sets of accounting legers, publishes two sets of accounting statements and conducts two annual audits. Merging the funds will simplify financial processes. Sending severance tax revenue directly to the CF will allow greater flexibility to use CWCB resources for grants and operations. For example, the Water Supply Partnership proposal can be implemented and projects authorized on a case-by-case basis. Colorado Water Conservation Board Flood Protection • Water Project Planning and Finance • Stream and Lake Protection Water Supply Protection • Conservation and Drought Planning • Intrastate Water Planning