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Appendix I Overview of Relevant Funding Programs ~~7r~~ Statewide Water Supply Initiafive Sources of Funding The costs to implement water supply and water resources projects continue to escalate. In light of the significant investments that must often be made to meet the needs of water users, numerous federal and state agencies have developed programs for partnering with project sponsors. Some agencies, such as the BOR, had their genesis in the immense need to support water management solutions in working with local project sponsors. Many of today's water resources programs include the ability to provide funding to support water supply and water resources projects, through grants, loans, or related mechanisms. This section provides a brief overview of some of the key existing programs that are relevant to water resources projects in Colorado. Colorado water resources projects are currently funded through a variety of sources, including outlays from cities, businesses, water districts, and local water users. State of Colorado Agencies and Programs For the State of Colorado, three agencies play key financing roles: the CWCB, the CWRPDA, and the CDPHE. Grants and loans are awarded by these agencies to help local groups finance water projects, with revenues obtained through taxes and bond sales. Highlights of these agencies' major existing funding programs relevant to water supply needs are provided in the following subsections. Colorado Water Conservation Board One of the important state agencies in _ti~i ~ ~i~-.~j~, *'~ Colorado for water project financing is " e~ ' _ ~~' the CWCB. CWCB was created in :~" 1937 to oversee water supply '~t . ... ;~~ ~ ; ,,,-; ; , ~ protection, flood protection, water supply planning and finance, stream and lake protection, water conservation and drought planning, and management of related water information (CWCB July 2003). CWCB consists of 15 members, eight of which are appointed by the Governor from the S:\REPORTWPPENDICESWPPENDIX I FILESWPPENDIX I OVERVIEW OF RELEVANT FUNDING PROGRAMS.DOC major river basins of the state and one that the Governor appoints from the City and County of Denver. All Board members require Senate confirmation and serve 3-year terms. CWCB administers three funds of particular importance to water project financing, described below. CWCB Construction Fund CWCB established this low-interest loan program in 1971 to assist in the development of water resource projects. The fund is a revolving fund that is funded by principal and interest payments on outstanding loans, interest earned on the cash balance of the fund through investments by the State Treasurer, mineral lease fund distributions, and occasional cash transfers from the Colorado General Assembly. The total equity of the fund is currently about $250 million, about $130 million of which consists of outstanding loans due back to the Board. About 250 locally-sponsored projects have been financed historically with CWCB Construction Fund assistance through the loan of around $250 million, as of January 2004 (Serlet 2004). The loans can be used for: ^ Reserr~+air~ - new raw water storage or enlargement of existing reservoirs ^ D~r~ R~h~~ilit~ti~~ - to meet safety standards and recover restricted capacity ^ UVat~r Supply Syst~m~ - rehabilitate or construct agricultural or municipal raw water (diversion structures, ditches, headgates, pipelines, wells, etc.) CWCB may contribute up to 90 percent of the costs of engineering and construction for a project~ and up to 50 percent of the cost of a feasibility study, which is required of all projects. Loans for studies usually must be repaid regardless of whether or not the project is constructed, and grants of up to $5,000 may also be available for studies (CWCB 1999). Loan rates for 30-year repayment periods were around 2.5 percent for agricultural project loans and between 3.5 and ~ For project sponsors with a greater ability-to-pay, engineering, and construction loans may be capped at 75 percent of total costs (CWCB Policy Number 11). ~~ aQ~E,~~~~v~t~ ~ °~~ :~ o