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Discussion As discussed in September the first year of the CFR can be considered a success. Twelve projects were funded and most if not all have a high degree of demonstrable watershed protection aspects, consistent with recommendations in the "Action Plan" prepared for the Board by S.S. Papadopulos. Several projects include large water suppliers as a cost-share contributor, and the Grand Junction project was sponsored by that City's water supply utility. Several projects that were not funded due to funding limits also had significant water supply protection aspects. There is a large unmet need for this type of work and good support for continuing the program within the water supply community. In addition, the US Forest service recently announced that it will be providing an additional $10 million to address forest health issues related to bark beetle infestations in cooperation with communities adjacent to the federal lands. With this new focus from the USFS there is a high likelihood of significant leveraging of any state funds made available. Staff is concerned with the large size of this request: $lmillion per year for 4 years or $4 million. The applicant has been advised that this far exceeds the typical non-reimbursable project funding, and that this Board cannot commit funds for future years. In addition, staff is concerned that the match ratio in the current CFR program authorized by HB07-1130 only requires a 40% contribution against the 60% provided by the CWCB funds. Staff Recommendation Staff recommends the Board request that the General Assembly authorize between $500,000 and $1,000,000 from the Construction Fund to be appropriated to the CWCB for one year of additional funding for the Colorado Community Forest Restoration (CFR) Grant Program in cooperation with the Colorado State Forest Service. The grant program should include a specific authorization to use a portion of the funds, not to exceed 10%, for a scientific research and monitoring component to better target projects and assess their effectiveness. In addition, any grant program so authorized should include a requirement of a minimum of 50% non-state cost- sharing, which may consist of a combination of in-kind and hard dollar matches. CWCB staff will be available to answer questions about this proposal. In the alternative the Board may want to consider a request to the legislature for a significant direct allocation of severance tax funds for amulti-year forest restoration program as discussed at Agenda Item 24a. CWCB staff will be available to answer questions about this proposal.