ALP 6

3
Colorado Water Resources
and
Power Development Authority
BOARD MEETING MINUTES
November 2, 2012
Call to Order
Chair Doug Monger called the meeting to order at 2:08 p.m. via conference call originated from the
Authority Office, Suite 620, 1580 Logan Street, Denver, Colorado.
Roll Call and Declaration of a Quorum
Board members present: Chair Doug Monger, Vice Chair Greg Higel, Secretary/Treasurer Greg Fisher,
Steve Harris, Frank Kugel, Steve LaBonde, Ann Nichols and Don Carlson. Ty Wattenberg was absent.
A quorum was declared with eight Board members present. Others present on the call were staff members
Mike Brod, Keith McLaughlin, Cassandra Eyestone, Duane Dohrer, Claudia Walters, Carolyn Simon and
Sabrina Speed. The Authority's General Counsel, Mary Hammond of Carlson, Hammond & Paddock
LLC, the Authority's Financial Advisor, Guy Nagahama of Jefferies & Company and the Authority's
Bond Counsel Jiro Marlin of Fulbright and Jaworski LLP were also on the call. Alan Matlosz of George
K. Baum & Company was present as a public observant.
SRF RefundinE Opportunities
Doug Monger questioned whether the Board would be making a decision at today's meeting, or if the
purpose of the call was discussion only. The staff expressed their hope that a decision would be made
today for final approval at the December Board meeting. Mike Brod highlighted the important aspects of
the October 4, 2012, Program Review Committee meeting, and restated the overall program questions
raised about the refunding. Jim Marlin prepared an opinion to address the questions raised at that
meeting. Mr. Marlin summarized the contents of his opinion letter, stating that in prior refunding issues,
the Authority had a senior junior lien structure under a new bond resolution and all existing repurchase
agreements were kept in place. In those refunding issues, the savings were passed along to the borrower
in the form of credits to future loan repayments. Mr. Marlin addressed Mary Hammond's prior question
of whether or not the loan agreements require the Authority to pass the savings to the borrower stating
that the current bond resolution reads that any reduction in debt service savings be passed along to the
borrower through decreased loan repayments. Other refunding options were discussed that would permit
the savings to be kept in the SRF programs, although a tax issue may be involved, requiring the Authority
to issue taxable bonds. Ann Nichols questioned what event triggers the tax issue and Mr. Marlin
confirmed the tax law limits the amount of savings, called acquired obligations, where bond proceeds are
used to acquire the loans, and limits the savings the Authority is able to retain to 150 basis points. After
the 150 basis points, the remainder of any net savings must be passed along to the borrowers. Discussion
continued over the different possible refunding scenarios and the ramifications to the SRF programs,
individual borrowers and Authority staff. Ann Nichols stated that the Board first needed to make a
fundamental decision as to whether or not the Authority would like to terminate the repurchase
agreements, and then further refunding options could be explored. The Board reviewed the Jefferies
presentation, with Mr. Nagahama describing in detail the differences in each refunding option. Following
the presentation, Steve LaBonde suggested that the critical component for him was collapsing the existing
repurchase agreements, and taking advantage of the current economic climate, but Ann Nichols and Doug
Monger disagreed. Further discussion ensued regarding the Authority's economic exposure, the existing
repurchase providers and the previous MB1A terminations. Keith McLaughlin relayed to the Board