Report of State Auditor 1998 - Laserfiche WebLink

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U Report of The Colorado State Auditor 19 Developing accurate forecasting methods is integral to managing the Program in an P g effective manner now and in the future. Estimating an ideal amount of cash for the Fund and maintaining a level where receipts equal the demand for project funding will allow the General Assembly to accurately assess the funding necessary to meet the needs of the Program. Recommendation No. 2: The Water Conservation Board should improve its methods for estimating the receipts and disbursements associated with the Construction Fund Loan Program. The Board should also assess the effectiveness of its marketing efforts and determine if the demand for the Program is being met with the existing level of receipts. If the demand is being met,the Board should work with the General Assembly to make the statutory changes needed to reduce the cash balance of the Construction Fund. Water Conservation Board Response: Agree. The CWCB staff will incorporate consideration of the Severance Tax funds and current interest rates in the next revision to the Long-Term Financial Projection by January 1, 1999. Although the basic methods used in estimating revenues, fund balance, and needs are sound, there are many assumptions and predictions that must be made in applying these methods (e.g., interest rates and construction schedules). These factors are expected to illuminate a variety of policy issues,including the desired duration of the funding assistance and the committed and uncommitted cash balance needed to serve the existing and future purposes of the Fund. These issues deserve further consideration by the Board and the interested constituencies before further legislative direction is considered. Revision of the Long-Term Financial Projection has been delayed for over a year based upon interest expressed by the Board and many legislators in conducting regional water supply planning meetings around the State to test our forecasting of future project needs. It is important to note, however, that the demand for funding to develop Colorado's water resources is increasing. The future need for funds to develop Colorado's water resources is demonstrated by recent studies by the CWCB, the Colorado Farm Bureau, and the support for HB 98-1288 (the proposed Water Resources Act of 1988, which was postponed indefinitely, but is expected back next session). The proponents of HB 98-1288 estimated that as much as $100 million might be needed to motivate the necessary I I