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I <br /> 20 Construction Fund Loan Program Performance Audit-September 1998 <br /> planning at the local or regional level. Local water providers and local I <br /> governments will need a significant amount of additional funds to develop <br /> the water supply improvements and mitigate the impacts that are likely to be <br /> recommended in local plans. <br /> Other Financing Is Available for Many <br /> Projects <br /> The Board is approving and seeking legislative authorization for projects that do not <br /> need state financing. Statutes require that project sponsors thoroughly explore all <br /> other means of financing before Fund monies can be used for a project. We found: <br /> • From Fiscal Year 1994 to 1998 the Board approved 14 projects totaling about <br /> $2.6 million that were actually built using other funding sources. <br /> • In Fiscal Years 1988, 1989, 1996, and 1997 the Board approved nine loans <br /> totaling about$9 million to refinance loans from the United States Bureau of <br /> Reclamation. <br /> In these cases there was obviously funding available from sources other than the <br /> Construction Fund. <br /> The Board requests that project sponsors identify other financing sources in their <br /> project applications and feasibility studies. We examined applications and feasibility <br /> studies for nine projects that were deauthorized because they were built using other <br /> funding. We found that five of the nine project applications (56 percent) identified <br /> other possible funding sources. Two additional applications indicated that other <br /> possible sources of funding had not been pursued by the project sponsors. <br /> Nonetheless, in these cases the Board approved the loans knowing that alternative I <br /> financing was either available or had not been pursued. <br /> Requiring a potential borrower to examine its financing options before requesting a <br /> loan from the Board is not only required by statute,but is necessary to maximize the <br /> funding that is available to enhance Colorado's water resources. By limiting state <br /> funding to those projects that have fewer financing options, the Board can increase <br /> the total number of projects built in Colorado and increase the overall benefit of the <br /> Program. <br /> I <br /> 1 <br />