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I <br /> Report of The Colorado State Auditor 23 <br /> growth." We interpret this policy to apply to only those projects that address <br /> undeveloped waters and not those that propose repair or reconstruction of an existing <br /> structure,since these situations obviously involve a project. However,we could not <br /> always determine whether buying existing wells or water rights would increase the <br /> beneficial use of Colorado's undeveloped water resources. For example, if water <br /> rights or wells were being used equally before and after their purchase using Board <br /> funds,then these purchases do not satisfy either of the statutory spending priorities. <br /> Loans made for the purposes described above may be important to fulfill a need; <br /> however,they do not appear to meet statutory intent. The Board should either ensure <br /> that all of the projects that receive funding clearly meet existing statutory funding <br /> parameters or seek changes in the law to expand the lawful uses of the Fund. <br /> Recommendation No. 4: <br /> The Water Conservation Board should ensure that all projects receiving funding <br /> under the Construction Fund Loan Program clearly adhere to the funding priorities <br /> established by statute. If the Board desires to expand the statutory funding priorities, <br /> Iit should work with the General Assembly to effect these changes. <br /> Water Conservation Board Response: <br /> Agree. The Board will review the need for revisions to the loan authorizing <br /> statutes and present recommendations to the Governor and the General <br /> Assembly by February 1, 1999. <br /> The statutory priorities have been revised periodically (the last significant <br /> amendments were adopted in 1993 and 1994 legislative sessions). The <br /> annual review and approval of project recommendations by the Governor and <br /> the General Assembly has assured consistency with current state policy and <br /> statute. <br /> The statutes are silent regarding use of funds for refinancing, purchasing of <br /> existing projects, and purchase of water rights [37-60-121, C.R.S.]. The <br /> Board's Guidelines, however, provide that the costs of acquisition of land <br /> and water rights are not eligible for CWCB funding except as part of a <br /> project. The Board has subsequently adopted additional policy at the January <br /> 1996 meeting that any purchase must be necessary "to satisfy an existing <br /> need or shortage, and the purchase price must be supported by an <br /> appraisal." <br /> I <br /> I <br />