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Report of The Colorado State Auditor 33 <br /> Board should contact the borrowers to inform them of the obligation and make every <br /> effort to collect the amount due plus interest, if possible. <br /> Water Conservation Board Response: <br /> Agree. This process is in progress and the CWCB staff will identify and <br /> initiate collection of any unpaid obligations by June 30, 1999. <br /> This requires not only that CWCB staff determine whether the project was <br /> constructed but also whether the funding agreement provides for the <br /> collection of interest. Some feasibility studies included more than one <br /> project,which will make it difficult to establish the amount of the repayment <br /> if some of the projects were not completed. <br /> 1 It may not be feasible to collect interest during the study period. In most <br /> cases prior to 1994,the Board's policies for implementing the Construction <br /> Fund Loan Program did not include charging interest during construction or <br /> during the feasibility study period. Since the State is interested in promoting <br /> a thorough analysis of water resource project options, funds spent on the <br /> evaluation of project feasibility are ac <br /> wise investment and the State might <br /> choose to forgive some or all feasibility study loans or the interest during the <br /> study period. <br /> Loan Interest Rates Are Established on the Basis of <br /> Several Factors <br /> The Board's lending policy states that loan interest rates will be set according to <br /> several factors including the current annual yield on long-term municipal bonds,the <br /> type of entity seeking the funds (e.g., agricultural, municipal, or commercial <br /> enterprise), statutory limitations, the project sponsor's ability to pay, and the <br /> significance of the project in terms of statewide water needs. Interest rates by type <br /> of loan for the period 1973 to present are shown in the following table: <br /> I <br /> I <br /> I <br /> I <br />