CWCB Construction Fund and Severance Tax Trust Fund Annual Report 1998

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I I Preface Fiscal Year 1998 ca p s a very excitin g p eriod for the CWCB Construction Fund Loan Program. Over the past 5 years, the program has undertaken a significant transition. With a small staff of 6 Ifull time employees and a very expansive charge from the Board, we have increased the number of completed loans by 56% in the last five years, from 110 to 172 projects. The cumulative value of completed loans increased 90%, from $65 million in 1993 to $123 million in 1998. The average Inumber of loans completed annually increased 86%, from 7 projects per year between 1987-1993 to 12 projects per year between 1994-1998. The average value of loan projects completed annually Iincreased by 176% from $4.2 million to $11.7 million per year during the same time periods. Concerning management of the financial integrity of the Construction Fund, during the 5 year Iperiod from June 1, 1993 to June 1, 1998: • Construction Fund equity increased 49.1% from$137.3 million to $204.7 million. I • The average annual growth of the fund,not including a$22.3 million transfer from the General Fund in 1994, was 5.4%. • The value of loans receivable increased 104% from$52.2 million to $106.4 million. I • Annual loan repayments of principal and interest increased 50% from $4.4 million to $6.6 million per year. • The cash to total fund equity ratio,including the$22.3 million General Fund transfer, decreased I23% from 62%to 48%. I We also inaugurated the use of the Perpetual Base Account of the Severance Tax Trust Fund as a new source of funds for loans for construction of water supply facilities in areas impacted by development of Colorado's energy resources. IAll this success comes at a time of considerable uncertainty. A new governor will take office in January 1999. Term limits and the results of the November general election will change the I composition of the Legislature and its subcommittees. The Executive Director of the Department of Natural Resources and the Director of the Board announced their retirements, and new directors are expected to be appointed in 1999. IThe significant increase in the number of communities, businesses and individuals we have assisted in recent years has tested our ability at the present level of staffing to assure accurate and Itimely monitoring of various accounting and record keeping activities. However, a comprehensive performance audit by the Legislative Audit Committee is in progress, and we are looking forward to their positive recommendations. I c?„0/4.,/EtA-,- - p Al • Peter H. Evans William P. Stanton,P.E. IActing CWCB Director Chief, Project Planning and Construction Section ICWCB FY98 Annual Report,page iii