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authorization process and puts the burden of project continuation on the Borrower after 3 years <br /> of inactivity. <br /> Under what conditions should an exception be made if a borrower takes longer than the <br /> limit? <br /> Certainly there are several causes for project delays beyond the control of the Borrower; 1. <br /> Environmental/permitting process delays, 2. Access/Right-of-Way acquisition delays, 3. Legal <br /> delays, etc. The question for the Board to consider would be, has the Borrower shown a good <br /> faith effort (due diligence) toward project completion? If in the Board's judgement, the answer <br /> to this question is yes, then the project will continue. If however, the answer is no, then the Board <br /> has to evaluate if there are more current project requests than there are funds available. With both <br /> pieces of information in hand, the Board can then decide the future of the original authorization. <br /> Should the time limit(s) be set in statute or in the Guidelines? <br /> Since 1993, the CWCB staff has systematically reviewed previously authorized projects, and the <br /> Board has recommended de-authorization of project loans averaging $3.3 million per year. This is <br /> 65% more that the annual de-authorization recommendations made before 1993. <br /> The board does not have explicit authority to "de-authorize" funds approved by the general <br /> assembly. A number of project authorizations with both small and large funding residuals have <br /> accumulated over the past 20 years. CWCB and DNR Accounting staff have been working to <br /> identify these completed projects and have reduced that list as we are able to determine that the <br /> • remaining funds are not needed. However, it has not been clear whether these residual funds can be <br /> returned to the cash balance of the Construction Fund by staff, by Board action alone, or whether <br /> action by the General Assembly is required(see Dolores Project de-authorization in HB98-1189,for <br /> example). <br /> Including the time limits in the Guidelines and making them a part of the CWCB recommendation <br /> allows for review by the CWCB 3 years from authorization and annually after that. <br /> Recommendation <br /> We recommend that the Board establish the following policies regarding project time limitations: <br /> 1. A borrower must commence project construction (Award of Construction Contract) 3 years <br /> from the authorization date. <br /> 2. The Board will annually review in November on a case-by-case basis the list of "3-year <br /> projects" for possible de-authorization. De-authorization will not be automatic at the end of 3 <br /> years, but rather considered by the Board. <br /> 3. The 3-year time for construction commencement will be made part of the staff recommendation <br /> to the Board at the time of project authorization. <br /> 4. A project will remain on the "3-year list" until it has either commenced construction or been <br /> de-authorized by the Board. <br /> • We also recommend the Board provide additional feedback to the staff on the issue of establishing <br /> reasonable time limits through written comments and continued discussion at the January meeting. <br /> 3 <br />