Memorandum Agenda Item 12a 11/20/1998

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C • • Water resource investigations (e.g., MWSI, saved/salvaged water study, Ft. Lyon canal study and decision support system); • Fish and Wildlife mitigation project; • River rehabilitation projects; and • Water resource data collection(e.g., satellite monitoring system, irrigated acreage verification, development of monitoring wells, and estimates of not- nontributary and nontributary water replacement and relinquishment values. However, in consulting with some of the water community lobbyists that are more familiar with recent legislative developments, my sense is that we may be able to do a better job protecting the fund by leaving the statutory purposes alone for now. Although they haven't been revised for approximately five years, we have not had any difficulty persuading the General Assembly in recent years that every one of the Board's funding recommendations have been a wise investment within the intended uses. I believe this is especially true, given the broad statement of purpose in Section 199(1)("...to enable the construction, rehabilitation, enlargement, or improvement of such flood control, water supply, and hydroelectric facilities, including domestic water treatment and distribution systems,together with related recreational facilities, in whole or in part, as will, in the opinion of the Board, abate floods or conserve, effect more efficient use of, develop, or protect the water and hydroelectric energy resources and supplies of the state of Colorado") and the extensive legislative review in both the agriculture/natural resources and appropriation committees on both the House and Senate sides. My lobbyist-friends advise that Governor-elect Owens is proposing a very expensive set of transportation improvements and, at the same time, opposed to using "TABOR-excess"revenues with permission of the voters to pay for these projects. They also suggest that the State Auditor's estimation that the Construction Fund may be carrying a cash balance of approximately $50 million more than is needed is likely to draw undesirable attention to this asset that the water community and the Board have built and protected for many years. Recommendation: Based upon the efforts we made to persuade the State Auditor's Office that the "statutory compliance problems"they identified were not significant, there are plenty of legitimate uses and needs for these funds, I recommend that we recommend to the General Assembly that the statutory purposes of the CWCB Construction Fund should be not be revised and that we include a discussion of our reasons when we brief the House and Senate Ag. Committees this January. Attachments xc: Dick MacRavey Fred Anderson Julie McKenna Sara Duncan Steve Arveschoug • CWCB Construction Fund Loan Program Staff PHE L:/boardmem/nov98/12a.doc