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<br />e <br /> <br />. <br /> <br />. <br /> <br />development needs are changing; there are fewer storage projects being proposed while <br />a significant increase in the need for repair or rehabilitation of existing projects is <br />evident. Water development is a more complex process than it was even eight years <br />ago,the last time fund guidelines were revised by the General Assembly. There are now <br />burdensome environmental requirements to meet; federal permits must be justified <br />according to purpose and need; and the ability to finance projects, especially those <br />providing agricultural water, is often very difficult. <br /> <br />As a consequence, the Board determined to review the utility of the construction fund <br />to meet the needs of the 1990's. Without deviating from the fundamental purpose of <br />fostering new beneficial consumptive use, the Board now recognizes that other <br />investments are desirable if we are to protect our existing water supplies and to provide <br />a sound basis for expanding our water supply facilities. <br /> <br />In recent years, in addition to providing loan financing for water project activity, the <br />fund has regularly been used for problem solving and other special activities such as river <br />basin studies, a reservoir site inventory, a water conservation program, and a variety of <br />studies relating to water supplies. Those activities were proposed by the General <br />Assembly or requested by the Board. <br /> <br />In viewing future opportunities the Board believes there is increasing pressure for <br />more efficient use of water supplies and for stronger more effective management of <br />water systems. And regrettably the backlog of projects needing repair is accelerating in <br />numbers as the state's water facility infrastructure ages. <br /> <br />After discussing future directions for the construction fund during its meetings over <br />the past year and having the advantage of comments and suggestions from a wide variety <br />of interests, the Board asks the General Assembly to amend statutory guidance for the <br />construction fund. <br /> <br />First, the Board no longer believes that it is desirable to make a allocation between <br />new storage facilities and project repairs as the current criteria require. In 37-60- <br />121(1)(b) the Board is to devote approximately two-thirds of the monies for new projects <br />and the remainder to repair and rehabilitation, The Board requests that allocation be <br />removed to increase the flexibility in the application of funds to identified needs. <br /> <br />Second, through its experience with a wide range of facility owners, the Board <br />believes that the General Assembly should consider revision of the loan conditions which <br />the Board can offer to potential project sponsors. Specifically, the Board requests that <br />the minimum interest charge of 5 percent be removed and that the Board have the <br />flexibility to establish a percentage for repayments which takes into account the ability of <br />the project sponsor to repay. <br /> <br />-9- <br />