Report of the State Auditor 1993

Home Browse Search

30 Water Conservation Board Construction Fund Performance Audit-February 1993 Colorado Water Conservation Board Response: Agree. The CWCB has established a time table which will include notification to all proponents of authorized projects that a status report will be required. The CWCB will evaluate those status reports and include a summary in its annual report. Feasibility Studies Are Conducted for All Projects The Board determines if the project is viable before a project sponsor is loaned money. These decisions are made through feasibility studies. The statutes require feasibility studies to evaluate: · Water rights and yield available for a proposed project. · Engineering and economic feasibility of a proposed project. · Projected economic, social, and environmental effects of a proposed project. If the results of the feasibility study indicate that the project would be viable, the project may be authorized for construction. Feasibility Study Costs for Projects That AreN ot Constructed Are Not Recovered by the Board The Board usually pays 50 percent of the total feasibility study cost and the project" sponsor pays the other 50 percent. The Board's cost of the feasibility study is added to the amount of the loan. The feasibility study costs, as well as project costs, are paid back over the period of the project loan. However, the Board does not seek recovery of its share of feasibility study costs when authorized projects are not constructed. According to Board staff, feasibility study costs are not recovered because: · Project sponsors might be discouraged from applying for Construction Fund loans if they knew they were going to be responsible for repaying all of the feasibility study costs for a project that did not go' ahead to construction.