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<br />STATE OF COLORADO <br /> <br />Colorado Water Conservation Board <br /> <br />Water Supply Planning & Finance Section <br />1580 Logan Street, Suite 750 <br />Denver, Colorado 80203 <br />www.cwcb.state.co.u5 <br /> <br /> <br />Bill Owens <br />Governor <br /> <br />MEMORANDUM <br /> <br />Russell George <br />Executive Director <br /> <br />TO: <br /> <br />Colorado Water Conservation Board Members <br /> <br />Mike Serlet, P.E., Chief '-11/ I <br />Water Supply Planning and F~ Section <br /> <br />Rod Kuharich <br />CWCB Director <br /> <br />FROM: <br /> <br />Dan McAuliffe <br />Deputy Director <br /> <br />DATE: July 12, 2004 <br /> <br />SUBJECT: Agenda Item 15 - July 20-21, 2004, Board Meeting <br />Water Supply Planning and Finance - Policy Review <br />Policy #5 - Collateral for Construction Fund and Perpetual Base Account <br />Project Loans <br /> <br />Introduction <br /> <br />Financial Policy #5 provides a process for determining the appropriate collateral to assure <br />repayment of loans from the Construction Fund and Severance Tax Trust Fund Perpetual Base <br />Account. There has been concern by some Board members that the existing policy does not <br />address collateral issues surrounding borrowers that are either corporations without assessment <br />revenues, or newly incorporated entities with limited history of revenue and expenditures (new <br />entities). This item will attempt to address this issue as it pertains to collateral. <br /> <br />Background <br /> <br />At the March 17, 2004 Board meeting, several Board members voiced concern about <br />loans made to corporations without assessment revenues and new entities. The Board's <br />discussion ofthese loans centered on the collateral necessary to assure repayment of a loan. Staff <br />stated that several of these types of borrowers have made inquiries as to the availability of loan <br />funds and are interested in applying for loans in the near future. Most of these prospective <br />borrowers are in the South Platte River basin and are requesting funds for augmentation and <br />recharge proj ects as a result of Senate Bill 03-73 and the downsizing of the Groundwater <br />Appropriators of the South Platte (GASP). The Board directed staff to attempt to clarify these <br />issues by bringing forward suggested policy revisions for Board discussion at the May 2004 <br />Board meeting. <br /> <br />Mike Serlel, PE, Section Chief - Phone 303-866-3426 - Fax 303-894-2578 <br />