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<br />Page 2 - Policy # 5 <br />Collateral <br /> <br />Entity Types are defined as: <br />Public (Governments): <br />Municipalities <br />Enterprises <br />Counties <br />Federal Govt. <br />Private (Incoroorated): <br />Mutual Ditch Co. <br />Homeowners Assoc. <br />Non-profit Corp. <br /> <br />Public (Districts): <br />Special <br />Water/San. <br />Conservancy <br />Irrigation <br />Private (Unincoroorated): <br />Individuals <br />Partnerships <br />Sole Proprietors <br />Closelv Held Coro* <br /> <br />Rate and assessment covenants are a standard provision in all <br />CWCB loan contracts. The covenants require the borrower to levy <br />rates or assessments that are adequate to repay the loan and to <br />cover all operating expenses as well as debt service reserve <br />requirements. <br /> <br />e~tH... <br /> <br />Annual financial reporting will be required in all contracts with <br />public entities as of the date this policy is adopted and will entail <br />the submittal of an annual audit report and a certificate of debt <br />service coverage by a Certified Public Accountant at the time that <br />the annual audit report is submitted to the CWCB staff; or, in the <br />absence of an audit, annual financial reports normally filed by the <br />entity, or as such other information as the Director may require. <br /> <br />Section 37-60-120(1), C.R.S. gives the CWCB discretion to <br />determine what constitutes sufficient collateral that will assure <br />repayment of CWCB Construction Fund and Severance Tax loans. <br />To assure the repayment of such loans, the Board will require a <br />first lien on revenues and other collateral pledged as security, or a <br />parity lien if the borrower meets the existing lien holder's parity <br />requirements. Collateral requirements will be related to the <br />creditworthiness and repayment capacity of each potential <br />borrower. The Board will determine the adequacy of collateral for <br />each individual funding request. <br /> <br />For any specific funding request, the Board may instruct the <br />CWCB Director to make a final determination on the adequacy of <br />collateral, based on guidance provided by the Board. In such <br />cases, the Director will report to the Board on the determination of <br />collateral at a subsequent Board meeting. <br /> <br />Approved by the CWCB <br />January 22,2003 Board Meeting <br />Agenda Item # 16a <br />