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<br />. <br /> <br />. <br /> <br />. <br /> <br />STATE OF COLORADO <br /> <br />Colorado Water Conservation BOaTd <br />Department ofNaturaI Resources <br />1313 Sherman Street, Room 721 <br />Denver, Colorado 80203 <br />Phone: (303) 866-3441 <br />FAX: (303) S66,4474 <br />www.cwcb.state.co,o5 <br /> <br />Q <br /> <br />MEMORANDUM <br /> <br />Bill Owens <br />Governor <br /> <br />TO: <br /> <br />Colorado Water Conservation Board Members <br /> <br />John Van Sciver, P.E. ~5 <br />Mike Serlet, PE, Chief <br />Water Supply Planning inance Section. <br /> <br />Greg E. Walcher <br />Executive Director <br /> <br />FROM: <br /> <br />Dan McAuliffe <br />Acting Director <br /> <br />DATE: November 9,2000 <br /> <br />SUBJECT: Agenda Item 12b., November 20-21, 2000 Board Meeting <br />Financial Matters - Total Fund Equity Growth Rate: <br />Estimate of Funds Available for Grants <br />and Non-reimbursable Projects <br /> <br />Introduction <br />The CWCB approved Policy #13 at the September 25, 2000 Board meeting, The policy is titled: <br /> <br />"TARGET GROWTH RATE FOR THE COMBINED EQUITY OF THE CONSTRUCTION FUND <br />AND SEVERANCE TAX PERPETUAL BASE ACCOUNT." <br /> <br />The Board asked that Policy #13 be discussed at the November 2000 board meeting for the <br />purpose of setting a Target Growth Rate. Policy #13 is attached. <br /> <br />Discussion <br />Staff has reviewed the various long-term measures of inflation and believes the most appropriate <br />measure is the Engineering News Record nation Construction Cost Index. That index has an <br />average value of 3.84% based on 23 years of data (1977 - 1999.) Please see attached graph. <br /> <br />Policy #13 recommends that Total Fund Equity grow at the inflation rate, plus 0.5%. The long term <br />average ENR CCI is 3.84%. Adding 0.5% gives 4.34% (Target Growth Rate.) <br /> <br />The Total Fund Equity actually grew at a 7.7% rate (Actual Growth Rate) for the period July 1999 <br />to June 2000. The Margin between the Actual and the Target Growth Rates (7.7% - 4.34%) is <br />3.36% (Margin.) <br /> <br />Total Fund Equity was $242 million as of July 1, 1999. <br /> <br />Estimate of Funds Available for Grants and Non-reimbursable Projects: <br />Estimate = Margin x Total Fund Equity 1999 = 3.36% x $242 million = $8.13 million <br />