Laserfiche WebLink
<br />~ <br /> <br />. <br /> <br />. <br /> <br />-. <br /> <br />Colorado Water Conservation Board <br />Department of Natural Resources <br />721 Centennial Building <br />1313 Sherman Street <br />Denver, Colorado 80203 <br />Phone: 13031866-3441 <br />fAX: 13031 866.4474 <br /> <br />STATE OF COLORl\DO <br />~ <br />~ <br /> <br />Ro} Romer <br />GO\t'rnol <br /> <br />TO: <br /> <br />Colorado Water Conservation Board Members <br /> <br />J<lmes S. Lochhead <br />Executive Director, ONR <br />Oarie,C.lile, PE <br />Director, eWeB <br /> <br />FROM: Bill Green, P.E. <br />Project Planning and Construction Section <br /> <br />DATE: November 12, 1996 <br /> <br />SUBJECT: Agenda Item 5., November 25-26, 1996 Board Meeting - Water Project <br />Construction Loan Program - Interest Rate Recommendation for 1997 <br /> <br />BACKGROUND <br /> <br />Section 1.3.2 of the Construction Fund Guidelines, as revised, deals with the setting oflending <br />rates for Construction Fund loans and states that: "At the lasl Board meeting of each calendar <br />year, the CWCB staff will present to the Board a summary of the yield on 3D-year Us. TreaslllY <br />Bondsfor the preceding twelve months. Based on Ihis summwy, Ihe staffwill recommend to the <br />Board a Standard 3D-year lending rate for Conslruction Fund projecls which are 10 be <br />recommended to the General Assembly in the following calendar year. .. <br /> <br />STANDARD LENDING RATE <br /> <br />Attached is a trace of the yield on 3D-year U.S. Treasury Bonds from mid-October 1995 to mid- <br />October 1996 as provided to us by the Colorado Water Resources and Power Development <br />Authority. The yield for the Bond Buyer Revenue Bond Index (BBRB!) is included for purposes <br />of comparison. (The BBRBI is based on 25 municipal revenue bonds with 3D-year maturities.) <br /> <br />The average yield for the 3D-year T -Bond for this period of time was 6.62 percent. If, as in <br />previous years, we subtract 2.D percent from the T-Bond yield we arrive at 4.62 percent. When <br />this number is rounded upward to the nearest one-quarter of one percent it results in a standard <br />3D-year lending rate for 1997 of 4.75 percent. <br /> <br />CATEGORIES OF LENDING <br /> <br />The revised Guidelines also provide that lending rates will be established for agricultural, <br />commercial, and municipal projects. For municipal projects, lending rates will be established for <br />low, medium, and high income service areas based on median household income in the project <br />