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.,. J . . . POLICY NUMBER: 5 SUBJECT: COLLATERAL FOR CONSTRUCTION FUND AND SEVERANCE TAX PERPETUAL BASE ACCOUNT PROJECT LOANS EFFECTNE DATE: September 27, 1999 POLICY: The Colorado Water Conservation Board (CWCB), pursuant to Section 37-60-120(1), C.R.S., shall take a sufficient security interest in property or take such bonds, notes or other securities evidencing an obligation, as will assure repayment of Construction Fund and Severance Tax Perpetual Base Account loans. The Board's determination of sufficient security will be based on the type of entity applying for project funding as well as the entity's creditworthiness, repayment capacity, and available assets. PURPOSE: To establish a consistent method for determining sufficient collateral requirements of potential loan recipients. APPLICABILITY: This policy applies to the consideration of all loan applications from the CWCB Construction Fund and Severance Tax Perpetual Base Account. PROCEDURE: The CWCB staff will evaluate and recommend to the Board collateral requirements for project loan applications based on the following table. Collateral types will be evaluated and taken in priority until sufficient security is established for a specific loan. If real property is offered as collateral, the applicant may be required to submit supporting documentation of land values from a Colorado Certified General Appraiser. Prioritized Types of Collateral Per Type of Project Sponsor Entity . Public Public Private Private . Govemments Districts Incorporated Unincorporated 1. Pledge of 1. Pledge of 1. Pledge of 1. Facilities, water revenues backed by revenues backed by assessment revenues rights, and/or other rate covenant and rate covenant and backed by real property annual financial annual financial assessment covenant reporting reporting 2. Facilities, water 2. Facilities, water 2. Any other assets rights, and/or other rights, and/or other real propertv real property 3. Any other assets 3. Anv other assets