BOARD00940

• Board Meeting Date: 3/29/1999
• Description: CF Section - Long-Term Financial Projection
• Board Meetings - Doc Type: Memo

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CWCB Construction Fund

The total of all cash sources to the Construction Fund in FY 1998 was reported by the Colorado
Financial Reporting System (COFRS) to be $15,76 million. The long-term cash sources 10 the
CWCB Construction Fund include the following:

. Principal recoveries on loans
. Interest on loans
. Interest from the State Treasurer
. Mineral Lease Fund distributions
. Other lease agreements
. Occasional one-time General Fund transfers

The return of principal and interest in FY 1998 was $6.65 million. This included $2.7 million
in principal and $3.95 million in interest. Financial statements and a schedule of future annual
payments on the Construction Fund's existing 10an portfolio is included in Appendix A.

By Colorado statute, the cash in the Construction Fund is invested by the State Treasurer and the
earned interest accrues to the Construction Fund. A small amount of the cash has been invested in
certificates of deposits. In FY 1998, the CWCB received $4.85 million in earned interest.

The Federal MineraI Leasing Act requires the return, net of administrative charges, of 50-percent
of rentals and royalties from federal lands in the state of origin. The act directs that such funds be
used by the states for planning, construction, and maintenance of public facilities and services in
areas of the state socially and economically impacted by mineral development. The funds are
deposited in the Colorado Mineral Leasing Fund created by Colorado statute (section 34-63-102,
CRS) which directs that in the distribution of these funds priority shall be given to school districts
and political subdivisions socially or economically impacted by the development or processing of
the federal minerals. Federal mineraI lease revenues to the state are distributed in a complex
"cascade" formula set in state statute. The CWCB receives 10-percent of the distribution in the first
cut. The CWCB's distribution in FY 1998 was $4,24 million. The formula for distribution and the
total amounts received by each group on a calander year basis is summarized in Appendix B.

The Board receives approximately $4,000 per year from lease agreements related with the right-
of-way acquired for the Corps of Engineer's channel improvement project on the South Platte River
downstream of Chatfield Reservoir. COFRS reported a total of$17,257 from lease agreements and
other sources in FY 1998.

There were no General Fund transfers to the Construction Fund in FY 1998. In 1995, $20.3
million was transferred to the Construction Fund pursuant to SB 94-203 which settled a long
standing General Fund obligation.