BOARD01356

• Board Meeting Date: 3/29/1999
• Description: CF Section - General and Financial Matters - Proposed Revisions to Parity Policy and UCC Issues
• Board Meetings - Doc Type: Memo

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Colorado Water Conservation Board
Department of Natural Resources
1313 Sherman Street
Denver, Colorado 80203
Phone: [phone]
FAX: [phone]

STATE OF COLORADO

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Bill Owens
Governor

MEMORANDUM

GregE. Walcher
Executive Director, DNR
Peter H. Evans
Director, eWeB

TO:

Colorado Water Conservation Board Members

Bill Stanton, P.E., Chief, Project Planning and Construction~'
Bill Green, P.E., Manager of Planning~ '

March 22, 1999

FROM:

DATE:

SUBJECT:

Agenda Item 23j, March 29-30, 1999 Board Meeting - Water Project
Construction Loan Program - General and Financial Matters -
Proposed Revisions to Parity Policy and UCC Issues

. Introduction

This memo presents a recommendation for revisions to the Board's parity debt policy. A
discussion of Dee issues has been postponed fOf a future Board meeting,

Discussion

At the conclusion of the discussion of the Town of Erie's request for parity at the January 27,
1999 Board meeting (January Agenda Item lOb.), the Board directed the staff to review the
current policy for granting parity on existing loans, The current policy requires (among other
things) that the borrower's revenues, exclusive of tap and/or connection fees, be adequate to pay
for:

Operation and maintenance expenses,

Debt service on all existing loans having a lien on revenues,

Debt service on the proposed debt, and

Any payments to debt service reserve funds,

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This is essentially the same thing as a debt service coverage ratio of 1,0, disallowing tap and lor
connection fees in the revenue part of the equation,