BOARD01387

• Board Meeting Date: 11/19/2001
• Description: CF Section - Policy Review - Policy #7 - Annual Construction Fund and the Severance Tax Trust Fund Perpetual Base Account Lending Rate Determination
• Board Meetings - Doc Type: Memo

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POLICY NUMBER: 7

SUBJECT:

ANNUAL CONSTRUCTION FUND AND SEVERANCE TAX
TRUST FUND PERPETUAL BASE ACCOUNT LENDING RATE
DETERMINATION

EFFECTlVE DATE: January 25, 1995

REVISED DATES: November 24,1997
January 27, 1999

POLICY: The Colorado Water Conservation Board (CWCB) shall annually establish
lending rates for 10a1ls to be made from the Construction Fund and
Severance Tax Trust fund Perpetual Base Account. Thirty-year lending
rates will be established for agricultural, commercial, and municipal
categories ofloans using the procedure outlined below:

1. A Baseline Rate will be established equal to the average yield of
the 30-year "A" rated* mnnicipal bond for the six months
preceding the May Board meeting of each year, and will be used to
set all ofthe other lending eategory interest rates.

2. The Commercial Rate will be calcnlated as 110 percent of the
Baseline Rate, rounded to the nearest one-quarter of one percent.

3. Municipal Rates will be based on the project sponsor's service area
median household income, as established by the Colorado Department
of Local Affairs, and will be structured as follows:

a,

The Municipal Hil!h Income Rate will be ealenlated as
90 percent of the Baseline Rate rounded to the nearest
one-quarter of one percent. The High Income Rate will
apply where the median household income in the project
sponsor's service area is greater than 11 0 percent of the
state-wide median household income
The Mnnieipal Middle Income Rate will be ealculated
as 80 percent of the Baseline Rate rounded to the nearest
one-quarter of one percent. The Middle Income Rate will
apply where the median household income in the project
sponsor's service area is equal to 80 percent to 110 percent
of the statewide median household income.
The Municipal Low Ineome Rate will be calcnlated as
70 percent of the Baseline Rate rounded to the nearest
one-quarter of one percent. The Low Income Rate will
apply where the median household income in the project
sponsor's service area is less than 80 percent of the
statewide median household income.

b.

c.

4. The Al!ricnItural Rate will be will be ealcnlated as 60 pereent of
the Baseline Rate rounded to the nearest one-quarter of one percent.