BOARD01707

• Board Meeting Date: 9/27/1999
• Description: Construction Fund Borrower Creditworthiness and Financial Need Determination. ‎(Audit Item #8)‎
• Board Meetings - Doc Type: Memo

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POLICY NUMBER: 5

SUBJECT:

COLLATERAL FOR
SEVERANCE TAX
PROJECT LOANS

CONSTRUCTION FUND AND
PERPETUAL BASE ACCOUNT

EFFECTIVE DATE: October 1,1999

POLICY:

The Colorado Water Conservation Board (CWCB), pursuant to
Section 37-60-120(1), C.R.S" shaH 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
foHowing table, Collateral types will be evaluated and taken in
priority until sufficient security is established for a specific loan,

Prioritized Types of Collateral Per Type of Project Sponsor Entity

Public Public Private Private
Governments 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 property real property
3, Any other assets 3, Any other assets