BOARD01707

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

Page 2 - Policy # 5
Collateral

Entity Types are defined as:

Public (Governments):
Municipalities
Enterprises
Counties
Federal Govt.

Private (Incorporated):
Mutual Ditch Co,
Homeowners Assoc.
Non-profit Corp,

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Public (Districts):
Special
Water/San,
Conservancy
Irrigation

Private (Unincorporated):
Individuals
Partnerships
Sole Proprietors

Rate and assessment covenants are a standard provision in all
CWCB loan contracts, The covenants require the borrower to levy
rates or assessments that are adequate to repay the loan and to
cover all operating expenses as well as debt service reserve
requirements,

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Annual financial reporting will be required in all contracts with
public entities as of the date this policy is adopted and will entail
the submittal of an annual audit report and a certificate of debt
service coverage by a Certified Public Accountant at the time that
the annual audit report is submitted to the CWCB staff,

Section 37-60-120(1), c.R.S, gives the CWCB discretion to
determine what constitutes sufficient collateral that will assure
repayment of CWCB Construction Fund loans, Collateral
requirements will be related to the creditworthiness and repayment
capacity of each potential borrower. The Board will determine the
adequacy of collateral for each individual funding request.

For any specific funding request, the Board may instruct the
CWCB Director to make a final determination on the adequacy of
collateral, based on guidance provided by the Board, In such
cases, the Director will report to the Board on the determination of
collateral at a subsequent Board meeting,

Revised 9!l7/99
WEG

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