BOARD01850

• Board Meeting Date: 1/27/1999
• Description: CF Section - Revisions to the Guidelines for Interest Rate Setting
• Board Meetings - Doc Type: Memo

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Proposed Revisions

1.3.2 Lending Policy

a The Board's Construction Fund lending policy will be reviewed by the Board in March of each
year. [Aug 94]

b. The Board and the staff of the CWCB will attempt to maintain an overall, long-term rate
of return of no less than 4.0 percent on the aggregate amount of all loans and grants made
through the Construction Fund in order to offset the long-run impacts of price inflation
and to maintain the integrity of the Fund. [Nov 97]

c. The CWCB may loan a maximWll of 50-percent of the cost ofa feasibility study for a water
project. The Board's participation in feasibility study costs must be repaid whether a project
is constructed or not. Repayment for a feasibility study loan may be incorporated in
repayment for a design and construction loan. [Aug 94]

d. The CWCB loan for any project must be repaid to the Construction Fund under repayment
terms to be established by the Board. [Aug 94]

e.

At the last Board meeting of each calendar year, the CWCB staff will present to the Board
a summary of the thirty-year -A' rated municipal bond yields [Nov 97]
for the preceding twelve months. Based on this summary, the staff will recommend to the
Boarda lending rate structure for all Construction Fund and
Severance Tax Trust Fund Perpetual Base Account [Nov 97] projects
which are to be recommended to the General Assembly in the following calendar year. [Jan
95]

f. A specific lending rate for each proj ect will be recommended to the Board by the staff
based on an analysis of: the type of project, the project sponsor's ability to pay, and the
significance of the project to the development of the State's water supplies. Lending rates
will be established for agricultural, commercial, and municipal project purposes using the
following definitions:

. Agricultural projects are those sponsored by ditch companies, irrigation districts, or any
other agricultural entity to provide agricultural water supplies.

. Commercial projects are those sponsored by any private individual or firm using or
supplying water for other than agricultural purposes.

. Municipal projects are those sponsored by established cities, towns, or special districts
organized under Colorado state statutes. [Jan 95]

g.

For municipal projects, separate lending rates will be established for low income,
standard income, and high-income service areas based on median household income in
the project sponsor's service area. [Jan 95]

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