BOARD02014

• Board Meeting Date: 7/23/2002
• Description: CF Section - Policy Revisions - Financial Policy #7 as Outlined at May 20, 2002 Board Meeting
• 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

EFFECTNEDATE: January 25, 1995

REVISED DATES:

POLICY:

November 24,1997
January 27, 1999
November 20,2001
May 20, 2002

The Colorado Water Conservation Board (CWCB) shall annually establish
lending rates for loans 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* municipal bond for the six months preceding the
May Board meeting of each year, and will be used to set all of the
other lending category interest rates.

2. The Commercial Rate will be calculated 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 High Income Rate will be calculated 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
b. The Municipal Middle Income Rate will be calculated 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.
c. The Municipal Low Income Rate will be calculated 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.