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<br />1.3.2 Lending PoliCJI <br /> <br />The Board's Construction Fund lending policy is outlined in the following paragraphs. <br />The lending policy is reviewed by the Board in March of each year. <br /> <br />a. The total amount of CWCB loans for any single project is generally limited to a <br />maximum of 75-percent of the wta1 engineering and construction cost of the <br />project. <br /> <br />b. The CWCB may loan a maximum of 50-percent of the cost of a feasibility study <br />for a water project. The Board's participation in feasibility study costs must be <br />repaid whether a project is constructed or not. Repayment for a feasibility study <br />loan may be incorporated in repayment for a design and construction loan. <br /> <br />c. The CWCB loan for any project must be repaid to the Construction Fund under <br />repayment terms to be established by the Board. Subject to annual review and <br />revision in March of each year, the following shall be the "standard" terms and <br />conditions of CWCB Construction Fund loans: <br /> <br />(1) <br /> <br />Loan term: <br /> <br />30 years <br /> <br />(2) <br /> <br />Loan interest rate: <br /> <br />fixed at the then current 30-year Treasury <br />Bond rate less 200 basis points (2-percent) <br /> <br />A slightly lower interest rate may be available for a shorter repayment period <br />based upon an analysis of the Treasury Bond yield curve. <br /> <br />d. Deviations from the standard term!. will be based on staff and Board review of the <br />benefits of the proJiect to the State coupled with the fmancial capacity of the <br />project sponsors. Deviation from standard loan telms may require additional <br />documentation of financial need. <br /> <br />e. The project sponsor must provide a.dequate security to guarantee repayment of the <br />loan. The security may be: <br /> <br />. title to project property equal in value to tlle loan; <br />. a pledge of revenues or taxes; or <br />. bonds, notes or other securities. <br /> <br />f. Preference for funding will be E;iven to those prqjects which are most cost <br />effective, which demonstrate the .greatest need for assistance in fmancing, and <br />which best relate to the Board's Long Range Plan. <br /> <br />g. In general, Construction Fund loans will be utilized to supplement those funds <br />which could be made available to the project sponsor from other sources. <br /> <br />4 <br />