FLOOD05130

• County: Statewide
• Community: State of Colorado
• Basin: Statewide
• Title: Water Project Development Financing Needs
• Date: 12/30/1982
• Floodplain - Doc Type: Educational/Technical/Reference Information

of project proponents. However, these activities are so
expensive as to frequently exceed the capacity of local entities
(such as water conservancy districts, irrigation companies and
districts, and small municipalities) to pay for them.

With respect to the financing of construction or
rehabilitation, there are essentially three means by which this'
can be accomplished:

(1) Revenue financing,

(2) General obligation financing, and

(3) "pay as you go" out of previously accumulated monies.

Revenue and general obligation financing both enable governmental
entities to obtain capital from private financial markets. 'They
differ, however, in that revenue financing relies on project
revenues to retire the indebtedness incurred for project
construction or rehabilitation, while future tax revenues must be
pledged toward retiring indebtedness incurred through general
obligation financing. ."pay as you go" financing obtains capital
from the accumulation of previously collected taxes and therefore
involves no indebtedness. Table 1 summarizes these three
approaches.

TABLE 1
Means Source Source
of ,of of
Financing Capital Repayment
Revenue Private Project
funds revenues,
General Private Future
obligation funds ,taxes
"Pay as you go" Previously None ' "
collected required'
taxes

!}.'

It is important to note that financing for the construction
or rehabilitation of any given project is not necessarily limited
to only one of these three means. Indeed, one of the challenges
of financing future projects will be to identify situations in
which combinations of these three approaches can be used to raise
the capital which will be required if Colorado is to proceed with
an aggressive and timely water project construction and
rehabilitation program.

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