BOARD01859

• Board Meeting Date: 5/24/1999
• Description: CF Section - Proposed Revisions to Parity Policy
• Board Meetings - Doc Type: Memo

:: ~ ::J,

.

.

.

Colorado Water Conservation Board
Department of Natural Resources
1313 Sherman Street
Denver, Colorado 80203
Phone, 13031866-3441
FAX, 13031 866-4474

STATE OF COLORADO

.

MEMORANDUM

Bill Owens
Governor

TO:

GregE. Walcher
Executive Director, DNR
Peter H. EvJns
Director, CWCB

FROM:

Colorado Water Conservation Board Members

Mike Serlet, P.E., Chief, Project Planning and construction;uJ
Bill Green, P.E., Manager of Planning ~

DATE: May 7, 1999

SUBJECT: Agenda Item 17, May 24-25, 1999 Board Meeting - Water Project
Construction Loan Program - Proposed Revisions to Parity Policy

Introduction

This memo presents a recommendation for revisions to the Board's parity debt policy.

Discussion

At the conclusion of the discussion of the Town of Erie's request for parity at the January 27,
1999 Board meeting (January Agenda Item lOb.), the Board directed the staff to review the
current policy for granting parity on existing loans. The current policy requires (among other
things) that the borrower's revenues, exclusive of tap and/or connection fees, be adequate to pay
for:

Operation and maintenance expenses,

Debt service on all existing loans having a lien on revenues,

Debt service on the proposed debt, and

Any payments to debt service reserve funds.

This is essentially the same thing as a debt service coverage ratio of 1.0, disallowing tap and lor
connection fees in the revenue part of the debt service coverage equation.

The proposed revisions to the existing policy are shown on the attached sheet, which is a revised
version of the attachment to the Town of Erie memorandum for the Jaimary meeting. The
suggested revisions are: