BOARD02363

• Board Meeting Date: 5/24/2004
• Description: CF Section - Policy Revisions - Policy #5 - Collateral for Construction Fund and Perpetual Base Account Project Loans
• Board Meetings - Doc Type: Memo

,'I

STATE OF COLORADO

. Colorado Water Conservation Board

Water Supply Planning & Finance Section
1580 Logan Street, Suite 750
Denver, Colorado 80203
www.cwcb.state.co.u8

Bill Owens
Governor

Russell George
Executive Director

MEMORANDUM

TO:

Colorado Water Conservation Board Members

Mike Serlet, P.E., Chief ~ ('
Water Supply Planning an~e Section

Rod Kuharich
CWCB Director

FROM:

Dan McAuliffe
Deputy Director

DATE:

May 14, 2004

.

SUBJECT: Agenda Item 15 - May 24-25,2004, Board Meeting
Water Supply Planning and Finance - Policy Revisions
Policy #5 - Collateral for Construction Fund and Perpetual Base Account Project
Loans

Introduction

Financial Policy #5 provides a process for determining the appropriate security or collateral to
assure repayment of loans from the Construction Fund and Severance Tax Trust Fund Perpetual Base
Account. The existing policy does not address specific issues surrounding borrowers that are either
individuals without assessment revenues, or newly incorporated entities with very limited history of
revenue and expenditures (new entities). The proposed policy revision attempts to address this issue as
it pertains to collateral.

Background

.

At the March 17,2004 Board meeting several Board members voiced concern about loans
made to individual borrowers and new entities. The Board's discussion of these loans centered on the
collateral necessary to assure repayment of a loan. Staff stated that several of these type of borrowers
have made inquiries as to the availability of loan funds and are interested in applying for loans in the
near future. Most of these prospective borrowers are in the South Platte River basin and are requesting
funds for augmentation and recharge proj ects as a result of Senate Bill 03-73 and the downsizing of the
Groundwater Appropriators of the South Platte (GASP). The Board directed staffto attempt to clarify
these issues by bringing forward suggested policy revisions for Board discussion at the May 2004
Board meeting.

Mike Serlet, P.E., Section Chief - Phone [phone] - Fax [phone]