Date: 07/20/2009

Final
WATER RESOURCES REVIEW COMMITTEE MEETING

WATER RESOURCES REVIEW COMMITTEE

Votes: View--> Action Taken:
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05:11 PM -- First Meeting of the Water Resources Review Meeting

Representative Curry, Acting Chair, called the meeting to order.


05:11 PM Colorado Water Resources and Power Development Authority Water Project Financing

Dan Law, Executive Director of the Colorado Water Resources and Power Development Authority (CWRPDA), explained that the Animas-La Plata Project is a federal water storage project near Durango built primarily to address tribal water needs (Attachment E). To help meet the cost-sharing criteria mandated by the federal government, the authority placed $30 million in an escrow account in 1989 for the project. By 1995 these funds had grown with interest earnings to meet the authority’s planned cost-sharing obligation of $42.4 million. Earnings above this amount ($17.7 million) were transferred to the Drinking Water Revolving Fund (DWRF) to provide the 20 percent state match for the (DWRF) capitalization grants. He explained that the authority provided $7.2 million for the Animas-La Plata Water Conservancy District in exchange for 2,600 acre-feet of average annual depletion and 2,919 acre feet of storage in the reservoir, called Lake Nighthorse.

Attachment E.pdf

05:17 PM

Mr. Law explained that the authority placed $15 million in an escrow to assist with water resources development in the La Plata River Basin. The La Plata Water Conservancy District received approval from U.S. Army Corps of Engineers to build a 5,400 acre-foot (AF) reservoir called the Long Hollow Reservoir. The proposed reservoir will be an on-channel reservoir with the dam embankment located on Long Hollow Creek approximately 0.5 mile upstream of the confluence of Long Hollow and the La Plata River and five miles upstream of the Colorado/New Mexico border. The project will enable the state to meet its delivery obligations under the La Plata River Compact and supplement the water supply to existing irrigated lands in Colorado. The authority is working with the La Plata Water Conservancy District to obtain a consulting engineer to develop the final design and conduct other activities.

05:19 PM

Mr. Law explained that in November of 2008, the authority entered into an interim loan agreement with the La Plata West Water Authority to pay for the construction of an intake tower in the reservoir associated with the Animas-La Plata Project. This project will provide water to communities in the La Plata River Basin. He also described other loans issued by the authority for water development projects including $8.1 million loan to the City of Fountain to purchase land for a reservoir and a building and a proposed loan of $7 to 9 million for the North Weld County Water District for additional transmission lines.

05:24 PM -- Small Hydropower Loan Program and Small Water Resource Loan Program

Mr. Law explained that the CWRPDA Board of Directors budgeted $10 million for 2009 to be loaned to local governments for new small hydropower (less than 5 MW) facilities. Loans may extend to 20 years with an interest rate of two percent. In 2009, the City of Cortez was approved for a $1.6 million Small Hydropower Loan. In addition to the loan funds, the Board authorized $165,000 to provide matching grants for communities to plan and design small hydropower facilities. Eleven matching grants have been awarded to governmental agencies. The Small Water Resources Projects (SWRP) Program provides lower cost loans for the construction, expansion or rehabilitation of existing public water systems owned by municipal governments and special districts having a population over 1,000 or a customer base of at least 650 taps. The bonds issued to fund these loans are insured by the Financial Guaranty Insurance Company. He explained that the ongoing financial issues with FGIC may prevent further loans from being issued from the SWRP.

05:27 PM -- American Recovery and Reinvestment Act

Mr. law provided an update on the federal American Recovery and Reinvestment Act that includes funding for public waste water and drinking water treatment projects. In 2009, approximately $90 million will be available for public waste water project loans from Water Pollution Control Revolving Fund (WPCRF) including $32 million from the federal American Recovery and Reinvestment Act (ARRA). Approximately $70 million will be available in 2009 for public waste water project loans from Drinking Water Revolving Fund (DWRF) including $32 million from the ARRA. He explained that ARRA moneys may be used for principal forgiveness of up to $2 million for each project and to provide no interest loans. Mr. law also expressed concern that the ARRA includes requirements that increase the cost of a project and may make it more difficult for projects to qualify for the federal moneys. For example, project sponsors must pay prevailing wages according to the federal Davis-Bacon Act and use American iron, steel, and manufactured goods in projects that use ARRA moneys. He also responded to questions about the selection process for ARRA grant recipients and the preparation of the priority list that identifies eligible projects.

05:44 PM -- Other WPCRF and DWRF Loans

Mr. Law described terms for WPCRF and DWRF loans issued by the authority using non ARRA moneys. In 2009, approximately $104 million will be available for these loans at interest rates of 0 to 2.5 percent depending upon a community's financial situation. He estimated that 10 to 20 jobs are created for each $1 million issued for loans. He also responded to questions about the current financial crisis and the challenge of obtaining affordable bond insurance for water projects.


05:57 PM -- Water Congress Review of State Budget Issues

Chris Treese, Colorado Water Congress (CWC), explained that a committee has been formed from members selected by CWC State Affairs Committee. The purpose of the committee is to review short and long term funding options for Colorado Water Conservation Board loan programs and the Division of Water Resources. He explained that the committee has met once and discussed funding alternatives for the Division of Water Resources and the water courts.

06:06 PM

The meeting adjourned. There was no public testimony and no draft bills were requested. The next meeting is tentatively scheduled for Wednesday, August 19, from 2:00 p.m. to 5:00 p.m. at the Steamboat Sheraton.