(1) The board of regents shall establish policies and procedures to determine and monitor the ability of the university of Colorado: (a) To pay principal, interest, and any other costs due in connection with any revenue bonds issued pursuant to section 23-5-102; (b) To establish and maintain the necessary reserves required to pay the principal, interest, and other costs due in connection with any revenue bonds issued pursuant to section 23- 5-102; (c) To pay costs of operation and maintenance of the auxiliary facility or group of auxiliary facilities on behalf of which revenue bonds are issued pursuant to section 23-5-102; and (d) To satisfy all covenants and agreements set forth in any resolution, indenture, or other document authorizing or executed in connection with the issuance of revenue bonds pursuant to section 23-5-102. (2) The policies and procedures adopted pursuant to subsection (1) of this section shall include, but need not be limited to, the following requirements: (a) That, upon issuance of revenue bonds pursuant to section 23-5-102, the university shall identify the primary revenue sources for payment of principal and interest on the bonds from among those revenues and other moneys pledged for payment of principal and interest on the revenue bonds; (b) That, upon issuance of revenue bonds pursuant to section 23-5-102, the university shall perform a financial analysis, based upon assumptions approved by the board of regents and the state auditor, that demonstrates that revenues expected to be annually available from the sources identified under paragraph (a) of this subsection (2) will be sufficient to pay at least one hundred twenty-five percent of the annual principal and interest on the revenue bonds; (c) That the university shall annually review the revenue sources identified under paragraph (a) of this subsection (2) to determine if the financial analysis required in paragraph (b) of this subsection (2) shows sufficient revenues for payment of principal and interest on the revenue bonds and, if the revenues are not sufficient, take such action as the board of regents and the state auditor shall require to assure that adequate revenues are available to pay the principal and interest on the revenue bonds; (d) That the maximum annual debt service on all revenue bonds issued pursuant to section 23-5-102, except as provided for in sections 23-5-101.8 and 23-5-103, outstanding at any time for the university shall not exceed ten percent of the university's unrestricted current fund expenditures plus mandatory transfers; (e) That the university shall establish and maintain such debt service reserves and such reserves for repair and replacement of any auxiliary facility or group of auxiliary facilities on behalf of which revenue bonds are issued pursuant to section 23-5-102 and as may be required by the terms of the resolution, indenture, or other document authorizing or executed in connection with the issuance of the revenue bonds and subject to review and approval by the state auditor; and (f) That the university shall annually report to the state auditor regarding compliance with the requirements specified in this subsection (2) and any additional requirements that may be imposed by the board of regents. (3) The policies and procedures required under this section shall be established no later than January 1, 1995, and shall apply to any revenue bonds issued pursuant to section 23-5-102 on or after such date.
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