The Internal Revenue Service is auditing $35.3 million of clean water revenue bonds issued by the Colorado Water Resources and Power Development Authority in 2007.

The authority disclosed the audit of the series A bonds in an event notice filed with the Municipal Securities Rulemaking Board’s EMMA system.

The authority received a May 22 letter from the IRS stating the bonds were “selected for examination as part of a project/initiative involving the financing of utility facilities.”

The bonds were used to provide loans to several Colorado governmental agencies as part of the water pollution control facilities program to finance or refinance certain costs of improvement to wastewater treatment facilities, according to the official statement.

The authority is a political subdivision of Colorado established in 1981. It was created to initiate, acquire, construct, maintain and repair projects for the management of water resources of Colorado.

UBS Investment Bank and A.G. Edwards were co-underwriters on the transaction. Fulbright & Jaworski L.L.P was bond counsel.

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