Edgar Filing: Delaware Investments Colorado Municipal Income Fund, Inc.

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number:	811-07810

Exact name of registrant as specified in charter:	Delaware Investments^®Colorado
	Municipal Income Fund, Inc.

Address of principal executive offices:	2005 Market Street
	Philadelphia, PA 19103

Name and address of agent for service:	David F. Connor, Esq.
	2005 Market Street
	Philadelphia, PA 19103

Registrant’s telephone number, including area code:	(800) 523-1918

Date of fiscal year end:	March 31

Date of reporting period:	December 31, 2014

Item 1. Schedule of Investments.

Schedule of investments

Delaware Investments^®Colorado Municipal Income Fund, Inc.
December 31, 2014 (Unaudited)

		Principal	Value
		Amount°	(U.S. $)
Municipal Bonds – 137.64%
Corporate-Backed Revenue Bonds – 4.72%
	Public Authority for Colorado
	Energy Revenue
	6.25% 11/15/28	865,000	$	1,125,720
	Public Authority of Colorado
	Energy Natural Gas
	Revenue
	Series 2008
	6.50% 11/15/38	1,750,000		2,398,725
				3,524,445
Education Revenue Bonds – 29.66%
	Colorado Educational &
	Cultural Facilities Authority
	Revenue
	5.125% 11/1/49	765,000		773,270
	(Academy Charter School
	Project)
	5.50% 5/1/36 (SGI)	1,720,000		1,726,072
	(Bromley Charter School
	Project)
	5.25% 9/15/32 (SGI)	3,245,000		3,298,543
	(Charter School -
	Community Leadership
	Academy) 7.45% 8/1/48	500,000		589,845
	(Charter School - Peak to
	Peak Charter)
	5.00% 8/15/34	1,000,000		1,118,580
	(Johnson & Wales
	University) Series A
	5.25% 4/1/37	900,000		1,027,548
	(Liberty Charter School)
	Series A 5.00% 1/15/44	1,000,000		1,086,670
	(Littleton Charter School
	Project)
	4.375% 1/15/36 (AGC)	1,200,000		1,212,804
	(Skyview Charter School)
	144A 5.50% 7/1/49 #	750,000		791,655
	(Student Housing - Campus
	Village Apartments)
	5.00% 6/1/23	1,065,000		1,172,916
	Colorado School of Mines
	Series B 5.00% 12/1/42	2,500,000		2,796,675
	Colorado State Board of
	Governors
	(University Enterprise
	System) Series A
	5.00% 3/1/39	10,000		11,172
	University of Colorado
	5.00% 6/1/31	3,185,000		3,667,528
	Series A 5.00% 6/1/33	1,000,000		1,167,600
	University of Colorado
	Series A 5.375% 6/1/38	750,000		865,155
	Western State College
	5.00% 5/15/34	750,000		815,018
				22,121,051
Electric Revenue Bonds – 3.45%
	Colorado Springs Utilities
	System Improvement
	Revenue
	Series C 5.50% 11/15/48	750,000		847,177
	Platte River Power Authority
	Series HH 5.00% 6/1/28	1,500,000		1,727,775
				2,574,952
Healthcare Revenue Bonds – 41.97%
	Aurora Hospital Revenue
	(Children’s Hospital
	Association Project)
	Series A 5.00% 12/1/40	4,000,000		4,338,800
	Colorado Health Facilities
	Authority Revenue
	(Boulder Community
	Hospital Project)
	5.00% 10/1/32	500,000		558,410
	(Catholic Health Initiatives)
	Series A 5.00% 7/1/39	750,000		817,815
	Series A 5.00% 2/1/41	2,400,000		2,609,352
	Series A 5.25% 2/1/33	1,625,000		1,819,220
	Series A 5.25% 1/1/45	1,000,000		1,130,870
	Series C-1
	5.10% 10/1/41 (AGM)	1,000,000		1,061,920
	Series D 6.125% 10/1/28	750,000		864,810
	(Christian Living
	Community Project)
	6.375% 1/1/41	615,000		670,682
	Series A 5.75% 1/1/37	885,000		905,169
	(Covenant Retirement
	Communities Inc.) Series A
	5.75% 12/1/36	1,000,000		1,109,540
	(Evangelical Lutheran Good
	Samaritan Society)
	5.00% 6/1/28	1,250,000		1,370,350
	5.50% 6/1/33	2,000,000		2,275,300
	5.625% 6/1/43	1,000,000		1,136,550
	(Healthcare Facilities -
	American Baptist)
	8.00% 8/1/43	500,000		601,105

(continues) NQ-OV2 [12/14] 2/15 (13989) 1

Schedule of investments

Delaware Investments^®Colorado Municipal Income Fund, Inc. (Unaudited)

		Principal	Value
		Amount°	(U.S. $)
Municipal Bonds (continued)
Healthcare Revenue Bonds (continued)
	Colorado Health Facilities
	Authority Revenue
	(Mental Health Center of
	Denver Project) Series A
	5.75% 2/1/44	1,500,000	$	1,694,565
	(National Jewish Health
	Project) 5.00% 1/1/27	500,000		522,195
	(Sisters of Charity of
	Leavenworth Health
	System) Series A
	5.00% 1/1/40	4,750,000		5,254,260
	(Total Long-Term Care)
	Series A 6.00% 11/15/30	400,000		444,128
	Denver Health & Hospital
	Authority Health Care
	Revenue
	(Recovery Zone Facilities)
	5.625% 12/1/40	750,000		837,030
	University of Colorado
	Hospital Authority Revenue
	Series A 5.00% 11/15/37	500,000		515,205
	Series A 6.00% 11/15/29	650,000		768,287
				31,305,563
Housing Revenue Bond – 0.37%
	Colorado Housing & Finance
	Authority
	(Single Family Mortgage -
	Class 1) Series A
	5.50% 11/1/29 (FHA) (VA) (HUD) 265,000			274,519
				274,519
Lease Revenue Bonds – 9.09%
	Aurora Certificates of
	Participation
	Series A 5.00% 12/1/30	630,000		712,939
	Colorado Building Excellent
	Schools Today
	Certificates of Participation
	Series G 5.00% 3/15/32	2,000,000		2,268,700
	Glendale Certificates of
	Participation
	5.00% 12/1/25 (SGI)	1,500,000		1,607,220
	Pueblo County Certificates of
	Participation
	(County Judicial Complex
	Project)
	5.00% 9/15/42 (AGM)	2,000,000		2,188,960
				6,777,819
Local General Obligation Bonds – 11.24%
	Adams 12 Five Star Schools
	5.00% 12/15/25	250,000		316,357
	Arapahoe County School
	District No. 1 Englewood
	5.00% 12/1/31	2,935,000		3,375,221
	Boulder Larimer & Weld
	Counties St. Vrain Valley
	School District No. Re-1J
	5.00% 12/15/33	750,000		847,417
	Denver City & County
	(Better Denver & Zoo)
	Series A 5.00% 8/1/25	650,000		747,221
	Denver International Business
	Center
	Metropolitan District No. 1
	5.00% 12/1/30	650,000		694,337
	Jefferson County School
	District No. R-1
	5.25% 12/15/24	750,000		952,665
	Pueblo County School District
	No. 70
	5.00% 12/1/31	500,000		569,800
	Rangely Hospital District
	6.00% 11/1/26	750,000		882,547
				8,385,565
Pre-Refunded/Escrowed to Maturity Bonds – 3.82%
	Adams & Arapahoe Counties
	Joint School District No.
	28J (Aurora)
	6.00% 12/1/28-18§	600,000		714,252
	Colorado State Board of
	Governors
	Series A 5.00% 3/1/39-19§	690,000		797,737
	Regional Transportation
	District Revenue
	(FasTracks Project) Series A
	4.375% 11/1/31-16 (AMBAC)§	1,250,000		1,337,437
				2,849,426

2 NQ-OV2 [12/14] 2/15 (13989)

(Unaudited)

		Principal	Value
		Amount°	(U.S. $)
Municipal Bonds (continued)
Special Tax Revenue Bonds – 21.03%
	Central Platte Valley
	Metropolitan District
	5.00% 12/1/43	375,000	$	390,401
	City of Commerce City
	5.00% 8/1/44 (AGM)	1,000,000		1,137,350
	Denver Convention Center
	Hotel Authority Revenue
	5.00% 12/1/35 (SGI)	2,875,000		2,971,773
	Guam Government Business
	Privilege Tax Revenue
	Series A 5.125% 1/1/42	435,000		478,409
	Series A 5.25% 1/1/36	565,000		634,303
	Regional Transportation
	District Revenue
	Series A 5.375% 6/1/31	460,000		525,421
	(Denver Transit Partners)
	6.00% 1/15/41	2,175,000		2,448,919
	(FasTracks Project)
	Series A
	4.50% 11/1/36 (AGM)	1,500,000		1,557,525
	Series A 5.00% 11/1/38	4,085,000		4,672,831
	Tallyns Reach Metropolitan
	District No. 3
	(Limited Tax Convertible)
	5.125% 11/1/38	295,000		303,673
	Virgin Islands Public Finance
	Authority
	(Matching Fund Senior
	Lien)
	5.00% 10/1/29 (AGM)	500,000		570,425
				15,691,030
Transportation Revenue Bonds – 9.38%
	Colorado High Performance
	Transportation Enterprise
	Revenue
	(Senior U.S. 36 & I-25
	Managed Lanes)
	5.75% 1/1/44 (AMT)	1,110,000		1,199,266
	Denver City & County Airport
	System Revenue
	Series A 5.25% 11/15/36	750,000		849,330
	Series B 5.00% 11/15/27	1,000,000		1,172,070
	Series B 5.00% 11/15/28	1,000,000		1,164,800
	Series B 5.00% 11/15/37	2,000,000		2,259,840
	E-470 Public Highway
	Authority
	Series C 5.25% 9/1/25	310,000		350,830
				6,996,136
Water & Sewer Revenue Bond – 2.91%
	City of Aurora Water Revenue
	First Lien Series A
	5.00% 8/1/36 (AMBAC)	2,000,000		2,169,060
				2,169,060
Total Municipal Bonds
	(cost $94,353,277)			102,669,566

Short-Term Investment – 0.67%
Variable Rate Demand Note – 0.67%¤
	Colorado Educational &
	Cultural Facilities Authority
	Series PG-B-4 (National
	Jewish Federation Board)
	0.01% 12/1/35 (LOC-TD
	Bank N.A.)	500,000		500,000

Total Short-Term Investment
	(cost $500,000)			500,000

Total Value of
	Securities – 138.31%
	(cost $94,853,277)			103,169,566
Liquidation Value of
	Preferred
	Stock – (40.22%)			(30,000,000	)
Receivables and Other
	Assets Net of
	Liabilities – 1.91%			1,422,267
Net Assets – 100.00%			$	74,591,833

(continues) NQ-OV2 [12/14] 2/15 (13989) 3

Schedule of investments

Delaware Investments^®Colorado Municipal Income Fund, Inc. (Unaudited)

____________________

#	Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At Dec. 31, 2014, the aggregate value of Rule 144A securities was $791,655, which represents 1.06% of the Fund’s net assets.
¤	Tax-exempt obligations that contain a floating or variable interest rate adjustment formula and an unconditional right of demand to receive payment of the unpaid principal balance plus accrued interest upon a short notice period (generally up to 30 days) prior to specified dates either from the issuer or by drawing on a bank letter of credit, a guarantee, or insurance issued with respect to such instrument. The rate shown is the rate as of Dec. 31, 2014.
°	Principal amount shown is stated in U.S. dollars unless noted that the security is denominated in another currency.
§	Pre-refunded bonds. Municipal bonds that are generally backed or secured by U.S. Treasury bonds. For pre-refunded bonds, the stated maturity is followed by the year in which the bond is pre-refunded.

Summary of abbreviations:

AGC – Insured by Assured Guaranty Corporation

AGM – Insured by Assured Guaranty Municipal

Corporation

AMBAC – Insured by AMBAC Assurance Corporation

AMT – Alternative Minimum Tax

FHA – Federal Housing Administration

HUD – Housing and Urban Development Section 8

LOC – Letter of Credit

SGI – Insured by Syncora Guarantee Inc.

4 NQ-OV2 [12/14] 2/15 (13989)

Notes

Delaware Investments^®Colorado Municipal Income Fund, Inc.
December 31, 2014 (Unaudited)

1. Significant Accounting Policies

The following accounting policies are in accordance with U.S. generally accepted accounting principles (U.S. GAAP) and are consistently followed by Delaware Investments Colorado Municipal Income Fund, Inc. (Fund). This report covers the period of time since the Fund’s last fiscal year end.

Security Valuation — Debt securities are valued based upon valuations provided by an independent pricing service or broker and reviewed by management. To the extent current market prices are not available, the pricing service may take into account developments related to the specific security, as well as transactions in comparable securities. Valuations for fixed income securities utilize matrix systems, which reflect such factors as security prices, yields, maturities, and ratings, and are supplemented by dealer and exchange quotations. Generally, other securities and assets for which market quotations are not readily available are valued at fair value as determined in good faith under the direction of the Fund’s Board of Directors (Board). In determining whether market quotations are readily available or fair valuation will be used, various factors will be taken into consideration, such as market closures or suspension of trading in a security.

2. Investments

U.S. GAAP defines fair value as the price that the Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. A three-level hierarchy for fair value measurements has been established based upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability developed based on the best information available under the circumstances. The Fund’s investment in its entirety is assigned a level based upon the observability of the inputs which are significant to the overall valuation. The three-level hierarchy of inputs is summarized below.

Level 1 –	Inputs are quoted prices in active markets for identical investments. (Examples: equity securities, open-end investment companies, futures contracts, exchange-traded options contracts)

Level 2 –	Other observable inputs, including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks, and default rates) or other market-corroborated inputs. (Examples: debt securities, government securities, swap contracts, foreign currency exchange contracts, foreign securities utilizing international fair value pricing, broker-quoted securities, fair valued securities)

Level 3 –	Significant unobservable inputs, including the Fund’s own assumptions used to determine the fair value of investments. (Examples: broker-quoted securities, fair valued securities)

Level 3 investments are valued using significant unobservable inputs. The Fund may also use an income-based valuation approach in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Valuations may also be based upon current market prices of securities that are comparable in coupon, rating, maturity, and industry. The derived value of a Level 3 investment may not represent the value which is received upon disposition and this could impact the results of operations.

The following table summarizes the valuation of the Fund’s investments by fair value hierarchy levels as of Dec. 31, 2014:

	Level 2
Municipal Bonds	$	102,669,566
Short-Term Investments		500,000
Total	$	103,169,566

During the year ended Dec. 31, 2014, there were no transfers between Level 1 investments, Level 2 investments, or Level 3 investments that had a material impact to the Fund. The Fund’s policy is to recognize transfers between levels at the beginning of the reporting period.

NQ-OV2 [12/14] 2/15 (13989) 5

Notes

December 31, 2014 (Unaudited)

3. Subsequent Events

Management has determined that no material events or transactions occurred subsequent to Dec. 31, 2014 that would require recognition or disclosure in the Fund’s “Schedule of investments.”

6 NQ-OV2 [12/14] 2/15 (13989)

Item 2. Controls and Procedures.

The registrant’s principal executive officer and principal financial officer have evaluated the registrant’s disclosure controls and procedures within 90 days of the filing of this report and have concluded that they are effective in providing reasonable assurance that the information required to be disclosed by the registrant in its reports or statements filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.

There were no significant changes in the registrant’s internal control over financial reporting that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 3. Exhibits.

File as exhibits as part of this Form a separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2(a)), exactly as set forth below: