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00312~ . FOLLOWING A PERSONAL PRESENTATION TO THE BOARD BV MR. H. P. DUGAN. DIRECTOR OF ~ REGION 7 OF THE BUREAU O~ RECLAMATION, WH~REIN T~E BUREAU'S POSITION WAS EXPLAINtD, TH~ BOARD DIRECTED MANAGEMENT AND LEGAL COUNSEL TO CONrER WITH THE RECLAMATION COMMISSIONERlS STAFF IN WASHINGTON ABOUT THE PROBLEM. AT THE WASHiNGTON CONFERENCE, THE FINANCIAL AND CONTRACTUAL PROBLEMS THAT WOULD BE CREATED FOR THE DISTRICT BY THE REGIONAL DIRECTOR'S PROPOSALS WERE CAREFULLY EXPLAINED AND REVIEWED. FINALLY. CONTRACT PROVISIONS AND A FOR- MULA FO~ COMPuTING COSTS WERE AGREED UPON IN A MANNER THAT WOULD PROTECT THE POWER REVENUE EARNING CAPABILITY OF THE PROJECT AND AT THE SAME 'IME PERMIT CONTINUED FLEXIBILITY IN 015- TRICT WATER DISTRIBUTION AND FINANCIAL PLANNING. AT THE ~ND OF THE FISCAL YEAR THE CONTRACT HAD BC~N ORA~TEO AND, WITH SOME MINOR CHANGES YET TO BE NEGOTIATED, WILL BE READY FOR eXECuTION EARLY IN THE 1967-1968 rlSCAL YEAR. ~ INITIAL ATTEMPTS TO REACH AGREEMENT ON THE PROPOSED POWER INTERFERENCE CONTRACT WERE CO~PLICATED WHEN, IN FeBRUARY 1966, THE BUREAU BEGAN WITHHOLDING THE CONTRACTUALlV-REQUIRtD . CONSENT or THE SECRETARV OF THE INTERIOR TO LAND INCLUSIONS. S~VtRAL INCLUSION REQUESTS FOR SMALL AREAS OF LAND SERVED WITH DOMESTIC WATER BY THE CITY Of BOULD~R OR BY RURAL DOMESTIC WATER DISTRIBUTORS WERE AMONG THOSE BEING wiTHHELD AS QUOTA CERTI~ICATION TIME APPROACHED IN THE SPRING OF 1967. IT APPEAREO, FOR A TIME, THAT IT WOULD BE NECESSARY FOR THE BOARD TO WITHHOLD CERTifiCATION Of THE 1967 DELIVERY QUOTAS FOR THESE AllOTTEES IN ORDtR TO AVOID BEING lN VIOLATION O~ THE 1938 REPAYM~NT CONTRACT AND Of STATE LAW. BOTH of THESE DOCUMENTS PROHIBIT DELIYERY OF WATER FOR BENE~IT OF LANDS OUTSIDE THE BOUNDARI~9 O~ THE DISTRICT. THE ADVERSE PUBLIC RELATIONS THAT WOULD HAVE RESULTED HAD THIS ACTION BEEN NECESSARY WAS POTENTIALLY DA~AGING TO BOTH THE BUREAU AND THE DISTRICT. FORTUNATELY, WITH AGREEMENT ON THE BASIC TERMS OF THE POWER INTtRrERENCE CONTRACT, THE BUREAU ISSUED SECRETARIAL ASSENT . TO ALL PENDING INCLUSIONS IN TIME rOR DELIVERV QUOTAS TO BE CERTlrltD TO THE CONCERNED ALLOT- TEES. SINC~ THAT TIME, SECRETARIAL ASStNT HAS BEEN PROMPTLY ISSUED fOR SEV(RAl 4DDITIONAL INCLUSIONS ORDERED BV THE BOARD. ~o-