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... . . fulfilled by water available ject, there would not be any River. from the Animas-La Plata Pro- need for a call on the Animas Remarks on comments. Determination of city water rates must of necessity be an ongoing process; a process which should be continuously reviewed every few years and decisions made on water rates today, mayor may not be applicable in the future. History is a great teacher and the history of Grand Junction, Lamar and other Colorado cities indicates that the failure to take advantage of water supplies made available by water resource development projects has been a mistake. The ques- tion indicates that there is some concern regarding "cheaper options", Cheaper options are not the only consideration. Cheaper does not mean best, especially in the water business. Availability on demand for example is much more important than cost. The City of Durango had the opportunity to par- ticipate in the Florida Project and turned down the opportun- ity on the basis that the City of Durango had adequate water at that time and that the water would be too expensive for Durango's citizens. The City Council should consider the fact that under the Animas-La Plata the federal government will provide fifty year financing at an interest rate of 6.59%. In addition, there will be no payments during construction and a ten year deferral under the Water Supply Act. The city will have fifty years to pay costs which will eliminate any necessity for city bonding. LEGAL RELATIONSHIPS 1. WHAT WILL BE THE EFFECT OF AN ANIMAS-LA PLATA WATER CON- SERVANCY DISTRICT UPON DURANGO'S EXISTING WATER RIGHTS? There will be no direct impact on Durango's direct flow rights on either the Florida or Animas Rivers. Presuming construction of the Animas-La Plata Project and an allocation to the City of Durango of 8200 acre feet of storage under a storage decree owned by the Animas-La Plata Water Conservancy District (1938 priority date), the City of Durango would still have available for exchange or for other utilization, such as raw water for summer irrigation, the water rights which are presently owned by the City of Durango in the Animas River. The trade-off seems to be relatively poor direct flow water rights which the city presently owns in the Animas River for 8200 acre feet of priority storage right water which will be available to the city on demand even though the Animas River may be at a very low water supply stage. -4-