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'\ . . 4. IF DURANGO PARTICIPATES IN THE ANIMAS-LA PLATA PROJECT, HOW WILL THAT AFFECT THE CITY'S CONTROL OVER WATER TREATMENT AND DELIVERY SYSTEMS SERVING THE CITY? WILL THE CITY BECOME A BUYER OF RAW AND TREATED WATER WITH LITTLE CONTROL OVER THE FUTURE PRICE OF THAT WATER? No affect on city's existing treatment facilities. The City of Durango will continue to use these facilities. It would be anticipated that the city would become a partici- pant in a new treatment facility to be constructed by the district or by the City of Durango. Control over future price and costs would be dictated by contract to be agreed upon by whoever participates and who- ever builds the facilities. Must assume fair, long-range bargain and a mutual agreement between all water users. With the construction of the Animas-La Plata Project the costs to the city will be determined by the prorated con- struction costs for the proportion of project facilities which are to be utilized by the City of Durango. Once the costs for the City of Durango's participation have been allocated and prorated, they will be set for the life of the Animas-La Plata Project of fifty years. The alter- native would be little control over costs because of the unknown price of energy, costs, materials and inflation. s. IN RECENT REPAYMENT CONTRACTS FOR DELIVERY OF WATER TO MUNICIPALITIES FROM BUREAU OF RECLA~~TION PROJECTS HOW MUCH MARGIN HAS BEEN LEFT FOR COST OVERRUNS WHICH COULD AFFECT THE ULTIMATE COST OF RAW WATER AND DO SUCH CONTRACTS ALLOW FOR AN APPEAL BY THE MUNICIPALITY? THE RECENTLY COM- PLETED DOLORES PROJECT CONTRACT WITH THE CITY OF CORTEZ MIGHT BE A SOURCE OF ANSWERING THIS AND OTHER QUESTIONS CONCERNING THE LEGAL AND FISCAL RELATIONSHIPS OF MUNICIPALI- TIES TO WATER DISTRICTS AND THE BUREAU OF RECLAMATION? The estimated cost per acre foot to the City of Durango are the best estimates of costs at this time. If there are additional costs, they will be prorated among the water users in proportion to their share of the project construction costs. As an example, a 10 per cent overrun in that portion of the project construction in which the City of Durango will be involved could mean an approximate 10 per cent increase in the cost to the city. 6. IN ADDITION TO REPAYMENT OBLIGATIONS PAID THROUGH RATES FOR WATER USE, WILL THE CITIZENS OF DURANGO BE SUBJECT TO OTHER TAXES FOR SUPPORTING THE WATER DISTRICT AND FOR RE- PAYING CONSTRUCTION COSTS OF TIlE PROPOSED ANUlAS-LA PLATA WATER PROJECT? -6-