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<br />. <br /> <br />. <br /> <br />~. <br />-:'~ <br />~~ <br />N <br /> <br />construction payments. The policy question is a significant one <br /> <br />nationally; other projects are being proposed for title transfer. <br /> <br />~m) <br /> <br />~.! Conejos determined that title transfer was not essential for it to <br /> <br />achieve its water management objectives, and the proposal before <br /> <br />Congress has been altered accordingly. <br /> <br />The $500,000 in lieu payment now proposed as part of an O&M <br /> <br />transfer is equivalent to the lump-sum payment of the future <br /> <br />obligations of the repayment contract, taking into account the <br /> <br />federal savings of flood control O&M costs. <br /> <br />($2.32 million over <br /> <br />40 years at zero percent interest less approximately $29,OOO/year <br /> <br />for the federal share of O&M, brought to present worth assuming a <br /> <br />5% real discount rate, is approximately $500,000.) <br /> <br />By subsequent agreement with the Bureau providing for cost <br /> <br />sharing for instream flow maintenance, the cost has been further <br /> <br />reduced to $450,000. <br /> <br />The effect of the transaction from the federal perspective is <br />to discount and assign to others a questionable loan. The risk of <br /> <br />compact problems and task of implementing aggressive water <br /> <br />management is passed to the water users. From Conejos' perspec- <br /> <br />tive the effect is the challenge of direct responsibility for the <br />success of the project. <br /> <br />7 <br />