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March 12-13,2007 Board Meeting Agenda Item 9 Page 4 of5 Initial Concerns with DE IS . I 1. The DEIS purpose and need sta1tement does not adequately acknowledge the purposes arti(~ulated by the 7-states in their proposed agreement. 2. When, how and by what amourlt will Mexico be shorted and shorted in a manner that is consistent with the Mexi6an Treaty? With respect to the Mexican Treaty, the issue is one wherein the Loter Basin, particularly Arizona, wants to lock in a fixed shortage percentage for M;exico (16,67%) whenever the Lower Basin is taking a shortage. The Lower ~asin, with a fixed shortage assigned to Mexico, then wants to reduce the Lower Basin portion of each shortage step accordingly rather than add that shortage onto each step. The Upper Basin believes at the very least this is premature since the matter must be handled through the State Department and the Internation~l Boundary and Water Commission. The Upper Basin is unanimous in its opiniop that first it is not good public policy to try to pressure the State Dept. through I the Interior Dept. to adopt an arrangement that may not fully reflect future need~ or conditions. Secondly, there are a number of reasons why the Upper Basin should not agree to an exclusive "trigger" for shortage sharing with Mexico, f6r example, the Upper Basin may want to share some of the "savings benefits" tqe Lower Basin would realize by shorting Mexico. Furthermore, the Uppet Basin wants to carefully review any such agreement and fully evaluate any possible ramifications such may have on the Upper Basin. The Upper Basin i~ concerned that there could be compact implications in any such agreem~nt. We believe that the most prudent course of . action is to maintain all options ~t this time in the event that we would like - Mexico's cooperation to say construct a desalination plant for the benefit of both I ' countries. , 3. The Criteria contained in the DE~S are to terminate in 2026. However, several provisions in the Lower Basin Forbearance Agreement provide that certain aspects of the Criteria may exten~ beyond 2026. Therefore, close attention to all termination provisions is requireq. In asking for termination on a date certain, the Upper Basin wanted to be absolu~ely positive that the 7-StateAgreement and EIS Record of Decision were terminated at appoint in which beyond the results show would be extremely detrimental tb the entire system and the Upper Basin in . I partIcular. Related Matter - Lower Basin Forbea~ance Aereement The Lower Basin has provided a copy of their Forbearance Agreement to the Upper Basin for informational purposes. I:The Forbearance Agreement goes beyond what is necessary in a forbearance agreement. Therefore, the Upper Basin has several questions for the Lower Basin in order fot the Upper Basin to understand what is met and I intended. A copy of the Forbearance Agreement is attached along with the questions the Upper Basin has asked of the Lower Basi~. .