30

• Board Meeting Date: 1/27/2004
• Description: WSP Section - Navajo Nation Federal Reserved Water Right Settlement with the State of New Mexico
• Board Meetings - Doc Type: Memo

. supply distribution system in and around Gallup, currently anticipated to be as much as $5 million,
would be credited towards Gallup's repayment requirement. Use of Gallup's water supply
infrastructure to assist in delivering water to surrounding Navajo communities minimizes the amount
and cost of works needed to serve water to these communities.

4 The funding for the Navajo Nation Municipal Pipeline is additional funding needed to extend
capacity of the Pipeline from the City of Farmington's water treatment plant to the Nation's water
meter. Ownership, maintenance and operation of the Navajo Nation Municipal Pipeline would be
transferred to the Navajo Nation upon completion of Pipeline construction.

5 The groundwater wells to be developed would provide conjunctive groundwater uses within the
service area of the Navajo-Gallup Water Supply Project to help meet water needs of Navajo
communities in the San Juan, Little Colorado and Rio Grande basins and minimize the demand for
water from the San Juan River.

6 The federal funding for the Navajo Nation Water Resources Development Trust Fund would be
deposited over the course of ten years following the date of passage of the Settlement Act into law
and would be matched by equal contributions from the State of New Mexico. The Trust Fund would
be used to investigate, construct, maintain and operate water facilities, and to implement water
conservation measures and improvements, for the Navajo Nation to make use of its water rights
under the Settlement Agreement.

.

Not all of the water project costs tabulated above are a result of the proposed Settlement

Agreement. Without settlement, the United States would continue to construct the Navajo Indian

Irrigation Project, now approximately 70 percent complete, to service 110,630 acres in accordance with

the autporization for the Project provided by the Act of June 13, 1962, and would continue to pay the

operation and maintenance costs in accordance with the existing water delivery contract for the Project

between the Navajo Nation and the United States. Also, the Department of the Interior, pursuant to the

trust responsibility of the United States to the Navajo Nation, would rehabilitate the Fruitland-

Cambridge Irrigation Project and Hogback-Cudei Irrigation Project facilities. The additional cost for the

Navajo Nation Municipal Pipeline, which was authorized by the Colorado Ute Settlement Act

Amendments of 2000, is due to an apparent oversight in the Bureau of Reclamation's planning for the

full capacity of the Pipeline between the Navajo Nation water meter and the City of Farmington water

treatment plant. Thus, the federal cost of settlement amounts to $470.7 million, which is the sum of: (1)

.

7