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<br />the storage. This also maximizes the revenue to the federal government. If the <br />use of storage was required to be based on an optimized distribution, no storage <br />would be reallocated to agriculture. However, it is acknowledged that in the near <br />term, the locally negotiated distribution of storage includes 4,264 acre-feet for <br />agricultural use with slightly the most senior of water rights in the users group. <br />Finally, the assumption that all reallocated storage would be allocated to M&I <br />was made by the PDT, including the sponsor, from the beginning of the study. <br /> <br />However, there is a possibility that a price break for agricultural use to water <br />users could occur without too much drag on the project schedule, if that portion of <br />the reallocated storage initially going to agricultural use was reallocated to that <br />purpose, but the users be allowed to waive the Federal cost share for mitigation <br />needed for the additional storage. This would forestall the need for <br />appropriations. Still, this would be temporary (until usage changes) and would <br />necessitate local interests dealing with the Federal government with each change, <br />instead of with a local broker. Reallocation proponents appeared to be leaning <br />away from adapting this strategy, unless it would be discovered that the <br />downsides were negligible. <br /> <br />One other idea was that all the new storage could be reallocated to M&I, but <br />perhaps the use in the near future for agriculture could result in a negotiated, pro- <br />rated cost break for the contractor(s). <br /> <br />(2) Who contracts for storage? The Corps has no preference for having storage <br />contracts with one user or 15 users, but it is likely that one user makes things <br />easier. If Colorado Water Conservation Board (CWCB) wants rights and <br />responsibilities for using space to be transferred to someone else they have to <br />come to the Corps to get approval for a transfer agreement. The same is true for <br />every user if the Corps has a contract with each entity. If 1 user changes and <br />wants to transfer storage, HQ or Sec Army must approve the transfer agreement, <br />although transfer of water rights (not storage rights) can occur between water <br />users without Corps involvement. The Corps would have trouble contracting to a <br />non- public agency. Whoever contracts for storage may pay the Corps for up to <br />30 years at 4 1J4 % and also must pay 10% of annual Operations & Maintenance <br />(O&M) costs. <br /> <br />Jeff Shoemaker mentioned that the Greenway Foundation would be willing to be <br />the "broker" if the group wanted one contract, and CWCB doesn't want to be the <br />broker of the storage space. Alternatively, a new foundation could potentially be <br />established to do the brokering. It wasn't clear whether water contracts could be <br />signed by such entities. <br /> <br />It should be required that the contract(s) signed by water users include an <br />operational plan so that transfers of storage to another use would not create <br />changes not covered under our mitigation planning, or in the overall operation of <br />the reservoir. Also, there should be a clause in the contract that states if storage is <br /> <br />3 <br />