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<br />Later that evening, Imperial's board, knowing full well that the documents they were voting <br />on were unacceptable to Coachella, Metropolitan, and Interior and that Coachella and <br />Metropolitan's officers could not sign them, voted 3-2 to approve the Imperial drafts. Additional <br />documents were emailed to Coachella at 5:30 p.m. on New Year's Eve. <br /> <br />What are the remaining issues? <br /> <br />As previously indicated, substantial progress had been made on many of the areas of concern <br />in the QSA documents. However, there are many issues yet to be resolved in order to finalize the <br />QSA and related documents. <br /> <br />QSA and Environmental Cost Sharing Agreement Issues <br />The 11 th hour inclusion of provisions that would allow Imperial to terminate the agreement at <br />its sole discretion after 45 years remains an issue of concern. <br /> <br />Additionally, lID has steadfastly insisted on obtaining a Habitat Conservation Plan and <br />Natural Communities Conservation Plan covering 96 species. The United States Fish and <br />Wildlife Service and the California Department ofFish and Game have determined that many of <br />the 96 species either are not present in the lID service area or are not threatened by the project. It <br />should be noted that much of the coverage requested is also to cover ongoing operation and <br />maintenance within the lID and is not directly related to the QSA. By insisting on coverage for <br />96 species and coverage for non-QSA impacts, the estimated present value cost of environmental <br />mitigation has increased from approximately $36 million to over $135 million. <br /> <br />Subsequent to the agreement on the La Quinta Term Sheet Imperial placed several additional <br />conditions on its approval of the QSA. These include a demand for $150 million in loan <br />guarantees and payment of an additional $50 million for make-up water to the Salton Sea above <br />the price agreed to in La Quinta Term Sheet. It is beyond the ability of Coachella, Metropolitan <br />or San Diego to satisfy these demands. <br /> <br />In order to meet lID's demands requests were made of the State of California to provide the <br />needed loan guarantees and the allocation of $200 million in Proposition 50 bond funds that the <br />Legislature indicated its intent to set aside for the QSA in the Machado and Kuehl bills last <br />session. Because the State could not make firm commitments to these requests, the QSA <br />documents were revised to contain several early termination provisions if the State did not <br /> <br />6 <br />