Recommendation G: Special Engineering Committee

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2. The values of Offset Account water released and measured at the Stateline should be revised via an addendum to the 1997 through 2005 Reports of the Colorado State Engineer, Concerning Accounting of the Operations of an Offset Account in John Martin Reservoir for Colorado Pu-rnping (Offset Report). This addendum will report the values for the deliveries using the criteria provided in the 2005 Offset Account Crediting Agreement. 3. An addendum proviso should be added to the cover page of each Annual Report of the Operations Secretary for 1994 through 2005 and each Offset Report for the years 1997 through 2005 stating as follows: "The Annual Report of the Operations Secretary for Compact Year . [or the Offset Account Operations Report for (year)] has been approved by the Arkansas River Compact Administration with the following proviso: The values and operations in this report have been in dispute. An addendum report, dated , contains the revised values that have been determined through agreement by the States. However, while Kansas and Colorado have agreed that accounting prior to 2006 will not be otherwise revised, Kansas does not waive any claim for past damages or restitution of water on the unresolved, disputed issues of upstream storage during spills and Agreement B." 4. Deliveries of water to John Martin Reservoir under Section III of the 1980 Operating Plan, and particularly the method for determining the Winter Water split contained in the Annual Reports of the Operation Secretary for 1994 through 2006, will not be revised or recalculated. However, this shall not set any precedent as to how this accounting should be done if this Recommendation is adopted by ARCA. This recommendation is not intended to preclude either State from proposing a revision of the method for calculating deliveries of water to John Martin Reservoir under Section III in the future or the States continuing to work towards agreement on the method. B. The Committee recommends that no restitution be made for water lost to evaporation during John Martin spill events prior to 2006. C. While some transit losses on releases of water from the Kansas Section II account were replenished from the Kansas transit loss account in accordance with Section H E 4 of the 1980 Operating Plan; the Committee has determined that some transit losses were not replenished from 1996 to 2006 (past deficits). In this document the term, "past deficits" refers only to the deficits accumulated during Compact Years 1996 through 2006_ The Committee recommends that restitution for the past deficits be made as provided for in this recommendation. The Committee has quantified the amount of the past deficits as 3,633 acre -feet. For only these past deficits, Colorado will deliver 3,062 acre -feet (2,491 acre -feet plus half of what would normally have been derived from Kansas' portion of the 35% distribution) to the Kansas Section II account by no later than May 15, 2008. The water to be delivered has been derived from Arkansas River Basin consumable sources as described in the attach letter agreement from either Lake Meredith or Pueblo 3 This unresolved issue is referenced as Issue #22 (Winter Water Split) in the "Water Issues Matrix" document, JMR Accounting Issues, dated April 2005. 4 This resolved issue is referenced as Issue #51 (Spilling Accounts) in the "Water Issues Matrix" document, JN4R Accounting Issues, dated April 2005. The Committee resolved this issue with our Recommendation F and is awaiting concurrence via an ARCA Resolution. Page 2 of 3