ALP 6

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concerned that if a City that depends, in part, on recreation at the reservoir has
significant control over reservoir operations, the water supply use may be
compromised.
Another concern is the increased costs that the Association and, in turn,
the Commission, would have to bear if the City annexes the reservoir. For
example, franchise fees for electricity would be imposed, and gross receipts tax
would be applied as new costs. The potential cost of cleaning up an
environmental spill also is a significant concern for the Commission. As you
know, the Association is strictly liable for environmental contamination that
affects the Lake Nighthorse property. The City has been reluctant, to say the
least, to accept the same liability if it annexes the property and operates the
recreational activities there. This is no small concern, because even though the
person who caused the environmental contamination is ultimately liable, the
Association most likely will bear the actual cost of cleaning up the problem and
preventing it from contaminating the drinking water. Reimbursement is doubtful,
and the Association should be able to look to the City for contribution to cleaning
up the problem. Toward this end, bulk fuel tank facilities should not be allowed
on the reservoir in any fashion, and even having the facilities in the area gives us
great concern.
One other issue related to water quality involves hunting, and we are
concerned that the City will prohibit all hunting at the reservoir. In particular, the
concentration of waterfowl on the reservoir could damage the water quality, and
the Association needs to be free to use whatever methods are necessary to
control the polluting populations. A ban on hunting also would deprive citizens of
the wildlife values of the reservoir area, which was intended to be a wildlife
refuge that could support hunting. Again, any annexation agreement should
address these issues and ensure that wildlife values are protected and that the
Association is not hampered by a future City council, which could be sensitive to
political pressure.
As I mentioned, the Commission is deeply skeptical of annexation by the
City of Durango, for the reasons above and others, and we need significant
assurances that the ALP Project's core function of providing drinking water will
not be compromised by annexation. Meeting with you was a good first step in
the consultation process, and we look forward to hearing from you how you plan
to address these concerns.
Sincerely,
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L. Randy Kirkpatrick 0'
cc: Russ Howard, ALP OM &R Association