CWCB Repayment Contract ALP

United Suites Departtrmit of the Interior
BUREAU OF 1113CLAtu,m1014
Upper Cojorwlo Region
�'. western Coloi2do Araa Office
2764 Contl>.Za_ Drive, Suite lOG
935 E 21Ammt Suite 300
Grand )unction CO 81506-8785 Doringo CO 81301 -5475
AIT -100 JUN — 1 2006,
WCG- C:DeAragelis
W IR -4.00
MEMORANDUM
To. Cori tractors/Potcntial lepayment Sponsors
From: ]tick Fltat, Animas L;Anta
Carol DeAngelis, Western ('oiaracio Area Office Mitunf,Cr
Subject: Methodology Regarding Implementatiola of Section 207 on Up.-Front Cost -
Sttaring and Repayment, Animas -La Mata .Project
A. 13ackgrourtd. The passage of Sociion 207 of P.L. 108-447,,4,; amended, affects up-
fi-ont cost - staring and repayment of (lie Project. The statute provides:
S'ec- 207. Animas -La -Taro NOrt- Indian Sponsor Obligation v. In accordance with the
rlontribul rtpuylllenr obligation specified in .Subsuciion 6(a)(3)()_{1 of the Colorado Vie
Adian Righa Senlernent Act of 1988(Publir. Law 100 -585), as amended by the Colorado
Utc .Setlleiuer)t Act Amendments qf 2000 (Public La y 10(= .SSA!), the reimbursable cost
upm.) w1lich the Cost allocation shall be based shall not exceed $43, 000, 000, Plus interest
during construction for those parties not utilizing the up font paym etlt option, of the first
$500,000,000 (.7arlamary 2003 price level) o1'the total project costs. Consequently, the
Secretary,-nayforgive the obligation of the nor, - Indian- sponsors relative to the
S163,000,000 increase, and arty elects in ilr(lation thereon, in estimared total project
costs that occurred in 2003.
Tl> s docurilent is to record and acka)itsvledgo ceilain decisions blade by the Biwcau of
Reclarriation regarding impletnentatioll of the prevision cited ;above nfter consultation
with Al Project sponsors, including the Tribes.
B. Implementation Methodology.
1. Cost Allomation Method: The current contraris are based o» ihe.. 2001 luterim
Lost A llacation Method. This method will continue to be used for allocating costs.
2. Specific Costs and the Reimbursement Crap: The statutory language provides
that (he reimbursable costs shall not exceed $43 million for the first $500 million of total
project costs, thereby establishing a reimbiu-semcnt cap that covers boll) specific costs
and joint costs. 71erefore, the rei nbulsalile specific costs for ti,e C'it } of h)aranf;o shall