ALP 13

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o Proceeds from the sale of water will be split 95% Tribes and 5% SWWCD. The 5% to
SWWCD is to cover basic administration costs to oversee the Water Bank and Water
Purchase Account. Another possible option is that the Tribes receive all proceeds from
future water sales minus the administrative costs of SWWCD and CWCB, to which the
parties would need to quantify and agree.
If successful negotiations are reached with the Tribes, consistent with the Team's counter
d identified above, the overall purchase package would look as follows:
Purchase 1,560 AF of depletions or 3,120 AF of supply. The most current numbers
provided by the Bureau, based on a full allocation, indicate a capital cost of $27,915,000
or $2,669/AF and $8,437,000 for IDC or $807 /AF for supply. Assuming a simple ratio
applies, the cost to purchase the 3,120 AF would be $8,327,280 for the capital costs and
$2,517,840 for IDC, for a combined total purchase price of $10,845,120.
OM &R for the State's full allocation is currently estimated by the Association to be
$9 /AF. Based on a purchase of 3,120 AF, the State's annual fixed -cost responsibility
would be $28,080. Variable costs are currently estimated at $18 /AF based on costs that
have already occurred to pump the current 80,000 AF into the reservoir, which would
total an annual cost of $56,160 whenever the water is put to use. Taking a conservative
approach, it is recommended that the State establish a long term investment fund to cover
both the fixed and variable costs for the water. Assuming a 3% return on a $3,000,000
investment, the $90,000 generated in interest would cover both the fixed and variable
costs, as well as the required Emergency Reserve and Replacement Funds.
Total State investment: $10,845,120 (water) + $3,000,000 (OM &R Fund) _ $13,845.120.
State retains seat on the Association.
7,340 AF (supply) or 3,670 AF (depletion) reverts to the Tribes.