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$43,000,000 of the first $500,000,000 (January 2003 price level) of Project costs. Further, the bill
authorizes the Secretary to forgive the obligation of non -Indian sponsors relative to the $163,000,000
increase in estimated Project costs that occurred in 2003.
1.6 The ALPD Depletion Allocation of 2,600 acre feet of average annual depletion
corresponds to 5,200 acre feet of annual water supply for municipal and industrial purposes, which
has been further delineated by the Bureau of Reclamation as 2,919 acre feet of water stored in Ridges
Basin Reservoir and 2,281 acre feet of water withdrawn directly from the Animas River pursuant to
the Animas -La Plata Project.
1.7 Purchaser wishes to acquire an option to secure a long -term municipal and industrial
water supply for the present and future inhabitants of the Purchaser and its surrounding service area,
and in furtherance thereof the parties hereto enter into this Agreement.
2. Agreement.
For and in consideration of the premises and the mutual covenants, conditions, and promises
herein, the parties agree as follows:
2.1 Definitions.
2. 1.1 ALPD Depletion Allocation means the 2,600 acre feet of average annual
municipal and industrial depletion allocated to the Animas -La Plata Water Conservancy District by
the Colorado Ute Settlement Act Amendments of 2000.
2.1.2 Additional Repayment Obligation is the repayment obligation described in
Paragraph 8(b) of the Funding Agreement that will be prepared by the Secretary of Interior upon
completion of construction of the Animas -La Plata Project, to quantify reasonable and unforeseen
costs associated with Animas -La Plata Project construction that warrant additional repayment for the
ALPD Depletion Allocation.
2.1.3 Additional Water Charge is the Additional Water Charge described in
Paragraph 2.4 of the Marketing Agreement, comprising a pro rata share ofthe Additional Repayment
Obligation. The Additional Water Charge for a particular portion of the ALPD Depletion Allocation
is determined by dividing the number of acre feet of ALPD Depletion Allocation purchased by
2,600, and multiplying the result by the Additional Repayment Obligation (including interest during
construction charges thereon) payable pursuant to Paragraph 8(b) of the Funding Agreement.
2.1.4 Base Water Charge is the Base Water Charge described in Paragraph 2.4 of
the Marketing Agreement, comprising a pro rata share of the Up -front Payment Obligation. The
Base Water Charge for a particular portion of the ALPD Depletion Allocation is determined by
dividing the number of acre feet of ALPD Depletion Allocation purchased by 2,600, and multiplying
the result by $6,674,350.00.