ALP 23

I Any additional repayment shall be warranted only for reasonable and unforeseen costs associated
2 with project construction as determined by the Secretary in consultation with the State, taking
3 into account Section 207 of Public Law 108 -447 as amended and, Reclamation's Decision
4 Memorandum, "Methodology Regarding Implementation of Section 207 on Up -Front Cost-
5 Sharing and Repayment, Animas -La Plata Project (August 2, 2006)" as amended and attached,
6 and other appropriate documents. Section 207 limits the non - tribal; repayment obligation to $43
7 million for the $500 million project (10/03 prices). The language, as amended, results in:
8 • No repayment of the $163 million of cost increases
9 • No repayment of the effects of inflation on the $163 million of cost increases
10 • Implies repayment on the effects of inflation on the $337 million ($500 million -$163
11 million), which implies some inflation of the reimbursement cap.
12 (e) The details of said costs and a draft final cost allocation will be furnished to the State by
13 the United States, and the State reserves the right to review the input to the cost allocation,
14 including the assignment of costs to the municipal and industrial water purpose and the
15 allocation thereof to the State's repayment obligation. Following consultation and review by the
16 State, the final allocation of reimbursable costs will be prepared by the United States. These
17 costs will be sub, ect to alternative dispute resolution as described in Article 8 if there remains a
18 dispute in the allocation of costs.
19 (f) The United States shall give the State written notice of the State's Final Repayment
20 Obligation as established by the final cost allocation. In the event the final cost allocation
21 establishes that the Final Repayment Obligation is in excess of any payments made by the State
22 toward the Estimated Repayment Obligation of $36,214,474 the State will have the option to pay
15