Final Draft ALP Marketing Supply and Demand Study

Animas -La Plata Water Marketing Supply and Demand Study Section 2
OM &R activities, together with the Association, as described in the agreement transferring OM &R
responsibilities from Reclamation to the Association.
Association Management Committee and Voting
Each of the Association members appoints a representative and an alternate to serve on the
Association's Management Committee. To a reasonable extent, the members of the Association have
agreed to minimize Association administration and overhead costs (IGA, Section 2.4) by providing in -kind
services. The powers, duties and operation of the Management Committee are described in detail in
Section 3 of the IGA. In considering the costs of being a member of the Association, the State of
Colorado would need to plan for the cost of in -kind services in a manner that will allow its representative
to the Management Committee to fully participate in the regular meetings (at least quarterly with a
potential to be monthly); certain contract negotiations; and the hiring and supervision of a general
manager and other appropriate staff, such as the Management Committee Secretary and Treasurer. The
IGA also provides that the Chairmanship of the Association's Management Committee rotate among its
membership on an annual basis. Therefore, the State will need to allow for extra costs and time every
seventh year to assume this responsibility, including, as necessary, sending out appropriate notice of
meetings and materials for consideration at the meetings. The State would be last to serve in this
rotation, as described in Section 3.3.4 of the IGA.
Each member of the Management Committee, acting through its representative, has one vote on all
matters coming before the Management Committee. Each vote is equal and is not weighted in the event
a member transfers all or a portion of its interest in A -LP Project water to more than one transferee, the
transferring member and the transferees are to determine how to cast the member's one vote and who
the Management Committee representative and alternate will be (IGA section 3.2.2). As long as the
State has an interest in A -LP Project water, it will be the Management Committee representative and will
have to determine how it will consult with any parties to whom it transfers water. Any transferee
contributing funds will want a significant say in matters and how the State votes.
A quorum is defined in Section 3.2.3.3 of the IGA as "representatives or alternates of a majority of the
members," and is required in order for the Management Committee to take action. Any Committee
action requires the affirmative vote of the majority present. Committee representatives may participate
by phone, but no proxy voting is allowed. Section 3.2 of the IGA (Appendix C) describes Management
Committee operations in detail. It is our understanding that the Association is seeking to operate as a
tax exempt organization (501 c3 possibly) and, therefore, further guidance for the Association will occur
through policy development.
Fixed OM &R Costs
Fixed OM &R costs for the A -LP Project include the costs of labor, materials and equipment required to
maintain all pumps, dam and reservoir, inlet conduit and other transferred project features. Fixed OM &R
costs also include project administration and overhead, costs incurred by the Association to protect joint
project interests and appropriate reserve funds. Fixed OM &R costs also include energy consumption
and the appropriate share of power demand costs attributed to the pumping of water to Lake Nighthorse
to replace evaporation and seepage losses. The negotiated percentages the Association agreed on for
sharing fixed OM &R costs are shown in Table 2 -3, below. These percentages will not change without
renegotiating the IGA, specifically Exhibit A, unless all or a portion of the State's Water reverts to the
Tribes. If the State's Water reverts to the Tribes, an adjustment in the percentages should occur based
on the proportionate share of the water reverting to the Tribes as shown in Table 2.3.
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