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Animas -La Plata water Marketing Supply and Demand Study Section 2 <br />• 2nd installment $12 million (not appropriated) - May be requested in 2011 Projects Bill and if <br />approved, available June 30, 2012; and <br />• 3,d installment $12 million (not appropriated) - May be requested in 2012 Projects Bill and if <br />approved, available June 30, 2013. <br />The second and third $12 million installments depend on the availability of funds in, and the cash flow <br />into, the Severance Tax Perpetual Base Account. Given the above, if the CWCB would choose to <br />purchase the entire State allocation of A -LP Project water, the repayment contract with Reclamation <br />would have to be conditioned on the future appropriation of funds and specify what happens if the future <br />appropriations required are not approved by the General Assembly. <br />Capital Repayment Alternative 1. Three Payments of $12 Million <br />This alternative consists of using the existing $12 million appropriation to make an initial payment in <br />Federal Fiscal Year 2012 with two successive payments of approximately $12 million in Federal Fiscal <br />Years 2013 and 2014 thereby completing payment of the capital costs and IDC by 2014. Therefore, the <br />total cost for repayment under Alternative No. 1 with no additional IDC would be $36.4 million based on <br />presently available data. <br />It appears that the federal government will not charge interest on the unpaid balance if the State pays <br />over a 3 -year period (personal communication, Patrick Page to Leo Eisel, August, 2010). For example, if <br />the State were to decide to acquire the entire 10,460 acre -feet and make the initial payment of $12 <br />million in FY 2011, the federal government would not likely charge interest at 8.135 percent, or other <br />rate, on the remaining balance of $24.4 million ($36.4 million - 12 million = $24.4 million). This <br />should, however, be confirmed in negotiations for the repayment contract. <br />Capital Repayment Alternative 2. Purchase Full Allocation of State Water Over Time <br />This is a similar alternative to Alternative 1 above. CWCB would enter into a repayment contract with the <br />Bureau of Reclamation in Federal FY 2011 and make the initial payment of $12 million. The balance of <br />the capital costs and IDC would be paid off over a period of years on a schedule different from the three <br />annual installments proposed in Alternative 1. It is assumed that payments would be made with funds <br />appropriated by the Legislature and not borrowed funds. The total cost of repayment under this <br />alternative would depend on the repayment period and interest rate agreed to in the repayment <br />contract. <br />Capital Repayment Alternative 3. Purchase of $12 Million Worth of A -LP Project Water <br />This would consist of the State purchasing only $12 million dollars' worth of A -LP Project water, which is <br />approximately 3,450 AF. This alternative would allow the State to have sufficient project water available <br />to the La Plata Archuleta Water District, who has expressed interest in purchasing up to 1,560 AF of <br />supply. Any water purchased by the State in excess of the 1,560 AF could be used for decreed or <br />authorized project purposes. <br />The remaining allotment of A -LP Project water (7,010 AF) would then be allowed to revert to the Ute <br />Tribes and remove all future state obligations for this block of water. Therefore, after the State has <br />entered into a repayment contract with Reclamation, the $12 million currently appropriated could be <br />transferred to the Federal Government after it becomes available on June 30, 2011, for payment of the <br />capital and IDC on approximately 3,450 AF of Colorado's 10,460 AF of A -LP Project water. The cost of <br />this alternative to Colorado would be $12 million. <br />2 -11 <br />FINAL ALP Report_ 1_ 13_11_LL, Docx <br />