Central Colorado Approval Letter

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Central Colorado Water Conservancy District Agenda Item 29e May 9,2014(Updated May 23,2014) Page 5 of 7 FEDERAL AND STATE REQUIRED MITIGATION. THESE COST TOTAL$145.5 MILLION($7,063/ACRE- FOOT).THE REALLOCATION PARTICIPANTS ARE RESPONSIBLE FOR A PRO-RATA SHARE BASED ON THEIR STORAGE ALLOTMENT. SEE TABLE 2 FOR A SUMMARY OF THE REALLOCATION COST. TABLE 2: REALLOCATION COST SUMMARY Task Cost Cost of Storage $16,300,000 Federal Required Mitigation $107,100,000 State Required Mitigation $8,900,000 Subtotal $132,000,000 Contingency (10%) $13,200,000 Total $145,500,000 Borrower's Participation: The District is participating in the Reallocation with a goal of increasing its water supplies in order to increase the quota under its augmentation plans. When the District does not have enough water supplies to fully augment its member wells, it issues quotas restricting full pumping. For 2014, the GMS quota has been set at 45%and the WAS quota has been set to 20%. The District also contemplates use of storage in Chatfield by issuing allotment contracts to water providers and users within its district, similar to the GMS and WAS contracts. The location of Chatfield provides the ability to replace well depletions to all locations within the District. No additional water right acquisitions or infrastructure improvements will be necessary for the District to utilize storage in Chatfield. In addition to its current 2,849 AF allotment of Chatfield's reallocated storage,the District is in the process of obtaining Western Mutual Ditch Company's (WMDC) 1,425 AF of storage, currently funded and managed by CWCB. The total storage space will then be 4,274 AF, or 20.75% of the total reallocation. With the approval of WMDC, CWCB has negotiated the sale of WMDC's allotment to the District at a 20%discounted rate, combined with 100% financing for the District's total Project cost. With these negotiations, the District has agreed to shepherd water associated with WMDC's storage allotment downstream to its District's boundaries; thereby improving stream flows downstream of Chatfield when the District makes releases. Therefore, CWCB staff is recommending an exemption to Financial Policy#11 to allow for 100% financing. With the District responsible for 100% cost of its original 2,849 AF allotment, and 80% cost of the WMDC 1,425 AF allotment, the District's total Project cost is approximately $28,170,000, or 19.36% of the total reallocation cost. SCHEDULE:THE CORPS' RECORD OF DECISION(ROD)IS EXPECTED IN 2014.UPON THE SIGNED ROD, THE CORPS WILL COMPLETE NEGOTIATIONS WITH DNR AND ENTER INTO A WATER STORAGE AGREEMENT.DNR WILL ENTER INTO THIRD PARTY SUB-AGREEMENTS WITH THE REALLOCATION PARTICIPANTS.PROJECT ACTIVITIES WILL BEGIN WHEN ALL NECESSARY AGREEMENTS HAVE BEEN EXECUTED(ESTIMATED FALL 2014). REALLOCATION PARTICIPANTS EXPECT TO PAY IN FULL THE COST OF STORAGE AS WELL AS BEGIN FINAL ENGINEERING UPON PROJECT START. THE RECREATIONAL FACILITY MODIFICATIONS AND ON-SITE MITIGATIONS ARE EXPECTED TO TAKE 5 YEARS. OFF-SITE MITIGATIONS AND MITIGATION MONITORING ARE EXPECTED TO LAST 13 YEARS OR MORE.