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100,000 acre-feet per year of "its" water to Galloway for <br /> delivery by Galloway to unspecified entities in the Lower <br /> Colorado River Basin. In exchange, a state would receive $10 <br /> per acre-foot or, at a minimum, $1 million per year . <br /> David Getches has informed the attorney for Galloway that <br /> Governor Lamm will not sign the option agreement which was <br /> offered to him. David ' s October 25th letter to John Musick <br /> sets forth the reasons for that decision. (Mr . Getches ' letter <br /> is included in Appendix L, attached. ) <br /> The "option agreement" entered into between Galloway and <br /> the Authority, for which the Authority paid Galloway $10,000, <br /> purports to give the Authority the right, upon the exercise of <br /> the option, to enter into a "Water Service Agreement" with <br /> Galloway. Pursuant to such agreement, Galloway would purport <br /> to "lease" to the Authority a minimum of 300,000 and a maximum <br /> of 500,000 acre-feet of water per year . The lease would be for <br /> a minimum period of 40 years, with provision for termination <br /> then or at any time thereafter upon 15 years prior notice. <br /> The water which Galloway would allegedly "lease" to the <br /> Authority would come from unspecified reservoirs to be <br /> constructed by Galloway within Colorado on the Yampa and/or <br /> White Rivers . The water would be delivered to the Authority by <br /> means of the natural channel of the Colorado River and its <br /> tributaries . The Authority would take delivery at Lake Havasu. <br /> In the ensuing discussion, Mr . McDonald briefly reviewed <br /> Mr . Getches ' letter to Galloway which raised several pertinent <br /> questions relating to the Galloway proposal . These include: <br /> (1) How can the proposed transaction comply with interstate <br /> compacts and laws allocating the waters of the Colorado River? <br /> (2) How can the proposed transaction satisfy the provisions <br /> of the Colorado export statute? <br /> (3) How can Galloway guarantee that water developed in <br /> Colorado can be delivered to the Authority using the Colorado <br /> River channel? <br /> (4) Assuming the legality of the Galloway scheme, what are <br /> the consequences to Colorado of Galloway' s proposed storage <br /> facilities proposed for construction in Colorado? <br /> For consideration by the Board of the Galloway proposal, <br /> Mr . McDonald recommended that: <br /> • <br /> -18- <br />