BOARD01118

• Board Meeting Date: 3/21/2006
• Description: WSP Section- Animas-La Plata Project Update
• Board Meetings - Doc Type: Memo

the effect of inflation on the reimbursement cap. as set forth in $337 million ($500

million $163 million), whieh results in an estimated inflated reimbursement cap. This

method is reflected in Attachment 2.

2. Proiect Cost Proiection for Escrow Planning. In order to assist contractors in

projecting overall project costs fO,r escrow planning, a process was presented to the

sponsors during an August 29,2005 meeting. A synopsis of that process is described in
Attachment 3.

2-J.";' Adjustment of Cap Conversion Factor. At such time as the actual joint cost

expenditures exceed $346,399,000, (the estimated total joint costs included in the

$500,000,000 Project Cost estimate from July, 2003), Reclamation will develop an

adjusted Cap Conversion Factor to reflect the Inflated Reimbursement Cap. At that time,

the remaining reimbursable costs to be recovered, due to the effects of inflation, will be

calculated. Adjustments to the remaining reimbursable costs due to inflation on the

estimated City of Durango specific costs will be considered in this calculation. A revised

Cap Conversion Factor will be developed as a ratio of the calculated remaining

reimbursable costs to be recovered underwith Section 207 to the calculated remaining

reimbursable costs without the effect of Section 207. The Cap Conversion Factor

willetHtl be reviewed each year as indexed project cost estimates are released.

~. Final Cost Allocation and Determination of Reasonable and Unforeseen Costs. The

language of the Colorado Ute Settlement Act Amendments of 2000 addressing final cost

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