BOARD01632

• Board Meeting Date: 9/13/2004
• Description: ISF Section - Proposed Water Right Acquisition - Elkhead Reservoir Enlargement
• Board Meetings - Doc Type: Memo

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DRAFT 3/22/04 revised 3/31/1)4 04/01/04 revised 06/03/04 (with solicitor's changes)

GRANT AGREEMENT NO.
FOR
COLORADO RIVER WATER CONSERVATION DISTRICT'S INVOLVEMENT IN THE
UPPER COLORADO RIVER BASIN RECOVERY IMPLEMENTATION PROGRAM

NARRATIVE

1. BACKGROUND. The purpose of this Grant Agreement between the Colorado River Water
Conservation District, acting by and through its Colorado River Water Projects Enterprise ("River Districf')
and the U.S. Bureau of Reclamation ("Reclamation") is to conduct activities related to the recovery of
endangered native fish species as outlined in the Recovery Implementation Program for Endangered Fish
Species in the Upper Colorado River Basin ("Recovery Program").

The Recovery Program was established September 29, 1987 and implemented by a Cooperative
Agreement signed in January 1988 by the Secretary of the Department of the Interior, the Governors of
the States of Colorado, Utah, and Wyoming and the Administrator of the Western Area Power
Administration. The Recovery Program is a coalition of agencies and organizations that currently
includes Reclamation, the U.S. Fish and Wildlife Service ("Service"), the Colorado River Energy
Distributors Association, Colorado Water Congress, National Park Service, State of Colorado, State of
Utah, State of Wyoming, The Nature Conservancy, Utah Water Users Association, Western Area Power
Administration, Western Resource Advocates, and Wyoming Water Association. The goal of the
Recovery Program is to recover four species of endangered fish while allowing water development to
proceed consistent with state water law and in compliance with the Federal Endangered Species Act
("ESA") in the Upper Basin states of Colorado, Utah, and Wyoming.

The Recovery Program has determined that the following water supplies are needed within the Vampa
River Basin to provide water for endangered native fish species during criticallow-ftow periods in the
Vampa River Basin: 1) 5,000 acre-feet permanent water supply and 2) 2,000 acre-feet short-term
(temporary) water supply.

The River District, the Recovery Program, Reclamation, and the Service have agreed to cooperate in the
construction of an 11,750-acre-foot expansion of Elkhead Dam and Reservoir ("Reservoir" Enlargemenf'),
located on Elkhead Creek a tributary of the Vampa River in Sections 1, 2, 3, 4, 9,10,16, and 21
Township 7 North, Range 89 West, 6th Principal Meridian, Moffat and Routt Counties, Colorado, to
develop a water supply that will be capable, subject to water availability based on hydrologic cycles, of
providing the water for the pemnanent water and short-term water supplies identified above and be
available for other beneficial uses to the River District.

Elkhead Reservoir consists of the existing dam and the existing water storage space, estimated capacity
of 13,137 acre-feet, and upon completion of the Reservoir Enlargement, the Reservoir will have a total
estimated capacity of 24,887 acre-feet. Reservoir Enlargement cost of construction is currently estimated
at $20,498,787.00.

The Recovery Program has approved funding a pro-rata share of the construction cost for the 5,000 acre-
feet permanent water supply and associated storage space in the Reservoir. The pro-rata share of the
construction cost shall mean the allocation of the storage space created by the construction of the
Reservoir Enlargement, estimated to be 11,750 acre-feet, as follows: 27/47'h interest, 6,750 acre-feet to
the River District ( estimated to be $11,775,899.00) and 20/47'" interest, 5,000 acre-feet to the Recovery
Program (estimated to be $8,722,888.00).

The Recovery Program has also approved funding the River District's ten percent (10%) management fee
that has been added to the cost of construction of the Reservoir Enlargement attributable to the Recovery
Program's pro-rata share (estimated at 20/47'h of the cost of construction). The ten percent (10%)

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