BOARD01632

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

DRAFT 9-1-04
B. Pursuant to Public Law 106-392 Section 3.(d) and as long as the Permanent Water
Supply conveyed to the CWCB is used for Recovery Program purposes and at the
direction of the Service and upon the Recovery Program's approval of the River
District's annual work plan as described in paragraph N.C. herein, Reclamation agrees to
pay the CWCB's portion of the River District's actual OM&R costs based on the Pro-
Rata Formula commencing with the date the River District first makes any portion of
water from the Permanent Water Supply available for Recovery Program purposes,
regardless of whether the storage space and water right has been transferred to the
CWCB.

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a. A meeting among the parties hereto, Craig, and the Yampa
Participants to discuss plans for OM&R;

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1. Upon substantial completion of construction of the Reservoir Enlargement
(as defined in the construction contract between the River District and the entity
retained to construct the Reservoir Enlargement) the parties hereto agree to meet
to prepare and approve an initial OM&R work plan to cover the CWCB's Pro-
Rata share of the River District's OM&R expenses until the River District's first
annual work plan has been submitted and approved pursuant to paragraph N.C.
herein.

C. Annually, the River District shall prepare and submit an annual work plan for the
upcoming calendar year to the Recovery Program for review and approval. The annual
work plan shall show the River District's anticipated Reservoir OM&R expenses. The
annual work plan shall include estimates for the River District's direct costs, such as
labor, materials, equipment, utility, and other costs related to the OM&R of the Reservoir
Enlargement. A percentage share of the River District's incremental cost of adding the
Reservoir Enlargement to the River District's insurance policy ( less any contributions
from third parties such as Craig or Yampa Participants) and a management fee in the
amount often percent (10%) of the River District's direct costs, shall also be included in
the annual work plan. Together, the direct costs, incremental insurance costs, and
management fee described on the annual work plan approved by the Recovery Program,
minus any contributions from third parties such as the Yampa Participants, shall
constitute the OM&R costs, a percentage of which Reclamation is obligated to pay under
paragraph N.B herein. Attached hereto as Exhibit A is a draft work plan spreadsheet, a
draft labor-rate spreadsheet, and a sample list of work activities and items that may be
used by the River District in preparing its annual OM&R work plan. Preparation of the
annual work plan shall include the following steps:

1. The schedule for and steps involved in the preparation, submission,
and approval of the annual work plan shall include the following:

b. The River District's work plan shall be submitted to the
Director, Colorado River Recovery Implementation Program on or before
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