BOARD01807

• Board Meeting Date: 5/24/2004
• Description: CWCB Director's Report
• Board Meetings - Doc Type: Memo

In November 2003, following completion of that study, the Board adopted a resolution of support for the
necessary federal legislation to authorize Reclamation to construct and fund the project. The Board directed
staff to further research and strengthen some of the statements in the resolution before transmitting it to our
congressional delegation.

Prior to finalization and delivery of the resolution, Sen. Allard, the sponsor of the federal legislation, proposed a
shift in focus under which the Corps would be the lead federal agency for construction and funding.

Since the Board's November resolution was specific to the proposed role of Reclamation in constructing the
conduit as a component of the Fry-Ark project, the Board's resolution was not sent. Instead we are working with
Jim Broderick of the SECWCD to determine the best ways to assist Sen. Allard in his efforts to bring this
important project out of the planning mode and into construction.

If the concept of relying on the Army Corps becomes the preferred method of moving the federal legislation,
staff will prepare a replacement resolution for the Board's consideration at a future meeting.

Arkansas River Compact Administration: The Operations Committee of ARCA met in Lamar on April 13 to
continue efforts to resolve disputed accounting issues at John Martin Reservoir. Committee Chairman, David
Brenn of Kansas, conducted a focused and spirited meeting.

The main accomplishment was adoption of formal communication and dispute procedures to improve
interactions between the Operations and Assistant Operations Secretaries.

Agreement on methods for determining and compensating for transit losses between JMR and the Stateline will
be the focus of further discussions, with another meeting set for this August. A tour of the basin for the new
federal representative, as well as state officials is also being proposed for August.

While in Lamar, staff from Kansas and Colorado also inspected the damage and inventoried the facility where
ARCA's historical records were stored. For the most part, the records survived undamaged, and the facility will
be fully restored at no cost to ARCA and should be available for use by the end of 2004. A full inventory of the
records will be made after they are cleaned and returned to the facility. In addition proposed procedures for
document storage and retention, as well as back up electronic archiving, will be developed for consideration by
ARCA at its December 2004 annual meeting.

Color ado River Basin

Orchard Mesa Collateral: At its January 1995 meeting, the Board approved an $871,000 loan to the Orchard
Mesa Irrigation District for the District's pipeline rehabilitation. At the time, the collateral for the loan was a
pledge of revenues and a certificate of deposit in the amount of one annual loan payment. The project was
substantially completed February 2, 1998, and the amount of loan used by the district was $469,813.04. The
CWCB staff postponed amending the loan contract to reflect the reduced loan amount until a lawsuit against the
District by one of its members was decided. Amendment of the loan contract was recently initiated, and during the
process of amending the loan contract, the District requested that the CWCB reconsider the collateral needed to
secure its loan. The staff reviewed CWCB Policy No.5 and concluded that the standard collateral for an irrigation
district would be a pledge of district revenues with a rate covenant and annual financial reporting. The CWCB
staff proposed that collateral consisting of a pledge of revenues (with the addition of a rate covenant and annual
financial reporting) would be adequate collateral for the loan, and the CWCB Director concurred with this
conclusion.

Ranch Valley Reservoir Grant: On May 3 we provided $10,000 to the Northwest Council of Governments to
prepare a feasibility study for the Ranch Valley Reservoir in Grand County.

J oint Agriculture Committee Hearing on Color ado River: Our Colorado River Commissioner Scott Balcomb
and I recently discussed current Colorado River conditions and issues with the House and Senate Joint
Agriculture Committee. Many of the topics discussed at the hearing will be the subject of the workshop we are
scheduling with you in July.

Ostler Hired as Executive Director of River Commission: The Upper Colorado River Commission has
selected Don Ostler to be its Secretary and Executive Director. Ostler replaces Wayne E. Cook, who retired in

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