BOARD01811

• Board Meeting Date: 5/11/1998
• Description: Rio Grande Basin Issues - Closed Basin Project Issues
• Board Meetings - Doc Type: Memo

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May 11-12, 1998 CWCB Meeting
Agenda Item 29c, CLOSED BASIN PROJECT ISSUES
Page 4 of6

without the assistance of these Closed Basin Project waters, one of two scenarios would
have occurred: I) Colorado would have incurred compact "debt", or 2) the State Engineer
would have found it necessary to curtail existing beneficial uses in San Luis Valley to a
much greater degree than has actually been necessary,

Has the Closed Basin Project provided benefits to Colorado water users
beyond the intended compact compliance benefits? If so, what compensation is
required? Based on the information summarized above, the Closed Basin Project has
not been used to provide "priority 4" water for beneficial use in Colorado above and
beyond the intended "priority I" Compact compliance benefit, Public Law 92-514 does
require, however, that if the Closed Basin Project is used to provide more than 600 KAF
in any consecutive ten year period, the federal government (not the State Land Board) is
entitled to compensation, That compensation would be based upon the ability to pay an
appropriate share of the construction cost and all operation and maintenance cost for that
portion of the Project attributable to the additional water deliveries. However, it is our
understanding that no additional compensation would be owed to the State Land Board,
since the Rio Grande Water Conservation District holds a valid Colorado water right for
the Project. The State Land Board was aware of the proposed use of the state trust lands
within the Project area when it appraised their value for granting the necessary rights-of-
way/easements, and access to those lands,

Has the CWCB acquired the state hmds needed for the Closed Basin Project
and paid the State Land Board? If not, what actions are appropriate? Through a
succession of annual Construction Fund authorizations beginning in 1979, the CWCB has
recommended and received authorization to expend up to $896,000 for the acquisition of
lands and development of recreation mitigation facilities associated with the Closed
Basin Project. That amount was increased by the CWCB to a total of$I,091,000 based
on increases in "land values and construction costs as indicated by cost indices applicable
to the types of projects involved"(per SB 79-537, Section 4), Of that sum, $162,090,06
has been paid to the State Land Board for rights-of-way needed to complete stages I and
2 and $810,000 have been spent on recreation facilities at the San Luis Lakes State Park,
$6 million have also been spent as the state's share of the Project construction cost. Our
research indicates that rights-of-way have been acquired from the State Land Board for
stages I and 2, and that the rights-of-way for stages 3-5 are on hold until assignment of
the Stage I and 2 rights-of-way is completed between the CWCB and Reclamation. The
State Land Board reserved the right to require restoration of the lands when it issued the
right-of-way for stages I and 2 to the CWCB. When the CWCB attempted to assign the
right-of-way to the Bureau of Reclamation, Reclamation raised concerns over that
condition, However, negotiations to resolve these concerns were initiated in 1992 and
reinitiated recently, We believe the state and federal interests can be reconciled in the
next few months. However, our current estimate is that we may need an additional
$130,000 to pay the established price for all the lands needed for stages 3-5,

In order to complete the acquisition and assignment of these rights-of-way, we
need to conclude the negotiation regarding revised terms and conditions with the Bureau
and State Land Board, get the as-built survey for stage 5 from the Bureau and deliver the
as-built surveys for stages 3-5 to the State Land Board so that they can prepare the rights-
of-way documents and approve their assignment to the Bureau,