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<br />, , <br /> <br />100,000 acre-feet per year of "its" water to Galloway for . <br />delivery by Galloway to unspecified entities in the Lower <br />Colorado River Basin. In exchange, a state would receive $10 <br />per acre-foot or, at a minimum, $1 million per year. <br /> <br />David Getches has informed the attorney for Galloway that <br />Governor Lamm will not sign the option agreement which was <br />offered to him. David's October 25th letter to John Musick <br />sets forth the reasons for that decision. (Mr. Getches' letter <br />is included in Appendix L. attached.) <br /> <br />The "option agreement" entered into between Galloway and <br />the Authority, for which the Authority paid Galloway $10.000, <br />purports to give the Authority the right. upon the exercise of <br />the option. to enter into a "Water Service Agreement" with <br />Galloway. Pursuant to such agreement, Galloway would purport <br />to "lease" to the Authority a minimum of 300.000 and a maximum <br />of 500.000 acre-feet of water per year. The lease would be for <br />a minimum period of 40 years, with provision for termination <br />then or at any time thereafter upon 15 years prior notice. <br /> <br />The water which Galloway would allegedly "lease" to the <br />Authority would come from un$pecified reservoirs to be <br />constructed by Galloway within Colorado on the Yampa and/or <br />White Rivers. The water would be delivered to the Authority by <br />means of the natural channel of the Colorado River and its <br />tributaries. The Authority would take delivery at Lake Havasu. . <br /> <br />In the ensuing discussion. Mr. McDonald briefly reviewed <br />Mr. Getches' letter to Galloway which raised several pertinent <br />questions relating to the Galloway proposal. These include: <br /> <br />(1) How can the proposed transaction comply with interstate <br />compacts and laws allocating the waters of the Colorado River? <br /> <br />(2) How can the proposed transaction satisfy the provisions <br />of the Colorado export statute? <br /> <br />(3) How can Galloway guarantee that water developed in <br />Colorado can be delivered to the Authority using the Colorado <br />River channel? <br /> <br />(4) Assuming the legality of the Galloway scheme, what are <br />the consequences to Colorado of Galloway's proposed storage <br />facilities proposed for construction in Colorado? <br /> <br />For consideration by the Board of the Galloway proposal. <br />Mr. McDonald recommended that: <br /> <br />. <br /> <br />-18- <br />