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<br />0') <br />!:'-- <br />1."- <br />'\--1 <br />l:.) <br /> <br />Agenda Item 16 <br />November 17. 1988 <br /> <br /><.) <br /> <br />binding agreement with the Secretary to <br />contribute during construction one-third of <br />the costs of construction in excess of <br />$75.000.000 or $6.000.000. whichever is <br />less. Such agreement shall include a <br />reasonable limitation on administrative <br />overhead expenses charged by the <br />Secretary. <br /> <br />In light of the fact that nearly every federal project in <br />the last three or four years has been subjected to cost sharing <br />in the range of 35 to 40 percent. we were fortunate to be able <br />to negotiate 33 percent non-federal financing. Furthermore. <br />the $6.000.000 cap protects against any further increases in <br />costs. although none is expected. Given the circumstances <br />which we faced in Congress. and given that construction on the <br />project would have been terminated had the ceiling increase not <br />been obtained this October. I felt that this was the best that <br />could be done. <br /> <br />Discussion' <br /> <br />Total expenditures for construction will reach $75.000.000 <br />during the course of the current federal fiscal year. Thus. <br />the $6.000.000 of non-federal financing must be obtained and a <br />binding agreement entered into with the Secretary within the <br />next several months in order to avoid termination of <br />construction. <br /> <br />The water supply which will be provided by the Closed Basin <br />Project will assist Colorado in meeting its obligations under <br />the Rio Grande Compact. Due to, this fact. and because of the <br />manner in which the project will be operated. the project will <br />benefit the Rio Grande Valley and its water users in general. <br />Under the circumstances. I believe that it would be appropriate <br />for the state to provide the required $6.000.000 since it is <br />impossible to assign project benefits to individual water <br />users. <br /> <br />As the Board knows. it has already been authorized to and <br />is financing a part of the costs of the Closed Basin Project <br />pet the requirements of the original authorizing legislation. <br />Those costs have included the acquisition of all necessary <br />lands. rights-of-way. and easements and the construction of the <br />project's fish and wildlife and recreational enhancement <br />facilities. in which costs the Division of wildlife will also <br />participate. <br /> <br />-2- <br />