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with Colorado water users in an effort to discuss the concerns. The River District has voiced their concern that changes to the Warren Act may lead to additional transmountain diversions. I discussed this matter with River District staff this week and we agreed to continue our discussions. The Family Farm Alliance Warren Act Committee will conduct a conference call June 21" to work through any last minute proposed changes to our draft legislation. We will also discuss strategy for introducing the legislation in the remainder of this session of Congress. When I was in Washington, D.C. last month I did discuss this issue with most of our congressional delegation. All seemed very supportive of our efforts- either for Warren Act changes or project-specific legislation to meet the objectives of our preferred storage options plan. USBR Oversight Hearings- I spent two full days in Washington, D.C. May 26th and 27th working on securing oversight hearing on the Bureau's excessive overhead charges and administrative costs. Other Family Farm Alliance members and i met with Senate Water and Power Subcommittee members and staff to encourage these hearings. It now appears that the hearings will be held early fall just after the August recess. Senator Campbell's office was very helpful in pushing for these hearings. I've attached for your review a copy of a report I distributed while in D.C. It's a very telling way to look at exactly where our dollars go-less than 50 cents out of every dollar goes for on-the-ground O&M work. Administrative Issues and Activities New Building Project- We are negotiating contracts with HGF Architects and Houston Construction for the construction of our new office building. We should complete that process in about one to two weeks. In the meantime, soil tests are in progress at the new property-results in about a week. I've asked the City of Pueblo to give us until the end of August to close on the Industrial Park lot. The staff and I have worked on a draft budget for the building project (see attached) and a general to do list to keep us on track (also attached for your review). I'm hopeful that we could break ground by mid August. It is difficult to calculate exactly how much interest income we might lose by using reserve funds to up-front fund the construction of the building. We don't know how long it will take to sell our existing property. We will have the benefit of the C-DOT money to start the project without using reserves, and we can market the property as soon as possible, but we may have several months of lag time between when construction payments are due and when the property is finally sold. Our first rough estimate was that we would lose about $18,000 in interest income-which assumes $600,000 out of reserves for six months at six- percent interest. However, Neva thought we could use reserve dollars from our cash management account, which earns a lower rate of interest (4%). That may work! 6