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. .---- - The preliminary May I st estimate of the 1997 end-of-year California agricultural consumptive use of Colorado River water under the first three priorities of the 1931 California Seven Party Agreement is 3,897 maf. This estimate is based on the collective use through April 1997 by the Palo Verde Irrigation District, the Yuma Project Reservation Division, the Imperial Irrigation District, and the Coachella Valley Water District. Figure I, bound at the end of this report, depicts the monthly forecasts of end-of-year agricultural use since the beginning of the year. Colorado River Operations As reported at the April Board meeting, the initial draft of the 1998 Annual Operating Plan for the Colorado River System Reservoirs (1998 AOP) calls for a "surplus" declaration to govern the delivery of water from Lake Mead during calendar year 1998, Also, the initial draft of the 1998 AOP provides for water apportioned to a Lower Division state that will not be used by that state is to made available for use by the other Lower Division states, equalization releases to be made from Lake Powell to equalize the storage of water in Lake Powell and Lake Mead, and notification to Mexico that it may schedule the delivery of 1,7 mar of water during calendar year 1998. Comments on the initial draft of the 1998 AOP are to be submitted to Reclamation by May 16th, The next meeting of the Colorado River Management Work Group will be held on June 20, 1997, The fmal consultation meeting with the Colorado River Basin states is schedule for July 29,1997, As reported at the April Board meeting, Reclamation is also working on development of surplus and shortage guidelines. Included in the April Board meeting materials was a summary of the comments that Reclamation had received on the objectives for management of the reservoir system. Reclamation is now running a number of reservoir operating strategies, the results of which will be discussed during a meeting that has been scheduled for June 3, 1997, The surplus strategies being studied include: flood control, 70 percent avoidance of a spill (based upon both the 70 percentile volume of runoff and the volume of vacant space required to provide a 70 percent -_ avoidance of a flood control release), three-, five-, eight-, and ten-year look aheads for avoiding a spill, 80 percent avoidance ofa shortage, and the Basin's long-term yield, In Secretary of the Interior Bruce Babbitt's speech at the annual conference of the 1996 C010rado Rivcr Water U~ers Association he indicat~d that Reclamation would begin to develop water management regulations focused on intra- and interstate marketing, with special attention placed on implementing the Arizona Water Bank, Included in the Board folder is I) an outline prepared by Reclamation, dated April 20, 1997, showing the framework of the concepts it is proposing to include in the rule for implementing off stream storage and interstate water marketing in the Lower Division states, and 2) a time line and flow chart for the rule making process, Included in the Board folder is a copy of the "Quarterly Status Tabulation of Pending Water Service, Repayment, and Miscellaneous Contract Actions" issued by Reclamation. The Board staff will closely follow the contract related to item 61, whereby Mr. Don Schuler is requesting a surplus contract for 18 recreational lots in California, 2