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,'.,: 'l..:, OM791 OVERVIEW OF COMMENTS RECEIVED ON PARTICULAR ISSUES The following section summarizes the substance of comments the District has received as to various issues relating to interruptible supply agreements. In reviewing this material, it is important to keep in mind that the input received came from a self- selected group of people who attended meetings or responded to written materials. There was no attempt made to identify a statistically representative sample of the public as a whole. In regard to specific contract terms, input was not limited to those parties actually interested in entering into contracts; the views of that group may vary considerably from those of the broader group of commenters who expressed opinions to the District. These factors should be kept in mind in considering the comments discussed here.. For example, a majority of commenters stated that they would prefer payment under an interruptible supply contract to be in the form of an option payment upon execution of the contract and an exercise payment upon actual transfer of the water. However, these commenters may in fact be uninterested in actually entering into contracts, while individual sellers willing to make water available may prefer a different payment arrangement. Price The district's representatives consciously avoided discussion of specific prices during public involvement efforts. There were a number of reasons for this. Because these were informational sessions rather than negotiations, discussion of price seemed premature. There is no "going market price" for this type of contract, so it was unlikely that potential parties would be able to take a meaningful position at this stage; there was a reluctance to press participants to take even a preliminary position by which they might later feel bound. Instead, discussion of prices revolved around how payment amounts under interruptible supply agreements would be determined. Perhaps the most notable feature of these discussions was the high level of unease on the part of potential sellers as to the value to be attached to making water available under these contracts. Although there is an active market in both permanent transfers and annual rentals of C-BT water, there has been no ongoing market for dry-year options arrangements. Accordingly, there is no generally known "market price". Although the theoretical basis for determining the value of water under interruptible supply contracts is clear, it can be difficult to translate the theory into an acceptable price in a real-world situation.3 3 All a matter of economic theory, a seller is adequately compensated for water transferred if he or she receives an amount sufficient to cover a proportional share of fixed costs (which are incurred regardless of production levels) associated with the farming operation, plus the profit that would have been earned if a crop had been grown 9