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N '>> ~.... ..... '.~ .., '-...' ,- . . STATE OF COLORI\DO - COLORADO WATER CONSERVATION BOARD Department of Natural Resources 721 State Centennial Building 1313 Sherman Street Denver, Colorado 60203 Phone: (303) 866,3441 Roy Romer Governor J. William McDonald Director David W. Walker Deputy Director M E M 0 RAN DUM TO: Members, CWCB FROM: Bill McDonald DATE: March 14, 1989 SUBJECT: Agenda Item 8, March 20-21, 1989, Board Meeting --Closed Basin Project Cost-sharing Agreement Subsequent to the January Board meeting, I prepared a draft cost-sharing agreement and have had one negotiating session con- cerning that draft with the Bureau of Reclamation. The major i terns which need to be brought to the Board's attention are as follows: (1) Reclamation has agreed, as the board suggested, that there is no necessity for a formal escrow account into which Board funds would be deposited. Rather, the Board will commit, upon the execution of a cost-sharing agreement, to encumber the required $6 million so that it will be reserved for and dedicated to the purposes of the cost- sharing agreement. This is standard state pro- cedure in terms of encumbering funds upon execution of a contract so it will work fine for the state. (2) Reclamation would prefer that payments by the Board be made on a quarterly advance basis, with adjust- ments made in the billing for a subsequent quarter to reflect costs actually incurred in the preceding quarter. I see no problem with this arrangement and recommend that the Board agree to it. (3) The key issue to be addressed is how to insure that the federal government will complete the project through Stage 5. Based upon past actions of the Administration, there is some reason to be concerne~, that Reclamation would endeavb~ to obtain Board cost-sharing money in order to complete Stage 4 of the project, and then refuse to proceed with Stage 5. In an effort to protect against this